Financial Health Check-Up for Future Sustainability

Performance measurement is important in every organization both financial and non-financial. The efficiency of the financial management system depends on effective financial management and the quality and reliability of the financial reports prepared by the organization. With the increasing pressure for Local Authorities to improve their accountability, it was an appropriate time to look at the current state of the Local Authorities' financial health. The objectives of the study are to determine the stimulus for change in Local Authority, KMC and to determine its financial health. The result shows that the preparation of the Financial Statements was just ceremonial and KMC had continuously incurred deficits for four consecutive years with no serious initiatives taken to improve the situation. However, discussion between the researchers and KMC on the seriousness of their financial health triggered a very strong stimulus for KMC to change for the better.