Effect of Internal Control Structures on Financial Management in National Public Secondary School in Cost Region, Kenya
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Abstract
Financial resources are crucial to the success of any business. Without revenue, no company has ever succeeded. As a result, financial management must be considered by institutions, enterprises, organizations, and commercial entities in order to improve their performance and, more importantly, to reduce their exposure to financial risks. The educational sector's growth and development are determined by how well income is managed. Financial management is concerned with an organization's decisions on how to raise cash, how to manage financial resources through revenue controls, and how to allocate revenue resources wisely. It is critical to any organization's success. The government of Kenya has put in place internal control system to ensure that the funds invested in education are used for the right purpose. However, accountability and management is still wanting in some national public secondary schools. The main purpose of this study was to evaluate the effect of internal control structures on financial management in national public secondary school in Cost region, Kenya. Specific objectives being to establish the effect of control environmental system on financial management in national public secondary school in Kenya and to analyze the effect of control activities system on financial management in national public secondary school in Kenya The study was carried out in 12 national public secondary schools in Coast region, Kenya. The study was guided by financial control theory. Survey research design was used on population consisting of 12 principals, bursars 12 and 12 BOM chairs. Data were collected by use of questionnaires. Inferential statistics was used to analyze the data collected. Inferential statistics comprised of Correlation analysis, ANOVA, regression analysis. The study found that there exist a positive, strong and statistically significant association between control environment and financial management. Similarly, the study found that there exist a positive, strong and statistically significant association between control activities and financial management. The study found that the factors under study which were control environment and control activities had a positive and strong relationship (R = 0.516) with financial management in national public secondary schools in Coast region, Kenya. Moreover, the factors studied were found to explain 51.6% of financial management in public secondary schools in Coast region, in Kenya ( = 0.516). The regression coefficient results revealed that a change by 1 unit in financial management was as a result of changes by 0.470 unit in control environment and 0.462 unit in control activities while holding (0.109) constant. It was revealed that control environment and control activities significantly influenced financial management in national public secondary schools in Coast region, Kenya. The study therefore concluded that there exists a positive and significant relationship between control environment and financial management in national public secondary schools in in Coast region, Kenya. This implies that when control environment improves, financial management will improve.
Keywords
Internal Control Structures, Financial Management
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