Internal control systems and financial performance of private secondary schools in Kamuli district Uganda

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Kampala International University, College of Economics and Management
The study investigated and sought to establish the effect on internal control systems on financial performance in private secondary schools in Kamuli, Uganda. Internal controls were looked at from the perspective of Control Environment, and Control Activities and risk management whereas financial performance focused on Liquidity, Quality, Efficiency, Satisfaction, Survival, Liquidity and Reporting as the measures of financial performance. The research was conducted using both quantitative and qualitative approaches using Survey, Case study as Research Designs. Data was collected using Questionnaires as well as review of available documents and records targeting basically Finance Officers, Heads of Departments, Management Committee members and Finance and Accounts staff as respondents from a population of 40 in Kamuli progressive college. Data was analyzed using the Statistical Package for Social Scientists where conclusions were drawn from tables~ figures from the Package. The study found that management of the institutions is committed to the control systems~ actively participates in monitoring and supervision of the activities of the school, all the activities of the Institution are initiated by the top level management, that the internal audit department is not efficient, is understaffed doesn’t ‘conduct regular audit activities and doesn't produce regular audit reports although the few reports produced by the internal audit department address weaknesses in the system. It was further revealed that there is a clear separation of roles, weaknesses in the system are addressed, and there is a training program for capacity building in the institutions. However, the study also found out that there is lack of information sharing and inadequate security measures to safeguard the assets of the school. The study established a significant effect of internal control system and financial performance. The investigation recommends competence profiling in the Internal Audit department which should be based on what the Institutions in Kamuli expects the internal audit department to do and what appropriate number staff would be required to do this job. It also recommends that the institutions establishes and manages knowledge/information management system to enable all parties within the institution to freely access and utilize the official information. There should be a strategy to improve the generation of additional finances for the Institutions in Kamuli. The Study therefore concludes that internal control systems do function although with hiccups and that there is a significant effect of internal control systems on financial performance of private secondary schools in Kamuli, Uganda.
A Research Report Submitted to the College of Economics and Management in Partial Fulfillment of the Requirements for the Award of a Bachelor’s Degree in Business Administration (Finance and Accounting) of Kampala International University
Internal control systems, Financial performance, Private secondary schools, Kamuli Progressive College