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CHAPTER FOUR: DATA ANALYSIS AND DISCUSSION OF THE FINDINGS
4.1 Introduction
This chapter presents data analysis and discussion of the findings on the challenges
facing internal control of finance in Faith Based Organizations in Kenya; A case study of
All African Conferences of Churches (AACC). The data were analyzed with the help of a
computer program, namely SPSS version 11.5. This enabled the researcher to present the
data in frequencies, percentages. The chapter is divided into two main sections, namely
results and discussion of the findings.
4.2 Background information of the Respondents
This study targeted staff members and managers. The background information is meant
to make use of the respondents’ characteristics in cross tabulations in order to establish
more trends on the respondents’ responses on the challenges facing internal control of
finance in Faith Based Organizations in Kenya.
The background characteristics of the staff members included gender, level of education
and working experience while that of managers was only concerned on gender . These
characteristics were meant to show the distribution of staff members by gender, level of
education and working experience and to establish the nature of their responses based on
these characteristics.
Gender
Staff members were asked to indicate their gender, categorized as either male or female.
Figure 4.1 shows the distribution
Female
8
( 26.7%)
Male
22
( 73.3%)
Figure 4.1 Distribution of respondents by gender
Basing on the distribution of staff members by gender, majority of them, (73.3%) were
male. Slightly a third of them, (26.7%) were female.
Level of education
The distribution of staff members by their level of education was partitioned into college
and university level as shown in Figure 1.2 below:
University
4
(13.3%)
College
26
(86.7%)
Figure 4.2 Distribution of staff members by their level of education
With regards to the distribution of the staff members with their level; of education, an
overwhelming majority of them, (86.7%) were college graduates. Only 13.3% of them
were University graduates.
Working Experience
The distribution of staff members by their working experience was categorized into: less
than 2 years, 2-4 years and 5 years and above.
70
60
50
40
18
(60%)
30
20
10
8
(26.7%)
0
Less than 2 years
4
(13.3%)
2-4 years
5 years and above
Figure 4.3 Distribution of staff members by their working experience
Background information of Managers
The background information of managers was categorized into: gender, job
designation, department and working experience. These characteristics are presented in
the table 4.1 below.
Table 4.1
Background information of Managers
Gender
Job designation
Department
Working
experience
Manager 1
Male
Kenya society
Accounting
15 Years
Accounting
6 Years
Accounting
5 Years
for the deaf
Manager 2
Female
Diguna African
Mission
Manager 3
Male
The Consolata
Mission
4.3 Human Resource Capacity Issues affecting internal auditing
Staff members were to indicate human Resource Capacity Issues affecting
internal auditing, the issues named include Communication breakdown due to low human
resources, poorly trained human resource, understaffing in the accounting department,
overloading of responsibilities to one person, internal control inadequacies and lack of
appropriate skills and training of the human resource on how financial management
affects the control of finance in the organization.
Table 4.2
Responses on human resource capacity issues affecting internal auditing
Statement
Communication break down due to low
human resources
Poorly trained human resource which
affects negatively the control of finance
in our organization.
The issue of understaffing in the
accounting department
Overloading of responsibilities to one
personnel in the accounting department
Internal control inadequacies which
increase fraud risk
Lack of appropriate skills and training
on the human resource on how
financial management affect the control
of finance in the organization
Yes
No
Not Sure
F
%
F
%
F
%
8
26.7
14
46.7
8
26.7
8
26.7
16
53.3
6
20.0
10
33.3
16
53.3
4
13.3
16
53.3
8
26.7
6
20.0
8
26.7
18
60.0
4
13.3
12
40.0
16
53.3
2
6.7
When asked to indicate whether communications break down due to low human
resources was among the human resource capacity issues affecting internal auditing,
almost a third of staff members, 26.7% agreed. However, majority of them, (73.4%)
either disagreed or were not sure about it.
Almost a third of staff members, 26.7% indicated that one of the human resource
capacity issues affecting internal auditing was poorly trained human resource which
affects negatively the control of finance in their organization. (73.4%) of those who
participated in the study however, were either negative or not sure about the statement.
Regarding on whether the issue of understaffing in the accounting department was
among the human resource capacity issues affecting internal auditing, slightly more than
a third of the staff members, (33.3%) were positive. Majority of them 66.6% either
disagreed or were not sure about that statement.
More than a half of staff members, 53.3% indicated that overloading of
responsibilities to one personnel in the accounting department was an considered an issue
among the human resource capacity issues affecting internal auditing. Considerable
number of those who participated in the study, 46.7% either disagreed or were not sure
whether the statement was a human resource capacity issue.
Slightly less than a third of staff members, 26.7% explained that internal control
inadequacies was among the key issues on human resource capacity issues affecting
internal auditing because it increased fraud risk. However, 73.3% of those who
participated in the study were negative or not sure about this statement.
Lack of appropriate skills and training on the human resource on how financial
management was another human resource capacity issue. More than a third of staff
members, 40% indicated that indeed lack of appropriate skills and training on the human
resource on how financial management affects the control of finance in the organization.
However, majority of them, 60% either disagreed or were not sure about it.
On the other hand, when managers were also asked to indicate the human resource
capacity issues facing internal financial control in their organization, they all indicated
that there was lack of proper training in the side of management, poor or understaffing in
the department, too much freedom exercised by the management and the staff, lack of
orientation in case of a take-over, employment of under-qualified personnel, failure to
improve the effectiveness and efficiency and the of the process and failure to outline the
image, output, process and the future indicators of the audit process.
4.4 Budgetary Issues Affecting Finance Internal Control
Staff members were asked to indicate the budgetary issues affecting finance
internal control, these issues included bureaucratic processes in budgeting, unbalanced
budgetary allocations and Lack of proper and transparent budgeting process.
Table 4.2
Responses on budgetary issues affecting finance internal control
Statement
Bureaucratic processes in budgeting
Unbalanced budgetary allocations
Lack of proper and transparent
budgeting process
Yes
No
Not Sure
F
%
F
%
F
%
12
12
40.0
40.0
12
10
40.0
33.3
6
8
20.0
26.7
16
53.3
10
33.3
4
13.3
As shown in table 4.2 above, more than a third of staff members, 40% who
participated in the study indicated that bureaucratic processes in budgeting was one of the
key budgetary issues affecting finance internal control of the organizations. The same
number of them was negative while 20% of them were not sure about the statement.
In terms of unbalanced budgetary allocations, less than half of the staff members,
(40%) noted that that issue was one of budgetary issues affecting finance internal control.
In addition, slightly more than a third of them, (33.3%) indicated otherwise. Only 26.7%
of them were not sure whether unbalanced budgetary allocations was of the budgetary
issues affecting finance internal control.
Slightly more than a half of staff members, (53.3%) who took part in the study
pointed out that lack of proper and transparent budgeting process is one of the key
budgetary issues affecting finance internal control in the selected organizations.
Considerable percentage of them, (46.6%) either disagreed or was not sure about it.
Basing on the responses from managers, it was indicated that the budgetary
issues affecting finance internal control included imposing of figures by the foreign
nation where these organizations are being funded, in ability to meet targets and focus
because of the imposing figures, poor remuneration leads to fraud and theft since these
workers are taken service, lack of proper training on budgeting, poor budget allocation
,there is always under-estimation, bureaucracy, allocation of funds according to the
resources that are granted in some sponsored faith based organizations, poor
implementation of the allocated of funds and lack of transparency. In addition, it was
also noted that:
There was an issue of improper budgeting in relation to the cost of living,
this is due to poor understanding of the budgetary process hence making a
poor budget, a budget that is unequally balanced leads to poor
management of funds.(Kenya society for the deaf, manager 1, 2013).This
was inline with manager 2 (2013) who indicated that due to improper
budgeting in relation to the cost of living , there head office which is based
in a foreign nation impose figures and limits hence making it difficult for
the personnel involved to reach actual target and focus in reference to the
scenario.
4.5 Technology issues affecting Internal Control of Finance
Staff members were asked to show their responses technological issues that
internal control of finance. Their responses were based on lack of adequate technological
know how and training on auditing system, internal auditing security concerns in the
organization, lack of flexibility among staff in the adoption of technologies related to
auditing and members of staff are not able to cope with the rapid development of
auditing systems.
Table 4.3
Responses on technology issues affecting internal control of finance
Yes
No
Not Sure
Statement
F
%
F
%
F
%
Lack of adequate technological know
how and training on auditing system
12
40.0
10
33.3
8
26.7
8
26.7
16
53.3
6
20.0
12
40.0
6
20.0
12
40.0
8
26.7
18
60.0
4
13.3
Internal auditing security concerns in
the organization
Lack of flexibility among staff in the
adoption of technologies related to
auditing
Members of staff are not able to cope
with the rapid development of auditing
systems
Asked to indicate whether lack of adequate technological know how and training
on auditing system was among technology issues affecting internal control of finance,
slightly less than a half of the respondents, (40%) were positive. Majority of staff
members, 60% who took part in the study either disagreed or were not sure about the
statement.
In terms of internal auditing security concerns in the organization, only 26.7% of
staff members who took part in the study agreed that the issue of internal auditing
security concerns was among the among technology issues affecting internal control of
finance in their organizations. Slightly more than a half of them, (33.3%) were negative.
The remaining percentage of those who took part in the study, (20.0%) were not sure
about it.
Slightly less than a half of staff members, (40.0%) indicated that lack of
flexibility among staff in the adoption of technologies related to auditing was one of the
technology issues affecting internal control of finance. Majority of them, (60%) either
disagreed or were not sure about the statement.
Regarding whether members of staff are not able to cope with the rapid
development of auditing systems was a technology issue affecting internal control of
finance in their organizations, less than a third of staff members, (26.7%) were positive.
However, majority of those who took part in the study, (73.3%) were either negative or
were not sure about it.
When asked to indicate technology issues affecting internal control of finance, all
managers positively responded by giving several issues which included lack of modern
technology, lack of a good finance management system, lack of training, lack of security
on how to protect the files in computerized accounting, lack of privacy in information
ignorance by some staff members to change, high cost of purchasing and installation of
the modern equipment for some organizations, and that some Organizations are shying
away from long term planning in fear of short term focus.
4.6 Policies and Procedural Issues Affecting Financial Internal Control
Table 4.3
Responses on policies, procedures and the internal control of finance at the ACCA-
Yes
No
Not Sure
Statement
F
%
F
%
F
%
Conflict of interest in the organizational
polices and procedures have been
affecting the internal control of finance
in the organization
14
46.7
8
26.7
8
26.7
16
53.3
8
26.7
6
20.0
8
26.7
20
66.7
2
6.7
12
40.0
16
53.3
2
6.7
10
33.3
16
53.3
4
13.3
10
33.3
12
40.0
8
26.7
Poor investment policies and decisions
are some of the issues affecting the
internal control of finance in the
organization
There are no proper guidelines that
address on the transparency on the
activities involving the allocation and
spending of financial resources in the
organization
In the organization there are no training
policies for the internal audit of staff
The internationally accepted accounting
standards are not followed in the
organization
The organization doesn’t have adequate
policies and procedures manual to
guide activities and ensure staff
accountability
The written policies available in the
organization aren't covering all routine
financial management procedure in
auditing
There are no procedures that exist to
ensure that only authorized person s
can alter or establish a new accounting
principle, policy and procedure to be
used by the entity
10
33.3
14
46.7
6
20.0
10
33.3
18
60.0
2
6.7
Almost half of staff members, (46.7%) indicated that conflict of interest was
among the key policies and procedural issues affecting financial internal control issue in
the organizations. Slightly more than half of them, (53.4%) either disagreed or were not
sure about it.
Asked whether poor investment policies and decisions are some of the issues
affecting the internal control of finance in the organization, majority of staff members,
53.3% were positive whereas almost a third of them, (26.7%) indicated otherwise.
Almost a third of staff members who took part in the study, (26.7%) indicated on
of the policies and procedural issues affecting financial internal control was improper
procedural guidelines. They added that there were no proper guidelines that address on
the transparency on the activities involving the allocation and spending of financial
resources in the organizations. The vast majority of them, (73.4%) either indicated
otherwise or was not sure about the statement.
More than a third of staff members, (40.0%) responded that the issue of lack of
training policies for the internal audit of staff was among the key Policies and Procedural
Issues Affecting Financial Internal Control in their organizations. This however was in
contrast among the 53.3% of those who took part in the study.
Due to failure of following the internationally accepted accounting standards in
the organization, slightly more than a third of staff members, (33.3%) were positive that
lack of accepting the internally standards of accounting was one of the policies and
procedural issues affecting financial internal control among the selected organizations.
However, more than a half of them, (53.3%) were negative.
Whether lack adequate policies and procedures manual to guide activities and
ensure staff accountability was one of the policies and procedural issues affecting
financial internal control of the organizations, 33.3% of the staff members were positive.
The remaining percentage of them, 66.7% either disagreed or was not sure about the
statement.
Asked whether the written policies available in the organization were not
covering all routine financial management procedure in auditing had an effect in financial
internal control of the organizations, slightly more than a third of staff members, (33.3%)
responded positively. Almost a half of them, (46.7%) indicated otherwise. A small
number of the remaining staff members, (20%) were not sure about it.
Regarding on whether there are no procedures that exist to ensure that only
authorized person s can alter or establish a new accounting principle, policy and
procedure to be used by the entity, slightly more than a third of staff members, (33.3%)
who too part in the study were positive that lack of procedures was among the key
policies and procedural issues affecting the internal control. Majority of them, (66.7%)
either disagreed or were not sure about the statement.
Basing on the managers responses on policies and procedural issues affecting
financial internal control, they indicated that there was lack of stability and morale, lack
of visible presence and clear role/boundaries amongst the organization leadership, failure
of the organization to introduce organizational mechanism for supporting training,
appraisals and staff governance as important determinants of effective practices and
successful performance/change, lack of training, lack of effective internal control system,
lack of financial reporting should be open to ensure accountability, lack of good policies,
method of employment and terminations, salary and remunerations, some organization
lack policies on internal control and poor internal control policies in the past.
4.7 Strategies to address the challenges facing the internal Strategies in
Organizations
When managers were asked to indicate the strategies to address the challenges
facing the internal strategies in the organization, they suggested various strategies which
included Investment in a good operation system, hiring qualified personnel, regular
review and training, proper finance management system, control over cash to be
implemented, introduction of rules and regulations, introduction of the code of ethics,
introduction of individual personnel morale incentives increases amongst the team,
putting in place effective internal control procedures, embracing new technology in the
market to reduce the risk and finally by embracement of regular internal training in order
to boost decision making which will bring on board collective morale state of
development from which a group of dynamics through individuals with varied ideas
and expertise.
4.8 Discussion of the Findings
This section presents a discussion of the key findings of challenges facing the
internal control of finance in faith based organizations in Kenya, a cases study of All
Conferences of Churches. The main objectives included human resource capacity issues,
budgetary, technology and policies and procedural issues.
4.8.1 Human Resource Capacity issues affecting the internal control audit
From the findings, overloading of responsibilities to one personnel in the
accounting department was reported as a major factor in the human resource capacity in
the internal control audit in the organizations. According to the American Governance
and Leadership Group (2002), creates the need for personnel to take on more than one
role within the department, leading to improper segregation of duties which intern
minimizes fraud risk. However, the American Governance & Leadership Group (2002)
further indicates that authorization of transactions, custody of assets and record-keeping
functions must be separated so that unobserved fraudulent activity does not occur.