THE ROLE OF INTERNAL CONTROLS IN ENHANCING FINANCIAL MANAGEMENT IN THE PUBLIC SECTOR: A CASE STUDY OF CSIR-SARI

Abstract

Although an efficient and effective Internal control system is an essential component of an organization's financial management, there is no common understanding with regards to an effective and efficient internal control system in the public sector of Ghana. In this regard the study seeks to assess the role of internal controls in enhancing financial management in the public sector. The primary aim of this research is to evaluate the role of internal controls in improving financial management in the public sector. It also attempted to test if there is a significant relationship between internal control activities and financial management in the public sector of Ghana and whether revenue losses and fraud in public sector organizations may be attributed to weaknesses in the internal control system. This research work used exploratory cross-sectional survey research design for the purpose of collecting data and purposive sampling technique to administer questionnaires to sixty-two (62) respondents which consisted primarily of accounts and audit staff, internal management committee, administrative and research staff of Council for Scientific and Industrial Research - Savanna Agricultural Research Institute (CSIR-SARI), data collected was subjected to descriptive statistical analysis, while data on preference, perception or ranking were analysed using Kendall's Coefficient of Concordance. The study established that CSIR-SARI has a functioning internal control system structured along the Council for Scientific and Industrial Research lines just like any public institution in Ghana, and it is a policy that has been put in place to guide the Institute in achieving its mandate. It was also established that there exists a significant, relationship between an internal control system and effective financial management in the public sector of Ghana The thesis argues that revenue losses and fraud in public sector organizations are as a result of weakness in the internal control system. Among others, the study recommends that management should take the front line in maintaining an effective internal control system. Given the important role of staff in the control environment, it is also recommended that management clearly outlines what the internal control procedures are and ensure each staff has a document that clearly captures these.