The Effect of Internal Controls on Resource Utilization in Non-Government Organizations Case Study: Care Uganda

Abstract

The purpose of this study was to establish the effect of Internal Controls on Resource Utilization in Non-Government Organizations with Care Uganda as the case study. The objectives were; to establish the effect of internal auditing on resource utilization, to establish the effect of monitoring on resource utilization and to establish the effect of control activities on resource utilization in Care Uganda.

A case study design was used to obtain the opinion of the respondents. Simple random sampling was used during the study. Purposive sampling was also used to select respondents for the researcher to attain the purpose of the study. Data was collected using both primary and secondary data which included; questionnaires and interview, reports, journals respectively. The data was analyzed and presented using the Statistical Package for Social Scientists (SPSS) and presented in tabular form, bar graphs and also correlation to analyze the relationship between the variables under study.

The findings in the study revealed that there was a positive and significant relationship between internal controls and resource utilization. Further more the findings revealed that there was poor segregation of duties, inadequate security for the organization’s resources, access to resources by unauthorized personnel and poor implementation of monitoring policies and procedures, therefore internal controls were not effectively used to enhance resource utilization in Care Uganda.

The researcher recommended that there should be an organization chart showing clearly the responsibilities of each individual in order to define reporting lines for all operations in the organization, put up physical controls to limit direct access of the assets, proper book keeping needs to be carried out in order to avoid losses of assets, routine and automatic checks need to be conducted and only responsible officials should be the ones to authorize transactions and approvals should be segregated from authorization. The study therefore, concludes that internal controls have a purpose and there is a significant relationship between internal controls and financial performance in Non-Government Organizations.

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