| dc.description.abstract | The study aimed at investigating the impact of internal control on the operational efficiency of
NGOs based in Nairobi. A sample of fifty NGOs was selected and interviewed to form the basis
of this project. Information was collected by use of a questionnaire which made use of both open
and closed ended questions. The questionnaire used a three point likert scale which ranged from
‘Yes’, ‘No’, and ‘I don’t know’. The collected data was entered into a statistical package for
social sciences for analysis.
The analysis indicated that internal controls in the NGOs based in Nairobi were determined
largely by the organization structure. It is the top management that decided on how the resources
received from donors and other financiers were to be allocated and distributed to the
beneficiaries. Cash management was ranked second internal control factor affecting NGOs
operational efficiency. NGOs with good cash management were in a position to attract many
sources of funds for their operations and as such, this called for proper use of resources at their
disposal. They ensured this by putting in place proper policies and procedures to guide their
operations. NGOs with well structured organizational structures had well structured policies and
procedures on how activities were run. Higher operational efficiency was registered in big well
known NGOs which lead to controlled internal controls by the funding partners.
The findings indicate that the five factors which include organization structure, payroll
management, procurement, cash management and asset management affect operational
efficiency to 82.5% as depicted by the correlation and coefficient of determination. The other
factors not investigated in this study, constitute the remainder 17.5%. From these findings, it is
clear that internal control impacts operational efficiency. | en |
