Internal control effectiveness of public universities in Ethiopia: a case study at Jimma University
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The objective of this study was to assess the effectiveness of internal control system of public universities in Ethiopia by taking Jimma University as a case study. Theoretical framework of internal control suggested by COSO which included Control environment, Risk assessment, Control activities, information and communication, and monitoring as components of effective Internal control were used to guide the study. To conduct the research, both primary and secondary data were used. To gather primary data,a questionnaire survey was administered. A questionnaire developed on the basis of the study framework was pilot tested and commented by the staffs in the accounting department of Jimma University. The final questionnaires were distributed to academic and administrative staffs of the university selected using a quota sampling. Out of 318 questionnaires 203 were fully responded and used in the analysis. Based upon the fully responded questionnaires 72.40% of the respondents are administrative staffs and the remaining 27.60 % are academic staffs. Further, secondary data including, Journals, auditors' report, minutes of external auditors exit meeting with university management, manuals and working documents were considered to support data gathered through questionnaire survey. Qualitative and quantitative data analysis techniques were employed. The result of the study showed that, the internal control system of the university has some weakness with respect to each component of internal control. The major finding behind the ineffectiveness of internal control system that requires the management attention as per the study includes: low level of employee awareness as to the mission and vision of their organization, handling jobs without a clear guideline and understanding of the job descriptions, inadequately staffed work units, lack of training on professional ethics in the area of procurement, finance and resource management, loss control on efficient utilization of resource including vehicles, drugs, medical supplies and other resources of the university. Low level of lower level mangers participation on planning and inability of identifying risks associated with execution of the plan which makes mangers busy in crises management instead of taking proactive actions. Lack of proper communication and coordination between administrative and academic process managers, mainly finance and human resource departments do not exchange data concerning employment status and there is a problem of effectively controlling payroll and nonpayroll related pavements. Further in the management of asset as well, there is no periodic and regular counting and also timely and proper disposal of retired assets. The monitoring aspect of the internal control is also associated with weakness out of which comparison of budget and actual performance is not conducted at all level. Even though the university established a clear structure and communication channels, there is no swift flow of information through different levels and organs of the organization. The current study focused on a single university and used a descriptive analysis technique. Hence, future study that incorporated large number of universities and follow explanatory study design need to be conducted to know the major challenged and to improve internal control system of public universities in the country.