Effect Of Internal Control Elements On Organizational Performance Of Level-5 Public Hospitals In Nairobi County

Abstract

Several companies around the world have recently collapsed, despite the presence of internal controls. This has raised questions about the significance and power of internal control, especially when it comes to an organization's organizational performance. The general objective of this research study was to look into the effects of internal control elements on the organizational performance of level-5 hospitals in Nairobi County, Kenya. The study was guided by specific objectives. A descriptive research design was used in this survey. The population of this study was 68 staff in the accounts/finance, administration, ICT and operations departments at the 3 level-5 public hospitals in Nairobi County (Mama Lucy Kibaki, Pumwani Maternity and Mbagathi District Hospital). The research used census method where all 68 respondents were involved in the study. Data was collected using questionnaire. The statistical package for social sciences (SPSS) was used to analyze the data. Descriptive statistics of percentages, means, and frequency tables were used. The study concludes that control environment has a positive and statistically significant effect on the performance of level 5 public hospitals. Risk management has a positive and significant effect on performance of a level 5 public hospitals in Nairobi county. Control activities have a negative and an insignificant effect on performance of a level 5 public hospitals. Information communication has a positive and significant effect on performance of a level 5 public hospitals in Nairobi County. Finally, the study concludes that monitoring activities has a positive and significant effect on performance of a level 5 public hospitals in Nairobi County. The study recommends that strategic direction and priorities of the organization should be established, and this should serve as the foundation for the development of methods for assessing risks and operating effectiveness. Risks must be addressed at all levels of the organization, and the necessary actions must be taken to mitigate them. Internal and external factors can both pose and mitigate risks. It is necessary to put in place control activities such as policies and procedures that will aid in the implementation of management directives. Top management must send a clear message to all employees that their control responsibilities must be taken seriously in order for them to carry out their responsibilities effectively. At the end of the study, it is recommended that internal control systems be monitored, which is defined as a process that assesses the overall quality of the system's performance over an extended period of time.