Internal Control and Organizations’ Performance in Non-Governmental Organizations: A Case Study of Tadamun Social Society (Tss) In Puntland State Of Somalia

ABSTRACT The study sought to establish a relationship between internal controls and organization’s performance in non-governmental organization a case study of Tadamun Social Society (TSS) Organization in Puntland state of Somalia. The study objectives were; to examine the effectiveness of internal controls used in Tadamun Social Society (TSS), to establish the level of performance in Tadamun Social Society(TSS) and to establish a relationship between internal control and organization’s performance in Tadamun Social Society (TSS) Organization. A cross sectional survey was used in the course of the study. Both qualitative and quantitative data was gathered in order to establish the relationship between the independent and dependent variables, so as to examine how internal controls are used in Tadamun (TSS) and therefore account for the performance levels. The study comprised of 250 as a target population where by 154 respondents were sampled and these were; 18 accounting and finance officials, 25 internal auditors, 37 human resource officers, 19 field officers, 30 procurement officers and 25 directors of (TSS) Organization. Simple random sampling approach was used during the study. Purposive sampling was also used to select respondents for interviews in order to attain the purpose of the study. Data was collected from primary and secondary sources using questionnaires and interviews. The researcher used Statistical Package for Social Sciences (SPSS) to analyze data. It was found out that the level of effectiveness of internal controls used in Tadamun Social Society (TSS) had an average mean of 2.49 which was equivalent to low and the level of performance in Tadamun Social Society (TSS) is poor an average mean of 2.50 equivalent to agree on the Likert Scale. The study concludes that internal controls used in Tadamun Social Society (TSS) were ineffective and unsatisfactory, the level of organizational performance was found to be inadequate and a significant positive relationship between internal controls and organizational performance was established to exist. It also recommends that there is also need for the management has put in place as guidelines to control information and transaction procedure so as to achieve the organization’s objectives. This can be through employing effective internal control tools thus organizational performance.

 TABLE OF CONTENT

CHAPTER TWO 11

LITERATURE REVIEW 11

2.0 Introduction 11

2.1 Theoretical review 11

2.2 Conceptual Frame Work between internal controls and organizational performance

13

2.3 Related studies 14

CHAPTER THREE 25

METHODOLOGY 25

3.1 Introduction 25

3.2 Research design 25

3.3 Research population 25

3.4 Sample Size 26

3.5 Sampling methods 26

3.5.1 Simple Random sampling 26

3.5.2 Stratified random sampling 27

3.6 Data Sources 27

3.7 Data collection instruments 27

3.7.1 Questionnaire 27

3.7.2 Interviews 28

3.8 Validity and Reliability of Instruments 28

3.8.1 Validity 28

3.8.2 Reliability 29

3.9 Data gathering procedures 29

3.9.1 before the administration of the questionnaires 29

3.9.2 During the administration of the questionnaires 30

3.9.3 After the administration of the questionnaires 30

3.10 Data Analysis 30

3.11 Ethical Consideration 31

3.12 Limitations and problems encountered 31

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CHAPTER FOUR 32

DATA PRESENTATION, INTERPRETATION AND ANALYSIS 32

4.1 Profile of the respondents 32

4.2. The effectiveness of internal controls used in Tadamun Social Society (TSS) 33

4.3. The level of performance in Tadamun Social Society (TSS) 36

4.4. Relationship between internal control and organizational performance of Tadamun

Social Society (TSS) 39

4.5. Overall study correlation 40

4.6. Multiple Regression Table 40

4.7. Overall Study Regression Model 41

CHAPTER FIVE 42

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 42

5.0. Introduction 42

5.1. Findings 42

5.2. Conclusions 44

5.3. Recommendations 44

5.4. Areas for further research 45

References 46

Appendix IA: QUESTIONNAIRE

APPENDIX IB: INTERVIEW GUIDE v

APPENDIX II: TIME FRAME viii

APPENDIX III: STUDY BUDGET ix

APPENDIX IV: RESEARCHER’S CURRICULUM VITAE x