EFFECT OF INTERNAL CONTROL SYSTEMS ON MANAGEMENT OF REVENUE FUNDS IN COUNTY GOVERNMENT OF NAKURU, KENYA

Abstract

An Internal Control System (ICS) is a structured framework designed to monitor and evaluate an organization’s processes and operations, ensuring alignment with established objectives. This system is essential for safeguarding assets, enhancing the reliability of financial reporting, and ensuring compliance with relevant laws and regulations. By systematically assessing the effectiveness and efficiency of operations, the ICS facilitates the achievement of strategic goals and mitigates risks associated with operational inefficiencies and potential fraud. This study aimed to investigate the impact of internal control systems on the management of revenue funds in the County Government of Nakuru, Kenya. Employing a descriptive research design, the research targeted a population of 504 employees from the Nakuru County Treasury Department. A simple random sampling technique was utilized to select a sample of 84 employees, with sample size determined using the Nassiuma (2000) formula. Primary data were collected through closed questionnaires administered via a drop-and-pick method. Data analysis was conducted using SPSS (Version 23), employing descriptive statistics, correlation analysis, and both simple and multiple regression analyses. The findings indicated that the internal control systems significantly affects revenue management in the County Government of Nakuru. Based on these results, the study recommends that the County Government of Nakuru invest in robust monitoring procedures. This involves dedicating resources to systematic reviews of financial processes, transactions, and compliance, thereby ensuring effective and efficient management of revenue funds. The significance of this study lies in its potential to inform governance structures, providing valuable insights for improving financial management practices within the county government.