Abstract:
The national sub county treasuries in Kenya are responsible for managing public funds at the sub county level. To translate this responsibility into concrete reality, the national sub county treasuries employ internal control systems. It is still not clear whether internal control systems have been effective in the management of public funds. This study therefore sought to examine the effectiveness of internal control systems in management of funds in the public sector at national sub county treasuries in Kenya. The study was guided by three objectives which include: to determine the effectiveness of control environment on management of funds; to establish the effectiveness of risk assessment on management of funds and to examine the effectiveness of control activities in management of funds. The study was based on the assumption that all independent variableswould remain constant through the period of the study. The study employed a descriptive research design using qualitative and quantitative approach. The target population was620 accountants and internal auditors from 310 national sub county treasuries. The study used cluster and purposive sampling techniques to select a representative sample of 184 respondents. Both primary and secondary sources of data were used: primary data was collected using questionnaires while secondary data was gathered from findings of previous studies on internal control systems and reports related to funds management at the sub county treasuries. The primary data obtained was analyzed through quantitative and qualitative analysis. Regression analyses were used to examine whether risk assessment, control activities, and control environment had an influence on funds management. The study revealed that internal control systems had a significant relationship with the management of funds. The research findings imply that internal control systems are a significant positive predictor of funds management. It was revealed that national sub county treasuries had challenges with risk assessment. The study findings indicated that internal control systems; more specifically, risk assessment, control environment, and control activities are significant areas that national sub county treasuries should focus greatly to improve the management of public funds. The findings are valuable to managers of national sub county treasuries and are a basis for enhancing the management of public funds at the national sub county treasuries in Kenya. It is recommended that national sub county treasuries should ensure that the right structures are established to support internal control systems including control environment, control activities, and risk assessment.
