The Impact of Internal Control on the Performance of Faith-Based NGOs in Accra

Abstract

The global financial crisis has caused a re-awakening of the donor community’s desire to monitor the activities of NGOs operating in various parts of the world. Recent operational and financial scandals involving some Africa-based NGOs are causing uneasiness among financiers of faith-based NGOs in sub-Saharan Africa. Management of such NGOs fears that they must strive to avoid operational inefficiencies in their efforts to achieving intended objectives. Many believe internal control holds the key to achieving such desires. This study examines the current level of internal controls operated by seven faith-based NGOs and how that is affecting their performance. Primary data obtained using self-administered structured questionnaire and the Statistical Packages for Social Sciences (SPSS 20.0 version) was used to analyse the data. The study found that internal control systems significantly enhances the performance of the faith-based NGOs, in two aspect; economy and efficiency but does not necessarily make the them effective. Again, we found that existing internal control systems functioned satisfactorily in four components of the COSO model except risk assessment where the procedures were found to be very weak. We recommend that Management of faith-based NGOs should have holistic measures in place to constantly assess its effectiveness and impact on operations. Moreover, management should institute a rigorous risk management framework which will be able to detect all risk inherent in the internal control system to improve efficiency.

Keywords: Internal Control, Faith-based NGOs, Performance, Accra