Challenges of implementing internal control systems in NonGovernmental Organizations (NGO) in Kenya: A case of FaithBased Organizations (FBO) in Coast Region

Abstract

This paper seeks to expose the challenges of implementing internal control systems in NGO sector in Kenya with particular reference to FBOs in coast region of the country. The study opens with a brief introduction of how NGOs operates and its reliance on informal management structure. It then demonstrates how internal control is crucial aspect of an organization's governance system and ability to manage risk. Challenges of implementing internal controls were looked at in three main perspectives; the limitations of financial controls, the scope of functionality of corporate governance controls and the practicability of ethics and compliance controls, in FBOs. The evidence shows that FBOs in coast region mostly relies on traditional and informal control structure to fulfill their welfare agendas. Formal internal control systems as practiced in the corporate world have not fully been incorporated in the FBOs control systems. However, management controls that incorporate internal controls along with traditional welfare goals are considered a useful starting point in the move towards