Effect of Internal Controls on Resource Mobilization of Non-Governmental Organizations in Nairobi County

Abstract

NGOs operate in diverse environments and deal with different types of stakeholders, they face several risks, including financial fraud, mismanagement, and non-compliance with legal and regulatory frameworks. They are therefore vulnerable to fraud and embezzlement due to their reliance on donations and grants, lack of oversight, and decentralized operations. This study sought to determine the effect of internal controls on resource mobilization of non-governmental organizations in Nairobi County. The study adopted a descriptive research design. The target population of the current study was 64 humanitarian NGOs that are based in Nairobi County. While the unit of analysis was the 64 humanitarian NGOs, the unit of observation were two respondents from finance and project management departments of these organizations. The study adopted a census sampling technique where the entire sample size of 128 was used. Primary data was collected using a structured questionnaire. A regression model was used to test the effect of Internal Controls on the resource mobilization of Humanitarian NGOs in Nairobi County. The results indicated that internal control has a positive and significant effect on resource mobilization of Humanitarian Non-Governmental Organizations in Nairobi County (B = 0.273; t = 2.524 > 1.96, = P-Value = 0.013 < 0.05). The results of the first hypothesis revealed that Internal Control has a positive and significant effect on resource mobilization of Humanitarian Non-Governmental Organizations in Nairobi County. The study concluded that Humanitarian Non-Governmental Organizations in Nairobi County ought to increase their internal control measures in order to boost their resource mobilization. The study recommends that Humanitarian non-governmental organizations need to implement internal control measures, such as control environment, risk assessment and information & communication, in order to improve their financial accountability. To reduce the likelihood of fraud and to raise everyone's awareness of the expectations for adhering to established standards, it is also necessary to have a clear understanding of the significance of internal controls and the division of duty among all the employees. Keywords: Internal Controls, Resource Mobilization & Non-Governmental Organizations