Internal control systems in non-bank financial institutions a case study of some selected credit unions in Ghana

Abstract

The purpose of this study was to assess the effectiveness of internal control systems in some selected Co-operative Credit Unions in Ghana. A descriptive research design was used for the study whereas quantitative research approach was employed. Stratified random sampling was used to sample one hundred and thirty two (132) respondents from a possible population of one hundred and eighty two (182) after which a structured questionnaire was used to collect a primary data. Descriptive analysis was used by applying the Statistical Package for the Social Sciences (SPSS) to analyze the primary data collected. The findings of the study indicated that the company’s Board members are solely mandated to initiate policies on internal controls and ensure that they are fully implemented by the company’s management. The findings of the study also revealed that, majority of the respondent accepted that the credit union manager was responsible for authorizing payment on behalf of the union. Nevertheless, just a few respondents believed that the Board is responsible for authorizing payment on behalf of the union, while others said it is the responsibility of both the Manager and the Board. In furtherance, the findings revealed that management supports internal audit’s personnel by making sure that internal audit is large enough to efficiently carry out its duties. The study recommended that the management of the credit union should provide the internal audit department with a procurement policy as well as constituting procurement committees to tackle issues concerning procurement with more diligence among others. It is further recommended that management should ensure that adequate training on internal controls is given to the workers and management, effective monitoring and evaluations should be organized intermittently and out operational policies and manuals should be given to members in order to ensure effective implementation of internal controls.