Factors resulting in inherent internal control limitations at Tshwane University of Technology.
Mzimba, Provia Paballo
Mzimba, Provia Paballo
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Abstract
Since not much research has been conducted on inherent limitations in the South African higher education sector (HES), this study evaluated factors resulting in inherent internal control limitations at the Tshwane University of Technology (TUT). This study has become increasingly important as public higher education institutions (HEIs) witness instances of corruption, maladministration and poor governance due to weak internal control systems. The inherent internal control limitations result in the ineffective functioning of internal controls – from soft to hard controls. Apathy, breakdowns in established controls, collusion, genuine errors and mistakes made by people, ineffective supervision, improper management override, and unresponsive to changing environment are pointed to as challenges, among others. Because of these challenges, TUT relies on its own control systems to prevent, detect and correct any possible risk exposures arising from inherent limitations. To achieve the primary research objective, the study employed two secondary objectives. Thereby, the existence of inherent internal control limitations at TUT was identified. These were benchmarked against inherent internal control limitations in literature, and possible factors that influence the presence of inherent internal control limitations were identified. A complete literature review achieved these objectives, which provided noticeable insight on the ways and means of mitigating inherent
limitations. The literature discusses what is needed to manage identified limitations. To achieve these research objectives, the study employed a positivist paradigm and quantitative research approach. Thus, the study was conducted using a questionnaire, administered to the targeted population. The targeted population consisted of 128 heads of departments (HoDs) and managers from academic departments and support units across the TUT environments. The total number of responses received was 67, resulting in an overall response rate of 52.3%. This study was limited to TUT middle management groups responsible for the implementation of the established policies. The instrument used was pilot tested with the members of the Institute of Internal Auditors South Africa (IIASA), academic managers and university of technology (UoT)employees who met the research criteria for reliability and validity. The collected data were analysed using statistical techniques. The data analysis consisted of both descriptive and inferential statistics. The analysis focused on analysing the results in three categories of the questionnaire: firstly, the personal information of the respondents and information about their position in the university; secondly, the state of internal control within the university environment; and thirdly, the presence of inherent internal control limitations. The empirical data has been analysed using the Statistical Package for the Social Sciences (SPSS) (version 27). Subsequently, the Mann-Whitney test was applied to test for the differences between the managers and HoDs. The Kruskal-Walli's test was also conducted to test for the differences between the numbers of years the respondents were employed in their positions and their
perception of the causes of inherent internal control limitations. The study results indicate that all 13 inherent internal control limitations are present
within TUT. Respondents agreed and strongly felt that inherent limitations inhibits the effective functioning of the university systems. Furthermore, the variables were each examined for their effect on the inherent limitations. The results show that all factors demonstrated a positive correlation that inherent internal control limitations hinder the functioning of internal controls at TUT. Therefore, the results of this study demonstrate that these inherent limitations have an adverse effect on the systems of internal control. The findings corroborate with the literature reviewed on the secondary
research objectives. The main contribution of this research is the fact that it highlights the essential role of internal control. The controls should be monitored by management and evaluated by internal auditors to reduce and identify possible risks which could not be managed and mitigated through the established and available policies and procedures.
Description
Submitted to the Faculty of Economics and Finance for Magister Technologiae, in the Department of Auditing, Faculty of Economics and Finance, at the Tshwane University of Technology.
Date
2021-10-01
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Tshwane University of Technology
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Keywords
Internal audit, Internal control, Inherent limitation, Universities of Technology, Higher institutions, Governance, Risk management, Internal control.