This study is on survival and growth in public organization. The primary objective of this project work is to ascertain the impact of internal control system assessment in government establishment. Internal control is defined as a process affected by an organizations people and information technology (I.T) system, designed to help the organization accomplish specific goals or objectives. It is a means by which organizations resources are directed, monitored and measured. It plays an important role in preventing and detecting fraud and protecting the organizations resources both physical (e.g. machinery and property) and intangible (e.g. Reputation and intellectual property such as trade marks). Two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of power holding company of Nigeria Portharcourt, Rivers State was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study.
- Background of the study
There is a purpose in every organization, which includes making a product and/or rendering some services at a price. According to Oxford Learners Dictionary (2007), an organization can be said to be a group of people who form a business, club etc. together in order to achieve a particular aim. It can also be defined as a business or administrative concern united and constructed for a particular aim. When we discuss organization, we have various classes among which are service organization and social organization etc. All these organizations have in mind the aim of continuing if not for eternity, a given period of time. (Unamka & Ewurum, 1995 1, 2, 3) For an organization to carry on its business there must be some factors put in place for the smooth running of the organization management, man-power, materials, money and machines. These need to be well coordinated in order for the success of the organization to be achieved. They are used by a group of persons known as management; neither can management exist without organization the two are inseparable twin. (Unamka &Ewurum, 1995:65) Good management weaves together the various parts of organization so that all factors function as a united body. Management refers to the group of executives or officials of a company who directs efforts towards common objectives by using available resources (Unamka & Ewurum, 1995:66) management can also be said to be a process of planning, organization to have an integrated system that will aid the achievement of organization objectives (Musselman & Hughes, 1981). Effective management leads to purposeful, well coordinated, goal oriented and goal directed activities. As earlier social organizations have in mind “continuity” and “survival” as they are being run for an organization to survive and continue existing without going bankrupt, or said to be illiquid, i.e. being its inability to meet up with its responsibilities as and when due, it must ensure the safety of its assets, cash and also the accuracy and reliability of its records, it should ensure that it institutes a system of control, strong enough to ensure such. This system is what is known as internal control system. According to the Auditing practices committee (APC 1980), internal control system can be defined as the whole system of control, financial or otherwise, established by the management in order to carry on the business of the enterprise in an orderly and efficient manner, ensure adherence to management’s policies, safeguard the assets and secure as far possible the Completeness and accuracy of the records. The individual components of an internal system are known as „controls “or „internal controls‟. Internal control, according to Wikipedia, is defined as a process affected by an organization, people and information technology (I.T) system designed to help the organization accomplish specific goals or objectives. It is a means by which organizations resources are directed, monitored and measured. It plays an important role in preventing and detecting fraud and protecting the organizations resources. At the organizational level, internal control objectives relates to the reliability of financial reporting, timely feedback on the achievements of goals, compliance with laws and regulations and the prevention and detection of fraud. At the specific transaction level, internal control refers to the actions taken to achieve a specific objective such as the procedure for payment of money for services rendered Most organizations, of course, desire growth in other to prosper, not just to survive. Organizational growth however, means different things to different organizations. Indeed, there are many parameters a company can select to measure its growth. The most meaningful yardstick is one that shows progress with respect to the organizations stated goals (Crosby 1990). Other financial data are often utilized as “bottom-line” indications of growth In order to survive, organizations need to ensure that their revenue exceeds their cost, in this way they will be profitable. To ensure growth and survival, the internal controls established at each level of the organizations hierarchy should be fully understood and implemented. These internal control systems are not established without objectives, these objectives range from insuring that all monetary transaction conducted by the organization are in line with the company’s activities, to compliances with government regulation, efficiency in the completion of tasks and safety and security of employees and customers. It is against this background that this study seeks to look at the place, importance and role of the internal system in the survival and growth of a public organization.
- STATEMENT OF THE PROBLEM
When we refer to internal control system, we talk of a system which will enable an organization achieve its objectives, we talk of a system which is very important to the existence of an organization, we talk of a system which will forestall the perpetration of acts that can act as a clog in the wheel to the success of an organization. This system is an all round system, that is to say, it encompasses both financial and non-financial control in realizing the goals and objectives of running the organization in an orderly manner, safeguarding the assets of the organization and also ensuring the accuracy and reliability of the organization’s records. We might not really understand the impact of internal control system on an organization’s performance until probably, we run an organization void of internal control system. The non-institution of internal control system in an organization is detrimental to the continual growth and survival of that organization. Non institution of internal control system in an organization result in improper keeping of records which could lead to the late preparation of accounts, doctoring of books of accounts, misappropriation of funds which are meant to be used for planning, decision making etc. illegal transactions being transacted, pilferage, misuse of fixed assets etc. improper keeping of records can also lead to inability to ascertain the organization’s actual assets; goods in stock, which could breed pilfering.
Lack of proper record keeping, controlling of proceedings or actions in an organization could lead to concealing of errors and fraud that might crop-up to bring down an organization. The non-institution of internal control system could lead to inability of the organization to make proper decisions and plan ahead effectively. When an organization fails to plan, definitely it will forestall the growth of the organization; make the organization to start dwindling and struggling for survival, which will then bring the organization to an end.