Budgeting process, internal control and financial performance of secondary schools in Kumi district

Abstract

The study explored the mediating effect of internal controls on the relationship between budgeting processes and financial performance of secondary schools in Kumi District. The study was guided by the following specific objectives; to establish the effect of budgeting process on the financial performance of secondary schools in Kumi District; to analyze the effect of internal controls on the financial performance of secondary schools in Kumi District; to find out the relationship between internal controls and the budgeting process of secondary schools in Kumi District; and to examine the mediating role of internal controls in the relationship between the budgeting process and financial performance of secondary schools in Kumi District. The study considered a descriptive research design. The study population of 165 comprised the staff establishment of four (4) secondary schools in Kumi District. The schools included Dr. Aporu Okolo Memorial Secondary School, Kumi Seed Secondary School, Atutur Seed Secondary School, and Wiggin Secondary School. The sample used was 165 respondents obtained by census method out of whom 134 returned completed and usable questionnaires. Descriptive statistics of frequencies and percentages was used to obtain specific findings, while Pearson Product Moment Correlation and regression analyses were used to obtain major findings. Regression results revealed that a) there is a significant effect of budgeting process on the financial performance of secondary schools in Kumi District [β = .879, t = 2.417, p<0.0001]; b) there is a significant effect of internal controls on the financial performance of secondary schools in Kumi District [β = .371, t = 1.993, p<0.0001]; c) there is significant relationship between the budgeting process and internal control practices of secondary schools in Kumi District [r = .354**, p < 0.01]; and d) internal control partially mediates the relationship between budgeting process and financial performance of secondary schools in Kumi District. The study concluded that although the budgeting process itself is a critical factor in determining financial success, its impact is only fully realized when complemented by strong internal controls. These controls act as a safeguard, ensuring that the budget is effectively implemented and financial resources are managed efficiently. The study recommends that schools should adopt a participatory budgeting approach that involves input from key stakeholders, including teachers, parents, and community members. They should formally integrate internal controls into every stage of the budgeting process. Additionally, schools should also establish a system for regularly evaluating both their internal controls and budgeting processes to ensure they are functioning effectively and contributing to desired financial outcomes.