INTERNAL AUDIT PRACTICES AND FINANCIAL ACCOUNTABILITY OF PUBLIC SECONDARY SCHOOLS IN RIFT VALLEY REGION, KENYA

Abstract

Public secondary schools are expected to uphold high standards of financial accountability, guided by effective internal audit practices that ensure transparency, proper use of financial resources, and ethical financial stewardship. Reports from the Office of the Auditor General and the Ministry of Education have highlighted inconsistencies in financial accountability in schools within the Rift Valley, indicating systemic issues that warrant deeper investigation. Cases of embezzlement and inflated cost of goods and services, by awarding contracts to unqualified suppliers at inflated prices. The audit also found that several schools failed to maintain proper financial records, with less than 10% of the audited schools having up-to-date financial records. Therefore, this study investigated the effect of internal audit practices on the financial accountability of public secondary schools in the Rift Valley Region. Specifically, the study sought to establish the effect of system audit, audit review, investigative audit, and infrastructure audit on the financial accountability of public secondary schools in the Rift Valley Region. This study was premised on a theoretical foundation based on the positive accounting theory, accountability theory, agency theory, and contingency theory. The research adopted a causal and correlational research design. The target population of the study was 84 respondents. The study involved a census; thus, data collection from every member of the population was necessary, given the small population size. The unit of inquiry consisted of secondary school auditors. The researcher relied on primary data sources, which were collected using a structured questionnaire. A pilot study included eight school auditors in Kakamega County, and validity and reliability were tested. Structured questionnaires were used as the instruments for data collection. Data were analyzed using descriptive statistics (mean and standard deviation) and inferential statistics (Pearson correlation and regression). The analyzed data were presented using tables. The study found that there was a strong positive correlation between the independent variables (p<0.05), and systems audit (p: 0.004, t; 2.936), audit reviews (p: 0.001, t; 3.437), investigative audit (p: 0.015, t; 2.455), and infrastructure audit (p: 0.000, t; 7.530). The study found that the systems audit R-Square of 0.633, audit review R Square of 0.612, investigative audit R-Square of 0.563, and infrastructural audit R-Square of 0.42 had a positive and significant influence on the financial accountability of public secondary schools in the Rift Valley Region. In conclusion, the null hypotheses for all internal audit practices are rejected, indicating that these practices are essential components for improving financial accountability in schools. The study recommends that auditors involve other stakeholders, such as the Board of Management and teachers, in the audit process to produce an effective audit report. Schools should ensure the successful implementation of audit reports, fostering a culture of accountability within the school community. The study findings will enable the Ministry of Education and policymakers to obtain more information that could help them formulate policies and standards to improve financial accountability in public secondary schools in Kenya and other government-owned organizations.