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Anne Wangeci Njagi - Master of Business Administration, School of Business, University of Nairobi, Kenya

Dr. Mirie Mwangi - Lecturer, School of Business, University of Nairobi, Kenya


This study investigated on the effect of internal control practices adopted by Kiambu County Level Five Hospitals on revenue collection. The study utilized descriptive research design. The study targeted 3 level five hospitals in Kiambu County namely; Kiambu, Thika and Gatundu. The study gathered primary data and secondary data. Primary information was gathered using structured questionnaires. Secondary information was gathered through literature review. Analysis of the quantitative data was done via SPSS and tables were used to present the results. A chi-square was used to study the correlation between internal controls and revenue collection. The descriptive analysis indicated a decreasing trend in revenue collected by level five hospitals in Kiambu County since 2013 except in 2015 when there was a slight increase which was followed by a decline in 2016. The findings found a significant correlation between environment of controls and collection of revenue and thus an increase in environment of controls leads to revenue collection increase by the level five hospitals in Kiambu. Integrity in level five hospitals is maintained and management is always committed to ethical values business practices. Level five hospitals in Kiambu provides discipline and structure and their management are committed to competence as well as influencing the control consciousness of its people in the hospitals. Study also established that level five hospitals management in Kiambu County ensures that fraud is prevented by putting in place fraud detection mechanisms and audits which ensure that effective controlled reporting is done. The hospitals examine and evaluate the effectiveness of management control systems and provide re-assurance that the internal control systems are adequate. A strong positive correlation between internal audit function and revenue collection exist and therefore an increase in internal audit function leads to an increase in the revenue collection by the level five hospitals. Further, the study established that an increase in monitoring control measures leads to an increase in the revenue collection. Level five hospitals management adequately monitors the quality of the systems’ performance and effectiveness to ensure collection is achieved. Monitoring has been allowing the hospitals to determine whether or not policies implementation procedures are followed while the regular supervision and managing activities help in reducing wastage of revenue. Also, monitoring in the level five hospitals ensures that the findings of audits and other reviews are promptly resolved. Finally, the study revealed that a significant association between the risk assessment and the revenue collection exists. The study suggests frequent evaluation of control environment and activities. This study reveals a decreasing trend of revenue collection of level five hospitals in Kiambu County since 2013 with a minor increment in 2015, therefore this study recommends another study to be carried out to establish the factors which are leading to a decrease in the revenue collection in level five hospitals in Kiambu County.

Full Length Research (PDF Format)