Thesis:

Analysis of internal control system on performance of Seventh day adventist organizations: a case of west Kenya union conference, Kenya

Internal controls are key organization performance requirements as they play a very important role in organization development. The religious sector plays a very vital part in every economy or country as it offers several important services not limited to spiritual nourishment to the populations that demand that they be managed effectively. West Kenya Union Conference (WKUC) is a religious entity serving both its members and the public as well hence its sound operation is key to the stakeholders. The main aim of this project was to ascertain the bearing of internal controls on the performance of Seventh-day Adventist (SDA) West Kenya Union Conference (WKUC) entities. The investigation depended on various theories such as Agency Theory, Stewardship Theory, and Contingency Theories to enhance the general understanding of internal control and its effects on organizational performance. The population of the study consisted of all chief Finance officers and senior accountants of the 35 entities within WKUC, including schools, hospitals, and tithe-based institutions. The investigation involved the use of both primary and secondary data sources. Primary data were collected using structured questionnaires, while secondary data were obtained from existing library and institutional records to support the analysis, with pilot study conducted to validate the research instruments before distributing the final questionnaires for the main study. The data collected were analyzed using both descriptive statistics, such as means and percentages, to illustrate average or commonly indicated responses, and inferential statistical methods, such as regression, to determine the level of connection between the variables—internal control as the independent variable and performance as the dependent variable in the WKUC entities. The model was statistically significant at (F= 18.196, p < .001), with a coefficient of determination (R2) of 0.521, indicating that approximately 52.1% of the variation in organizational performance could be explained by internal control components and the moderating variables. The models adjusted R2 was 0.492, with a strong correlation coefficient (R=0.722), suggesting a substantial positive relationship between internal controls components. Information and communication had a strong and statistically significant positive effect on performance (β =0.842, p < .001) suggesting it is a key driver of effectiveness in WKUC entities. Monitoring Activities showed a significant negative effects (β =-0.855, p =.022) indicating that poor monitoring could hinder performance. Control activities (β = 0.449, p =.134) and Control Environment (β =-0.266, p = .477) were not statistically significant predictors on their own. These findings emphasize the critical role of communication system in strengthening internal control effectiveness and highlight the need to reassess monitoring framework that may negatively affect organizational outcomes. The study recommends enhanced staff training, improved information flow, and strategic redesign of monitoring system. Future research should explore the moderating role of digital technologies and organizational culture in internal control practices as well as conduct comparative analysis across other religious and non-profit sectors for broader applicability.