Internal Audit: A ‘watchdog’ for financial management in Kenya’s Technical and Vocational Education and Training (TVET) Institutions

Abstract

In Kenya, Technical and Vocational Education and Training (TVET) consists of technical training institutions, Micro and Small Enterprises (MSE) centers, youth polytechnics and National Youth Service (NYS) skill development center. In Kenya, TVET is a very expensive project in terms of physical facilities, equipment, training materials and trainers’ salaries. According to TVET Authority Act for 2013, the sources of funds to facilitate the TVET programs consist of money provided by Parliament and from any other source provided for, donated or lent. In this regard, there is need for sound financial management plans for TVET institutions. This paper sought to answer the research question, what is the role of internal audit that can be used by Kenya’s TVET institutions in effective management of their finances? The study was guided by Porter’s competitive advantage theory which states that organization should perform at higher levels than its contemporaries. In this regard, the study intended to find roles played by internal audit to help in managing finances of Kenya’s TVET institutions well so as to enhance their operations beyond local or national markets. Using library research design and purposive sampling strategy to select three libraries in the month of March and April 2014, secondary data was obtained and analyzed using qualitative techniques. The findings from the study identified three roles of internal audit namely; evaluation of financial internal control system, financial risk management and business process improvement.The study concluded Kenya’s TVET institutions should be able to improve their technical understanding through adopting the internal audit as a vital tool for effective financial management. Furthermore, there is need for improved skills in internal control system implementation, use of computerized internal audit and appointment of internal audit committee to enhance the roles of internal audit.