Abstract:
An effective internal control system should be able to provide managers with the means
to increase accountability for their plans and to obtain reasonable assurance that the
programs they direct meet established goals and objectives. Fraud related practices
have increasingly been reported in Kenya public sector, despite of the government
instituting internal controls systems. The overall study objective was to establish the
effectiveness of internal controls on fraud detection and prevention in the public sector
in Kenya. It addresses four specific objectives to establish the effect of the control
environment and activities, risk assessment, information and communication and
monitoring and evaluation on fraud detection and prevention at the Civil Registration
department Kenya. The study was guided by the fraud triangle theory and self-control
theory. Cross-sectional survey research design was used with a sample of 260 staff
from various units in the Civil registration department. These were Headquarters, Field
services, Central registry, and Nairobi registry. The results show that Control activities
and environment (ß1=0.158, P=0.002), risk assessment (ß2=0.514, P<0.001),
information and communication (ß3=0.128, P=0.025), and monitoring and evaluation
activities (ß4=0.117, P=0.028) significantly and positively influence fraud detection
and prevention. In summary, the study concludes that there is a significant positive
relationship between internal control systems and fraud detection and prevention in the
department of civil registration in Kenya. The five identified components of effective
internal controls: control environment and activities, risk assessment; information and
communications and monitoring, should be applied in a collaborative linkage to form
an integrated system that reacts dynamically to changing conditions. The internal
control system should be merged with the operations of the civil registration
department to enhance detection
and prevention of fraud. The study therefore
recommends that effective and efficient internal control policies and procedures should
be put in place to detect and prevent fraud within government departments and other
institutions.
