Declaration: Student Name: Khadar Hassan and Aidarus Muhumed Signature - Date

Declaration
I, Aydarus Muhumed and Khadar Hassan, Hereby declare that this submission is my own work and that, to best of
my knowledge and belief, it contains no material previously published or written by another student person or
material which has been accepted for the award of any other degree or diploma of the university or institute of
higher learning, except where due to acknowledge has been made in the context and reference list.
Student Name: Khadar Hassan and Aidarus Muhumed Signature _______________ Date
_______________
This is to certify that this thesis is to bona-fide work of Khadar Hassan and Aidarus Muhumed carried out under my
supervision.
Name of the Advisor: Mohamed isak signature ___________Date____________
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Dedication
This work is exclusively dedicated to our parents, Mr. Muhumed sh. Husein Mussa, Mr hassan a/
Rahman, miss Amina Dable kaahin and Halimo Mahdi ismail for their unconditional support
encouragement, patience and understanding during the entire period of the study.
ii
Acknowledgement
Great and special gratitude to Allah for giving me the opportunity, ability, courage, patience
and strength to undertake the study. Without Allah, I could not be able to successfully complete
this work. Special thanks to our family members; our father “muhumed Sh. Hussein, and Hassan A/ Rahman
and our mother Amina dable Kahin and Halimo Mahdi Ismail and our special sisters Muna Muhumed and
Hoodo Hassan for their generous support, I can’t forget my sister for her unstinted sustenance support and
encouragement to study and Gratitude to for university of Hargeisa, the valuable Institutional
support. I am particularly grateful to my supervisor MR Mohamed Izaak for remarkable good
will and tirelessly responding to my work, for her intellectual support, consistent reminders to
develop this thesis. Thank you very much for the time you have admiringly assisted and
scarified your precious time to me and I won’t forget how well you guided me during my
written of this thesis.
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Abstract
Internal control is the most important roots that facilitate the organizations or institutions to do the daily
activities by achieving the basic objectives and goals. The objective of the study was analyzing how internal
control system facilitates on procurement procedure. The main objective of this study has been related with
the internal control and procurement procedure system on Sagal jet. Specifically, the study was conducted
to assess the effect of internal control components on procurement procedure on value for financial control
in Sagal jet company, to find out the relationship between internal control and procurement system in Sagal
jet office and to examine challenges facing internal controls and ways they can be mitigated.
The study employed cross-sectional survey research design. Pertinent data was gathered using both
quantitative and qualitative approaches through questionnaires and key informant interviews. Questionnaires
were distributed to a sample of randomly selected staff members from the Sagal jet office e. Key informant
interviews were also conducted, by selecting key persons; from the office itself. The quantitative data was
analyzed through descriptive and inferential statistics by using SPSS results, and presented in tabular form,
whereas the qualitative data was edited and coded. The analysis and the interpretation were conducted by
giving summary, conclusion and recommendation to the last findings.
Based on its findings, this research recommends that the Sagal jet company should to develop adequate
policies, procedures and manuals, written code of conduct, training programs, commitment and continuous
supervision by management, staff rotations and external oversight.
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Contents
Declaration ...................................................................................................................................................................i
Dedication ...................................................................................................................................................................ii
Acknowledgement ..................................................................................................................................................... iii
Abstract ...................................................................................................................................................................... iv
CHAPTER ONE ............................................................................................................................................................ 1
Introduction ............................................................................................................................................................... 1
1.1 Background of the Study ...................................................................................................................................... 1
1.2 Problem of the statement .................................................................................................................................... 2
1.3 Purpose of the study ............................................................................................................................................ 3
1.4 Objectives of the study ........................................................................................................................................ 3
1.4.1 General objective .............................................................................................................................................. 3
1.4.2 Specific objectives ............................................................................................................................................. 4
1.4 Research questions .............................................................................................................................................. 4
1.5 Hypothesis............................................................................................................................................................ 4
1.6 Significances of the study .............................................................................................................................. 4
1.7 Scope of the Study ......................................................................................................................................... 5
1.7.1 Geographical scope ........................................................................................................................................... 5
1.7.2 Content scope ................................................................................................................................................... 5
1.7.3 Time scope ................................................................................................................................................. 5
1.8 Description of the Study Area .............................................................................................................................. 5
CHAPTER TWO ........................................................................................................................................................... 7
REVIEW OF RELATED LITERATURE ............................................................................................................................. 7
2.0 INTRODUCTION .................................................................................................................................................... 7
2.1 Concepts, ideas, opinions from Authors/ experts ............................................................................................... 7
2.1.3 Components of internal control system ........................................................................................................... 8
2.1.3.1 Control Environment...................................................................................................................................... 8
2.1.3.2 Risk assessment ............................................................................................................................................. 8
2.1.3.3 Control activities ............................................................................................................................................ 9
2.1.3.4 Information and communication ................................................................................................................... 9
2.1.3.4 Monitoring ................................................................................................................................................... 10
2.2 theoretical perspectives..................................................................................................................................... 10
2.2.1 Roles and responsibilities of internal control activities .................................................................................. 10
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2.2.2 Internal control evaluation ............................................................................................................................. 11
2.2.3 Effectiveness of internal control ..................................................................................................................... 11
2.2.4 Value for financial control............................................................................................................................... 11
2.3 Related studies................................................................................................................................................... 12
Chapter three ........................................................................................................................................................... 14
3.1 Research design ................................................................................................................................................. 14
3.2 target population ............................................................................................................................................... 14
3.3 sample size ......................................................................................................................................................... 14
3.4 sampling procedures ...................................................................................................................................... 14
3.5 Research instrument ...................................................................................................................................... 15
3.6 validity and Reliability of the instrument....................................................................................................... 15
3.6.1 Testing validity ............................................................................................................................................ 15
3.7 Data gathering procedure .................................................................................................................................. 16
3.8 Source of Data .................................................................................................................................................... 16
3.8.1 Primary data.................................................................................................................................................... 16
3.8.2 Secondary data ............................................................................................................................................... 16
3.9 data analysis and presentation tools ................................................................................................................. 16
3.10 ethical consideration........................................................................................................................................ 17
3.11 limitations of the study .................................................................................................................................... 17
Chapter..................................................................................................................................................................... 19
Presentation, analysis and interpretation of data ................................................................................................... 19
Introduction ............................................................................................................................................................. 19
4.2.1 Background of respondents ........................................................................................................................... 19
4.2.2 What is your age? ........................................................................................................................................... 19
4.2.3 What is your educational level? ...................................................................................................................... 20
4.2.4 Area of specialization ...................................................................................................................................... 21
4.2.5 What is your experience? ............................................................................................................................... 22
4.2.6 Marital status .................................................................................................................................................. 23
4.3 Components of internal control system ............................................................................................................ 23
4.3. 1: All staff has available up to date organization policy and procedures ......................................................... 23
4.3.2 Senior management monitors and reviews each section’s actual performance against objectives.............. 24
4.3.3 Performance reviews are made of specific functions or activities ................................................................. 25
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4.3.4. The attainment of Value for Financial is based on the use of the office resources in order to achieve its set
objectives. ................................................................................................................................................................ 26
4.3.5. Internal control section carryout regular reviews to ascertain whether the office achieved value for
financial control for all its activities. ........................................................................................................................ 26
4.3.6. A formal organization-wide objectives are established................................................................................. 28
4.3.7. Employees at all levels are represented in establishing the objectives. ....................................................... 29
4.3.8. Planning for future needs is done well in advance of expected needs and considers various scenarios. .... 29
4.3. 9. A process exists to identify and consider the implications of external risk factors. ..................................... 30
4.4. Major challenges facing internal control systems ............................................................................................ 30
4.4.1. Internal control is to help employees have a precise way of doing their job and to help management easy
understanding of what is achieved in the budgeted work so far. ........................................................................... 30
4.4.2. A good internal control will further have a positive impact on the shareholders' confidence on the financial
reporting of the company. ....................................................................................................................................... 32
4.4.3. The management needs to educate the employees about the importance of this control and to make it an
offense to jump or avoid these controls.................................................................................................................. 32
4.5. Relationship b/w internal control and procurement procedure. ..................................................................... 34
4.5.1 Relationship b/w internal control and procurement procedure. ................................................................... 34
4.5.2. Does the internal control system have written procedures regarding the beginning, review and approval of
all purchases?........................................................................................................................................................... 34
4.5.3. Which procurement procedure policy does your company use? .................................................................. 35
Challenges Facing Internal Control and Ways they can be mitigated ..................................................................... 36
Internal control system (the control environment, control activities, risk assessment, information and
communication, and monitoring) section. .............................................................................................................. 36
Effective internal control system on procurement procedure and overcome the challenges in the organizations.
................................................................................................................................................................................. 37
Chapter five .................................................................................................................................................................. 38
Finding, Conclusion, Recommendation ....................................................................................................................... 38
5.1 Introduction ........................................................................................................................................................... 38
5.2 ................................................................................................................................................................................ 38
5.3 Recommendation................................................................................................................................................... 40
Appendix ...................................................................................................................................................................... 41
References ................................................................................................................................................................... 41
Appendix B ................................................................................................................................................................... 42
Questionnaire .............................................................................................................................................................. 42
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CHAPTER ONE
Introduction
1.1 Background of the Study

Internal control is argued to be a complex process with regard to both the public and private
sectors, realized by the management and employees of an organization, and established for
the definition of risks and for obtaining reasonable certainty (Mugo, 2011)
The purpose of the internal control is said to be the fact that it supports an organization in
complying with the relevant laws and regulations; meeting its accounting or reporting
obligations; and the achievement of its strategic goals, which include the protection of the
resources of the entity from losses, improper use and damages.
However, according to the Organization for Economic Co-operation and Development (OECD,
2011), the public sector needs to uphold integrity, transparency and accountability. It is,
moreover, asserted that calls for government transparency and accountability have been on
the rise due to the financial and economic crisis.
Internal control system is one of the vital processes for assuring achievement of an
organization's objectives in operational effectiveness and efficiency, reliable financial
reporting, and compliance with laws, regulations and policies therefore At the organizational
level, Internal control objectives relate to the reliability of financial reporting, timely feedback
on the achievement of operational or strategic goals, and compliance with laws and
regulations (Anderson, 2008).
At the specific transaction level, internal control refers to the actions taken to achieve a
specific objective (e.g., how to ensure the organization's payments to third parties are for
valid services rendered) internal control procedures.
According to developing countries, the Internal Control System is all the methods and
procedures followed by the management in order to ensure, to a great extent, as much
successful cooperation as possible with the director of the company, the insurance of the
capital, the prevention and the detection of fraud, as well as the early preparation of all the
useful financial information (Meigs, 1984; Papadatou, 2005).
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According to Baily et al. (2005), a procurement fundamental rule states that it is paramount
to think in terms of ownership. This is noted to include not only the purchasing price, but also
time and resources that are to be expended in pursuit of ownership. It is further asserted that
understanding the steps involved with procurement enables the determination of the real
cost involved with procuring any good or service.
In Somaliland many private organizations procurement activities are posited to be riddled
with neglect, lack of coordination and direction, lack of open competition and transparency,
corruption, and incompetent procurement staff. It is further alleged that inflexible and
bureaucratic procurement systems are largely to blame for unacceptable contract delays,
increased costs, potential for manipulation of contract awards and lack of fair competition.
However, in Sagal jet company, there is no strong clear internal control system compared to
other organizations in Somaliland. The study was based on Sagal jet as case study, is the first
digital printing company in Hargeisa Somaliland, the main branch is located central of
Hargeisa Somaliland. Sagal jet improves the advertising system in Somaliland and it made it
one of the known companies and the study mainly focus on the Sagal jet headquarters in
Hargeisa Somaliland and its operations.
1.2 Problem of the statement

Currently, apart from the problem of scarce resources and constrained budgets, private
organizations face a high risk of fraud, errors, misappropriation of funds and incorrect and
unreliable financial reports which leads to loss of integrity, implementation of accounting
policies inconsistent with applicable legislation and general fall in the operational
performance which ultimately forces the government to achieve less than its target objectives
Therefore, steps are required to minimize, if not eliminate completely, these risks, by
establishing effective internal control systems (Abubakar, 2014)
Internal Control System refers to an organized amalgamation of functions and procedures,

within a complete system of controls established by the management and whose purpose is
the successful function of the business (Hamed, 2008).
In addition to that, internal control has defined that a system of internal control extends
beyond those matters which relate directly to the functions of accounting and the financial
2
statements. In addition, he notes that internal control is a systematic procedure which will
lead to evaluate the degree of correlation between those established criteria and the real
results of the business (Whittington, 2004).
However, it is worth noting that most units and departments in private organizations have
not fully appreciated the role of internal controls as being one to ensure efficient utilization
of the resources of these institutions.
However, in Somaliland, Private organizations are guided by rules and control measures to
help them achieve their aims and objectives and also to curb corruption. There have been
several reported cases of embezzlement of fund and misuse of resources in the private
organizations. From the foregoing the researcher decided to find out whether or not the role
of internal controls put in place by the private procurement act.
In light of these happening, in Sagal jet company there is no Internal control system use in the
company and still there is a lot of complain about the insufficiency procurement procedure,
the researcher would answer how Internal control system effects procurement procedure.
Therefore, the purpose of this research is to investigate the relationship between internal
control and procurement procedure case study Sagal jet Hargeisa Somaliland.
1.3 Purpose of the study
The purpose of the study is to investigate the effect of internal control system on
procurement procedure in sagal jet company, this study therefore aimed at unravelling these
platforms and clarifies how these currently related.
1.4 Objectives of the study
1.4.1 General objective

The general objective of the study is to examine the role of internal control system on
procurement procedure in Sagal jet company.
3
1.4.2 Specific objectives
 To assess the effect of internal control components on procurement procedure on
value for financial control in Sagal jet company
 To examine the major challenges facing internal control systems in Sagal jet office and
ways they can be mitigated
 To determine the relationship between internal control and procurement system in

Sagal jet office
1.4 Research questions

 What is the effect of internal control components on procurement procedure on value
for financial control in Sagal jet company?
 What are the major challenges facing internal control systems in Sagal jet office and
ways they can be mitigated?
 What is the relationship between internal control and procurement on Sagal jet
office?
1.5 Hypothesis
There is significance relationship between internal control and procurement system
1.6 Significances of the study

The end of this study the information provided helps in contributing knowledge in the
department of procurement control in Sagal jet. It will have help the public especially the
business managers to appreciate the need for emphasizing proper internal control over purchase
to achieve targeted of business success Future researchers that may be interested in the same
or related topic are likely to benefit from the findings by borrowing a leaf in form of related
literature. This is so because the study was added on the existing body of knowledge as far as
internal control of business in businesses is concerned.
It helps to build on the researchers’ knowledge and understanding of the study variables. It also
help the researchers to gain more skills of conducting research and this was important to the
researchers while in office or pursuing further studies. It also helps the study to appreciate the
4
concept of internal control over purchase lastly, the study findings will help to identify and
highlight the weaknesses in internal control system on procurement procedure of Sagal jet
company and how influences business success
1.7 Scope of the Study

1.7.1 Geographical scope
This study area of research is confined to Hargeisa, the capital city of Somaliland. Hargeisa
city consists of five main districts which have been included in the sample of this study.
Therefore, this study investigates and confined to identify the role of internal control system
on procurement procedure, (case study sagal jet).
1.7.2 Content scope
This study was focus on the role of internal control system on procurement procedure, Hargeisa
Somaliland.
Internal control is independent variable and procurement procedure is dependent variable.
1.7.3 Time scope
The duration of the study was three months starting from May to July in 2019.
1.8 Description of the Study Area
Hargeisa – Somali Commentator – SAGAL JET Company, Somaliland’s largest full-service

provider of print and related services, was founded in 2007. The company covers a wide
variety of private and public sectors having thousands of customers. Headquartered in
Hargeisa, the company employs more than 100 employees. Although Sagal Jet has printing
operations outside Somaliland borders, it generates most of its revenue in Somaliland
territory. The company provides both personalized and publicized printed items (Abdinasir,
2008-2016)
Products and services of Sagal Jet Company include: (Printing t-shirts, flags, 3D signboards,
business cards, brochures, leaflets, mugs, stamps, invitation cards, ID cards, bill boards,
5
banners, posters, banner stands, books and other items. The company serves local, regional
and nation companies encompassing diverse industries (Abdisalan Hereri, 2015).
6
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.0 INTRODUCTION
Internal control is a widely-used integrated framework which is a process that is affected by an
entity board of directors, management and other personal, designed to provide reasonable
assurance regarding the achievement of objectives in the three categories (a) Effectiveness and
efficiency of operations (b) accuracy and reliability of financial laws reporting and complince
with prescribed policies, procedures, laws and regulations (COSO, 1994).
Internal Control objectives are desired goals or conditions for a specific event cycle which, if
achieved, minimize the potential that waste, loss, unauthorized use or misappropriation will
occur. They are conditions which we want the system of internal control to satisfy. For a control
objective to be effective, compliance with it must be measurable and observable. The control
objectives include authorization, completeness, accuracy, validity, physical safeguards and
security, error handling and segregation of duties (Williams, 2000).
2.1 Concepts, ideas, opinions from Authors/ experts

Internal control system is one of the vital processes for assuring achievement of an
organization's objectives in operational effectiveness and efficiency, reliable financial
reporting, and compliance with laws, regulations and policies therefore At the organizational
level, Internal control objectives relate to the reliability of financial reporting, timely feedback
on the achievement of operational or strategic goals, and compliance with laws and regulations
(Anderson, Nov,17,2008).
Procurement fundamental rule states that it is paramount to think in terms of ownership, this is
noted to include not only purchasing price, but also time and resources that are to be expended
in pursuit of ownership (Bialy, 2005)
2.1.1 Types of internal control

Different writers have come with different types of internal control systems. (Millichamp,
2002) puts the types of internal controls as; Safeguarding assets, Separation of duties,
supervision, vertification, approval and organization, documentation, safeguarding assets, and
eporting. However, many other uthors such as (Hevesi, 2002), the state university of New York
and (DiNapoli, 2007) have agreed that the most important types of internal controls are
7
detective controls, corrective controls, and preventive controls. These types are explained
below
➢ Detective – designed to detect errors that have already occurred. It includes double checking
of.
➢ Corrective – designed to correct errors or irregularities that have been detected. It includes
segregation of duties (deterrent factor) and establishment of suitable procedures for
authorization of transaction.
➢ Preventive – designed to keep errors or irregularities from occurring. It includes hiring

qualified personnel and inventory control system to predict out-of-stock items.
2.1.3 Components of internal control system

As defined in the Committee of Sponsoring Organizations of Treadway Commission (COSO)
report of 1994, Internal Control consists of five interrelated components, namely monitoring,
information and communication, control activities, risk assessment, and control environment.
Each of the elements was discussed follows.
2.1.3.1 Control Environment

The control environment is the foundation for all other components of internal control,
providing discipline and structure. Leaders of each department, area or activity establish a local
control environment. The elements of the control environment also encompass the
organizational structures which specify responsibility in the performance of financial and non-
financial duties, management operating style, attitude, ethical values, the integrity, skill and
actions regarding control (Heves, 2005). Considered the control environment to be the attitude
toward internal control and control consciousness established and maintained by the
management and employee of an organization (IFAC, 2012). Concurs that higher level
administrators of an organization are responsible for establishing the appropriate control
environment.
2.1.3.2 Risk assessment
Risk assessment is the process of identifying and analyzing relevant risks to the achievement
of the entity’s objectives and determining the appropriate response (DiNapoli, 2007). It
involves risk identification; risk evaluation; assessment of the risk appetite of the organization;
8
and development of responses. Risk assessment should be performed and should identify;
controllable risks and uncontrollable risks (INTOSAI, 2004).
Risk management should always be systematic and also embedded in company procedures.
And there should be a culture of risk awareness in the organization. As governmental,
economic, industry, regulatory and operating conditions are in constant change, risk assessment
should be an ongoing iterative process. Managing change requires a constant assessment of
risk and the impact on internal controls. Economic, industry and regulatory environments
change and entities' activities evolve. Mechanisms are needed to identify and react and
changing conditions (IFAC, 2012).
2.1.3.3 Control activities
According to Gendron, Cooper and Townley (2001) Control activities are the policies and
procedures that assist in ensuring that management directives are successfully implemented.
They provide the means to address the various risks that may hinder the achievement of the
organization’s objectives, and they are established in response to perceived risks. Control
activities are the policies and procedures that help ensure management directives are carried
out They help ensure that necessary actions are taken to address risks to achievement of the
entity's objectives. Control activities occur throughout the organization, at all levels, and in all
functions. They include range of activities as diverse as approvals, authorizations, verifications,
reconciliations, reviews of operation performance, security of assets, and segration of duties
(Millichamp, 2002).
According to Guy (1999) Control activities usually involve two elements: a policy establishing
what should be done and procedures to affect the policy. All policies must be implemented
thoughtfully, consciously and consistently.
2.1.3.4 Information and communication
Pertinent information must be identified, captured and communicated in a form and time frame
that enable people to carry out their responsibilities. Effective communication must occur in a
broad sense, flowing down, across and up the organization. They must understand their own
role, as well as how individual activities relate to the work of others. They must have a means
of communicating significant information upstream. For the control system to be effective and
efficient there should be relevant and reliable information which should be recorded and
9
communicated to management and other personnel within the organization (Millichamp,
2002).
ACCA (2005) considers information flow as a process through which the right organizational
members receive the right information at the right time. Here, formal and informal channels
information flows are noted. Formal channels comprises of downward or top down, upward or
bottom up and horizontal or internal forms. The informal channels comprises majority
grapevine. It is further noted that for information to achieve its intended purpose, it must be
identified, captured, processed and communicated in an authentic, useful, and timely manner.
In addition, the information communicated must be reliable, accurate, complete spesific,
understandable, directed to the right people and relevant to the intended users (ACCA, 2005)
2.1.3.4 Monitoring
Internal control systems need to be monitored and assessment of the quality of the system's
performance over time. Ongoing monitoring occurs in the ordinary course of operations, and
includes regular management and supervisory activities, and other actions personnel take in
performing their duties that asses the quality of system performance (simmons M.R, 1995).
Managers should promptly evaluate findings from audits and other reviews, including those
showing deficiencies and recommendations reported by auditors and others who evaluate
agencies‟ operations, to determine proper actions in response to findings and recommendations
from audits and reviews (Heald 2003).
According to Coffin (2003) monitoring entails the activities and procedures designed to assess
the effectiveness of the internal control system in achieving the entity’s financial reporting
objectives. Monitoring activities may be ongoing or may be separate evaluations and it is
important given the complex and dynamic environments faced by most organizations (Henle,
2005). It seeks to ensure that systems are performing as intended. However, this is
accomplished.
2.2 theoretical perspectives
2.2.1 Roles and responsibilities of internal control activities
According to the COSO framework (1994), everyone in the organization has responsibility for
internal control system or take other actions needed to affect control.
10
2.2.2 Internal control evaluation
DiNapoli (2007) stated that the purposes of evaluation are to provide management with a
reasonable assurance that; the organization’s systems of internal control are functioning
effectively; and they can identify both risks to the organization and opportunities for
improvement. The five components of internal control are considered to be the criteria for
evaluating a financial reporting control and the bases for the auditors’ assessment a control
risks in term of; Understanding a client’s financial reporting controls and documenting that
understanding, preliminarily assessing the control risk, and testing the controls, reassessing
control risk, and using that assessment to plan the remainder of the audit work (IFAC, 2012).
2.2.3 Effectiveness of internal control
A judgment as to whether an entity’s internal control is effective is based on considering the

extent to which the components are present and operating effectively. Effective functioning of
all the components provides reasonable assurance as to achievement of one or more of the three
categories of objectives (COSO, 2004).
Internal control may be judged effective for each of the three aforementioned categories of
internal control objectives if the management have reasonable assurance that; they understand
the extent to which they entity’s operations objectives are being achieved; Published financial
statements are being prepared reliably, Applicable laws and regulations are being complied
with. Effectiveness of internal control depends on the presence of all the components of internal
control working together. No two entities are likely to have the same internal control (IFAC,
2012).
Internal control system operate at different levels of effectiveness and in determining whether
a particular internal control system is effective a judgment will result from an assessment of
whether the five components Control Environment, Risk assessment, Control activities,
Information and communication and Monitoring are present and functioning (Douglas, 2011).
2.2.4 Value for financial control
Financial control may be construed as the analysis of a company's actual results, approached
from different perspectives at different times, compared to its short, medium and long-term
objectives the business plans. These analyses require control and adjustment processes to
ensure that business plans are being followed and that they can be amended in the event of
11
anomalies, irregularities or unforeseen changes (Muresan, 2009). The success for a private
organization is the degree to which it fulfils its set objectives and mission in terms of being
planning, implementing, controlling and adjusting. The Internal Control Systems are keys in
achieving the organizational set mission and objectives; hence financial control. Value for
financial control can be achieved by eradicating waste in benefits services processes and
systems. Value for financial control is not paying more for a good or service than its quality or
availability justifies as well private spending implies a concern with economy (cost
minimization), efficiency (output maximization) and effectiveness (full attainment of the
intended results) (Kaplan, 1992).
2.3 Related studies
A study carried out in Nigeria by Owizy (2008) Assessment of Effectiveness of Internal control
in international organizations: A Case study of Benue State Ministry of Finance. The study
tackled the importance of evaluating the effectiveness of internal control system in government
ministries. With particular reference to Benue State ministry of finance, the study sought to
find out the impact of internal control system on the performance of Benue State ministry of
finance. The study found out that Benue state ministry of finance do prepare annual budget
promptly and also have adequate expenditure tracking to prevent financial recklessness despite
the internal challenges experienced like; poor communication. Another study conducted by
Simiyu (2011) on effectiveness of internal control system in government institutions in Kenya,
clearly indicated that they face quiet a number of challenges during internal controls in
performance like; financial reports are not made timely, frauds and misuse of institutional
resources. Also a study by Mecha (2010) on the relationship between Internal Control and
Performance of government Ministries in Kenya observed that effective internal control
practices like communication, and timely reporting contributed to improved performance of
government ministries. Similarly, Vijayakumar and Nagaraja (2012) show concerned that
governing bodies of public sector entities need to ensure effective system of internal control
because is one of the several factors that influence the performance of an organization and it
plays a vital role in achieving management intended objectives that would lead the successful
operations Mecha 2010)
A study by Ochoge in Uganda (2011) on internal controls and organizational performance: a

case of Medipont industries limited sought to establish a relationship between internal control
and organizational of performance of Medipoint Industries Limited. It was concluded; the study
12
findings indicated that the internal controls and organizational performance was established to
exist (Weili and Sarah, 2005), conducted a qualitative research on the topic of disclosure of
material weakness in internal control after the Sarbanes-Oxley Act (SOX) of 2002. Their paper
focuses on sample of 261 companies that disclosed at least one material weakness in internal
control in their Security and Exchange Commission filings after the effective date of the SOX.
They find that poor internal control is usually related to an insufficient commitment of
resources for accounting controls. Material weakens in internal control tend to be related to
deficient revenue recognition policies lack of segregation duties deficiencies in the period-end
reporting process and accounting policies and inappropriate account reconciliation (Weili and
Sarah, 2005).
13
Chapter three
3.1 Research design
This study was adopt quantitative approach and was employ descriptive survey design since it
involves a large sample and descriptive comparative design that was describe the level of
difference between community participation and sustainability of projects. Also, this study
employ descriptive correlation design to portray the level of relationship between community
participation and sustainability of projects. Finally expost-factor will be used in this study as
long as the researcher has no control of the variables and only will use the facts that will find
from the field.
3.2 target population
The target population were includes all the cases about which the researcher would like to make
generalizations. (Polit, D.F. &HunglerB.P., 2004).
The target population of this study was be Sagal jet, Hargeisa, Somaliland.
3.3 sample size
This refers to the number of items to be selected from the population to constitute a sample.
This major problem before a researcher. The size of the sample should neither be excessively
large, nor too small. It should be optimum. Using the rule of thumb, since the total target
population was less than 1000, 30% of the target population was selected as a sample; 0.3*100
=30. The sample size is 30 respondents of top management and other staff members of the
company.
Table 1: sample frame
Department Total target population Sample size

Top managers 10 3
Staff members 90 27
Total 100 30
Top managers: 10/100*30= 3
Staff members: 40/100*30= 27
As shown above, the 30 respondents were selected by using simple random sample from the
2 different departments of Sagal jet company in Hargeisa Somaliland.
3.4 sampling procedures
14
The target population of 116 which included the project managers and community members,
Being the respondents are large a sample of 56 were drawn out. So, this study was used Stratified
random sampling as the social development projects are stratified in the M.mooge districts in
Hargeisa region. Then proportionate systematic random sampling and purposive non-random
sampling will used for the community members.
3.5 Research instrument
The researcher is assuring that the information obtain was served purely academic purpose.
The researcher distributed the questionnaire and interview from the selected respondents in
Sagaljet Company in Hargeisa Somaliland to get more information about questionnaire and
interview.
3.6 validity and Reliability of the instrument
3.6.1 Testing validity
According to Amin (2005), for the instrument to be accepted as valid, the average index should
be 0.7 or above, which confirms ours to be valid because it is 0.8 which is above that number.
According to Polit and Hungler (1993), the validity of an instrument is the degree to which an
instrument measures what is it intended to the measure. The validity of the instrument will be
assured through expert judgment and the researcher was making sure that the coefficient of
validity to be at least 78%. The researcher will consult his supervisor for expert knowledge on
questionnaire construction and other lecturers of Hargeisa University. After assessment of the
questionnaire, the necessary adjustments will be made bearing in mind the objectives of the
study. The formula that will be used to calculate the validity of the instrument is Content
Validity Index (CVI) = no of items declared valid/total no of items.
Polit and Hungler (1993), refer to reliability as the degree of consistency with which an
instrument measures the attribute it is designed to measure reliability estimates the consistency
of the measurement, the reliability test involves a “test and retest” exercise. This means the
instrument was subjected to representative sample to establish the reliability of the
questionnaire, will again give to the same six respondents for pre-testing purposes, which they
will fill and collected by the researcher. One week, after, the same questionnaire will again
give to the same six respondents; and the responses will be basically same. This will help to
reveal by the researcher that the questionnaire instrument will be reliable.
15
3.7 Data gathering procedure
Data was collected well-structured questionnaire and interview which involve face-to-face
interactions with the respondents where the interviewer asked questions that respondents
answered
. The responsibility of data collection is on the researchers. Obtaining data from participants
with different experience prevents information bias and thus increasing credibility regarding
the information. The first part of the questionnaire was designed to know the characteristics of
the respondents, and the last and middle part of the questionnaire designed to know the relation
of the variables and keep their coherence. The most questions of the questionnaire was close
ended questions to keep the validity and reliability of the questionnaire.
The main objective of interview is to help and add some information to the function of
questionnaire because there may be unquantifiable factors.
3.8 Source of Data
In this research were used both primary and secondary data.
3.8.1 Primary data
The primary data was used as the major source of data in this study to describe the role of
internal control systems on procumbent procedures in Sagal jet Office in Somaliland. Data
from primary sources will be collected through a questionnaire that were distributed to selected
employees of the company. In addition to the questionnaire, in-depth interviews were
conducted from key persons; from the employees of Sagal jet Offices, in order to triangulate
the survey result.
3.8.2 Secondary data
To get sufficient and absolute data concerning the role of internal control system on
procurement procedure in Sagal jet Company in Hargeisa Somaliland. The secondary data
sources of this study was gathered from different documents mainly on books, the internet,
different reports, manuals and guidelines of the office.
3.9 data analysis and presentation tools
The researcher was employ or use SPSS (statistical Package for Social Sciences) when
analysing data. The frequency and percentage distribution will be used to determine the
16
demographic characteristics of the respondents. The mean and standard deviations will be
applied to the levels of resource availability, utilization of effective tax collection. An item
analysis will illustrate the strengths and weaknesses based on the indicator in terms of mean
and rank. Rom these strengths and weaknesses, the recommendations will be derived.
The analysis of Variance (ANOVA) will be utilized to test the difference between means for
one hypothesis at the 0.05 level of significance. A multiple correlation coefficient to test the
hypothesis on correlation (Ho #2) at the 0.05 level of significance. Using a T test will be
employed. The regression analysis R2 (coefficient of determination) will be computed to
determine the influence of the independent variables on the dependent variable.
3.10 ethical consideration
Participants were assured that the source of data collected would remain confidential and that
anonymity was maintained. Written permission to conduct the research study was obtain from
the College for Higher Degrees and research in University of Hargeisa. The study was carry
out with the permission of the respondents. It will keep as confidential and has been used for
not mentioning any names of the respondents. There is a need for the researcher to use,
professional and ethical standard to plan, collect and process data. The researcher ensured that
he/she used the objective methods in data collection. The methodology will choose for the
research had been selected on the basis of research objectives and for other reasons. The
researcher ensured that he/she recognized the boundaries of his/her competence in the selection
of methodology and the researcher also made sure that he/she used only those techniques for
which he/she would be qualified by his/her educational training and experience.
Finally, the researcher makes sure that he/she will collect data according to the acceptable
research standards, having ensured that he/she did not mislead those who read the research
report.
3.11 limitations of the study
This study was used of a non-clinical sample that shows cognitions and symptoms similar to
those suffering from OCD made it possible to examine more complex relationships between
constructs (such as moderation and structural relationships). However, the conclusions from
these studies are limited as there may be questions regarding the extent of generalizability to
clinical participants.
17
The last study aimed to replicate previous findings with clinical samples. However, the number
of participants in this study limited the ability to utilize sophisticated statistical methodologies
and thus examine the complex relationships between the constructs. Future research would
benefit from the use of a larger sample of clinical participants.
18
Chapter 4
Presentation, analysis and interpretation of data
Introduction
This chapter presents analysis, the study findings and interpretation of the findings as per the
study objectives. It then provides discussion of the findings. The results are shown in terms of
the descriptive analysis and regression analysis.
4.2.1 Background of respondents
Figure 1: gender
Gender of the respondents
36.7% Male
63.3% Female
From the above figure 63.3% of the respondents were males, while the rest 36.7% were females.
Therefore, from the above information, though the ratio of the respondents is not proportional but
both category of gender were participated in the survey. This shows that there is bias in the survey
instrument in relation to the gender of the respondents of this study.
4.2.2 What is your age?
19
Figure 2: age of respondents
Age of the respondents

90.0
80.0 76.7%
70.0
60.0
50.0
40.0
30.0 23.3%
20.0
10.0
0.0
20-29 30-39
Source: primary data 2019
From the above figure 76.7% of the respondents were the ages of 20-30 years old followed
by 23.3% who were the ages of 30-40 years’ old.
Therefore, from this information we can see that the majority of the respondents were 20-30
years old.
4.2.3 What is your educational level?
Figure 3educational level
What is your level of education
3.3%
23.3% Diploma
Bachelor degree
Master or above
73.3%,
Source: primary data, 2019
From the above figure 73.33% of the participants were degree holders followed by 23.33%
who were diploma holders and 3.33% who were holding master and above qualifications.
20
Therefore, from this information we can see that majority of the participants were degree
holders.
4.2.4 Area of specialization

figure 4: area of specialization
What is your area of specification?

33.3%
35.0
30.0%
30.0
23.3%
25.0
20.0
13.3%
15.0
10.0
5.0
0.0
Accounting Management Economics Public
. Source: primary data, 2019

From the above figure 33.33% of the participants were Accountants followed by 30% who
were Management departments, 23.33% who were Economics and the rest13.33% were
Public departments.
Therefore, from this information we can see that majority of the participants were
Accountants.
21
4.2.5 What is your experience?
Figure 5: your experience
.
WHAT IS YOUR EXPERIENCE IN YEARS
56.7%
36.7%
6.7%
Percent
Less than 1 year 6 - 10 years 11 - 15 year’s
Source: primary data, 2019

According to the above figure 57% of the respondents have served less than a year, followed
by 36% and 7% of the respondents who were served less than one year, 6-10 years and 11-15
years respectively. Therefore, from this information we can see that the most of the
respondents have served less than a year.
22
4.2.6 Marital status
Figure 6: marital status
What is your marital status

60.0 56.7%
50.0
40.0 36.7%
30.0
20.0
10.0 3.3% 3.3%

0.0
Single Married Divorced Widower
From the above figure 56.7% of the participants were Single followed by 36.7% who were married,
3.3% who were Divorced and the rest3.3% were Widower.
Therefore, this means that majority of respondents were Single so Sagal jet employees are mostly
were in their single status.
4.3 Components of internal control system

4.3. 1: All staff has available up to date organization policy and procedures
Table 2: available up to date org
Valid
Frequency Percent Percent Cumulative Percent
Valid Strongly 14 46.7 46.7 46.7

agree
11 36.7 36.7 83.3
Agree
Not sure 2 6.7 6.7 90.0
Disagree 3 10.0 10.0 100.0
Total 30 100.0 100.0
23
As can be seen from the above Table 46.7% of the respondents have strongly agreed that the all staff
has available up to date organization policy and procedures, while 36.7% of the respondents have
agree, 6.7% of the respondents have not sure and the rest 10% have disagree. Therefore, from this
information we can see that the all staff members available up to date organization policy and
procedures
4.3.2 Senior management monitors and reviews each section’s actual performance
against objectives
Table 3: senior management monitors and reveiws
Valid
agree
9 30.0 30.0 70.0
Agree
Not sure 4 13.3 13.3 83.3
Disagree 2 6.7 6.7 90.0
Strongly 3 10.0 10.0 100.0
disagree
Total
30 100.0 100.0
From the above Table bout 40% of the respondents strongly agreed, other 30% agreed and 13.3% not
sure, 6.7% disagreed, and the rest 10% of the respondents have strongly disagreed that senior
management monitors and reviews each section’s actual performance against objectives and previous
periods for all major activities respectively, and analyzes follows up as needed. This mean that senior
management is committed to make performance reviews and analyses are performed, and in turn
management does follow up on significant deviations in the operating results and trends
24
4.3.3 Performance reviews are made of specific functions or activities
Table 4: Performance reviews are made of specific functions or activities
Valid
agree
Agree 13 43.3 43.3 63.3
Not sure 9 30.0 30.0 93.3
Disagree 2 6.7 6.7 100.0
Total 30 100.0 100.0
From the above Table bout 43.3% of the respondents have agreed, other 30% not sure and 20%
strongly agreed, and the rest 6.7% of the respondents have disagreed respectively that performance
reviews are made of specific functions or activities, focusing on compliance, financial or operational
issues. Therefore, from this information we can see that performance reviews are made of specific
functions or activities.
4.3.4: Success of organization service is the degree to which it attains its set objectives
Table 5: Success of organization service is the degree to which it attains its set objectives
Valid

agree
Agree 9 30.0 30.0 70.0
Not sure 5 16.7 16.7 86.7
Disagree 4 13.3 13.3 100.0
Total 30 100.0 100.0
25
From the above Table bout 40% of the respondents have strongly agreed, other 30% agreed and 16.7%
not sure, and the rest 13.3% of the respondents have disagreed respectively that the success of the
organization service is the degree to which it attains its set objectives.
This seems that the office staff has a strong belief that the success of the organization depends on
achievement of value for financial and when set objectives are attained.
4.3.4. The attainment of Value for Financial is based on the use of the office resources
in order to achieve its set objectives.
Table 6: The attainment of Value for Financial is based on the use of the office resources in order to achieve its set
objectives.
Valid

agree
Agree 10 33.3 33.3 60.0
Not sure 6 20.0 20.0 80.0
Disagree 5 16.7 16.7 96.7

Strongly 1 3.3 3.3 100.0
disagree
Total 30 100.0 100.0
Source primary data 2019
From the above Table, about 33.3% of the respondents have agreed, while 26.7% have strongly
agreed, 20% not sure, 16.7% have disagreed and the rest 3.3% have strong disagreed respectively that
attainment of Value for financial is based on the use of the office resources in order to achieve its set
objectives. This means that top management should be committed to and considers the importance
of proper usage of resources in order to achieve objectives.
4.3.5. Internal control section carryout regular reviews to ascertain whether the office
achieved value for financial control for all its activities.
26
Table 7: Internal control section carryout regular reviews to ascertain whether the office achieved value for financial control
for all its activities.
Valid

agree
Agree 12 40.0 40.0 70.0
Not sure 7 23.3 23.3 93.3
Disagree 1 3.3 3.3 96.7
Strongly 1 3.3 3.3 100.0

disagree
Total 30 100.0 100.0
Source; primary data 2019
From the above Table, a significant portion shows that of the 40% respondents have agreed, while
30% have strongly agreed, other 23.3% not sure, and the rest 3.3% have disagreed and the 3.3%
strongly disagreed respectively that internal control section carryout regular review to ascertain
whether the office achieved value for money for all its activities.
Therefore, from this information we can see that internal control section carryout regular reviews to
ascertain whether the office achieved value for financial control for all its activities.
27
4.3.6. A formal organization-wide objectives are established.
Table 8: A formal organization-wide objectives are established.
Valid Percent
Frequency Percent Cumulative Percent

agree
Agree 11 36.7 36.7 56.7
Not sure 8 26.7 26.7 83.3
Disagree 3 10.0 10.0 93.3
Strongly 2 6.7 6.7 100.0

disagree
Total 30 100.0 100.0
Source: primary data
From the above Table, a significant portion shows that of the 36.7% respondents have agreed, while
26.7% have not sure, other 20% have strongly agreed, and the rest 10% have disagreed and the 3.3%
strongly disagreed respectively that a formal organization-wide objectives are established. Therefore,
from this information we see that the majority of the respondents agreed that a formal organization
wide objectives are established.
28
4.3.7. Employees at all levels are represented in establishing the objectives.
Table 9: Employees at all levels are represented in establishing the objectives
Valid

agree
Agree 11 36.7 36.7 60.0
Not sure 3 10.0 10.0 70.0
Disagree 5 16.7 16.7 86.7

Strongly 4 13.3 13.3 100.0
disagree
Total 30 100.0 100.0
23.3% have strongly agreed, other 16.7% have disagreed, and the rest 13.3% have strongly disagreed
and the 10% have not sure respectively that employees at all levels are represented in establishing
the objectives. Therefore, from this information we can see that an employees at all levels are
represented in establishing the objectives.
4.3.8. Planning for future needs is done well in advance of expected needs and
considers various scenarios.
Table 10: Planning for future needs is done well in advance of expected needs and considers various scenarios.
Valid

agree
Agree 15 50.0 50.0 70.0
Not sure 9 30.0 30.0 100.0

Total 30 100.0 100.0
29
As we can see the above Table shows that of the 50% of the respondents have agreed, where 30%
have not sure and the rest 20% have strongly agreed respectively that planning for future needs is
done well in advance of expected needs and considers various scenarios. This means that proper
planning process is good and there are a good expectations in the future plans.
4.3. 9. A process exists to identify and consider the implications of external risk factors.
Table 11: A process exists to identify and consider the implications of external risk factors.
Valid

agree
Agree 13 43.3 43.3 76.7
Not sure 2 6.7 6.7 83.3
Disagree 3 10.0 10.0 93.3
Strongly 2 6.7 6.7 100.0

disagree
Total 30 100.0 100.0
From the above Table shows that of the 43.3% of the respondents have agreed, where 33.3%% have
strong agreed, 10% have disagreed and the rest 6.7% have not sure and 6.7% strongly disagreed
respectively that a process exists to identify and consider the implications of external risk factors.
Therefore, from this information we can see that the most of the respondents are accepted that there
is a process exists to identify and consider the implications of external risk factors.
4.4. Major challenges facing internal control systems
4.4.1. Internal control is to help employees have a precise way of doing their job and
to help management easy understanding of what is achieved in the budgeted work so
far.
30
Table 12: Internal control is to help employees have a precise way of doing their job and to help management easy
understanding of what is achieved in the budgeted work so far.
Valid Percent
Frequency Percent Cumulative Percent

agree
Agree 14 46.7 46.7 80.0
Not sure 5 16.7 16.7 96.7
Disagree 1 3.3 3.3 100.0
Total 30 100.0 100.0
33.3% have strongly agreed, other 16.7% have not sure, and the rest 3.3% have disagreed and the
respectively that Internal control is to help employees have a precise way of doing their job and to
help management easy understanding of what is achieved in the budgeted work so far. Therefore,
from this information we can see that there is strong internal control is to help employees have a
precise way of doing their job and to help management easy understanding of what is achieved in the
budgeted work so far
31
4.4.2. A good internal control will further have a positive impact on the shareholders'
confidence on the financial reporting of the company.
Table 13: A good internal control will further have a positive impact on the shareholders' confidence on the financial
reporting of the company
Frequency Percent Valid Percent Cumulative Percent

agree
Agree 13 43.3 43.3 90.0
Not sure 2 6.7 6.7 96.7
Strongly 1 3.3 3.3 100.0

disagree
Total 30 100.0 100.0
Source: Survey Data, 2018 From the

above Table, a significant portion shows that of the 46.7% respondents have strongly agreed, while
43.3% have agreed, other 6.7% have not sure, and the rest 3.3% have strongly disagreed and the
respectively that a good internal control will further have a positive impact on the shareholders'
confidence on the financial reporting of the company.
Therefore, from this information we can see that there is a good internal control will further have a
positive impact on the shareholders confidence on the financial reporting of the company.
4.4.3. The management needs to educate the employees about the importance of this
control and to make it an offense to jump or avoid these controls.
The following table shows that the management needs to educate the employees about the
importance of this control and to make it an offense to jump or avoid these controls and how the
respondents are responded.
32
Table 14: Education of employees about importance of internal control
Valid

agree
Agree 11 36.7 36.7 83.3
Not sure 3 10.0 10.0 93.3
Disagree 1 3.3 3.3 96.7

Strongly 1 3.3 3.3 100.0
disagree
Total 30 100.0 100.0
Source: Survey Data, 2019
From the above Table, a significant portion shows that of the 46.7% respondents have strongly
agreed, while 36.7% have agreed, other 10% have not sure, and the rest 3.3% have disagreed
and 3.3% have strongly agreed respectively that the management needs to educate the
employees about the importance of this control and to make it an offense to jump or avoid these
controls.
Therefore, from this information we can see that the management needs to educate the
employees about the importance of this control and to make it an offense to jump or avoid these
controls.
33
4.5. Relationship b/w internal control and procurement procedure.
4.5.1 Relationship b/w internal control and procurement procedure.
The following figure shows the relationship between internal control mechanism and
figure 7: relationship b/w intrrnal controland procurement
4.20 . Does the internal control mechanism in place to make sure that
Communicated procurement system corrections are implemented and
Effective to attain its objectives
23. %
23.3 % Yes
76. %
No
Source: primary data 2 019

procurement system corrections are implemented and effective to attain its objectives.
From the above figure 76.7% of the participants were said yes that their internal control
mechanism in place to make sure that communicated procurement system corrections are
implemented and effective to attain its objectives and the rest 23.3% of the respondents said
no it can’t be replaced this mechanism.
Therefore, from this we can see that the internal control mechanism in place to make sure
that communicated procurement system corrections are implemented and effective to attain
its objectives.
4.5.2. Does the internal control system have written procedures regarding the
beginning, review and approval of all purchases?
34
The following table shows that the internal control system have written procedures regarding
the beginning review and approval of all purchase and how the respondents are responded in
this system.
Frequency Percent Valid Percent Cumulative Percent
Valid Yes 17 56.7 56.7 56.7
No 5 16.7 16.7 73.3
Not 8 26.7 26.7 100.0

sure
Total 30 100.0 100.0
Source: Survey Data, 2019
From the above Table shows The above Table shows that 56.7% respondents were responded
that their company uses written procedure of internal control system regarding the beginning,
review and approval of all purchases while the remaining per cent 16.7% indicated that their
companies doesn’t this procedure and the other percent indicates that they not sure if they use
or not. Therefore, from this information we can see that the internal control system have written
procedures regarding the beginning, review and approval of all purchases.
4.5.3. Which procurement procedure policy does your company use?

The following table shows the procurement procedure policy and how the respondents are
responded.
Valid
Valid Documentation 12 40.0 40.0 40.0
Disclosure 6 20.0 20.0 60.0
Notification 3 10.0 10.0 70.0
Other 9 30.0 30.0 100.0
Total 30 100.0 100.0
35
From the above Table shows that 40% respondents said our company uses documentation
policy, while 30% said other procedure, and 20% also said our company uses disclosure
procedure and the rest remaining 10% of the respondents said that they used notification
procedure policy. Therefore, from this information we can see that the majority of the
respondents said our company uses documentation policy.
In addition, apart from the findings three different key informant interviews that were
conducted on the role of internal control system on procurement procedure in Sagal jet office
were objected to identify the areas deficiencies of internal control system in the office. The
discussion from the interviews is presented below.
Challenges Facing Internal Control and Ways they can be mitigated
There is no absolute assurance that internal control will lead to organizations to fully achieve
their objectives. This implies that there are always inherent limitations in internal control;
because of the involvement of human beings in the design, operation and monitoring of
internal controls. However, it is always possible to improve internal control, and mitigate
challenges that are facing for its proper implementation. As a result, according to the survey
results the following are the major ways that challenges can be mitigated
 Developing adequate policies, procedures and manuals pertaining to internal control

should be developed, in order to weaken the complexities in implementation.
 Written code of conduct, so that all staff members and top management should be in
line with the same requirement when it comes to ethical discharge of responsibilities.
 Training programs to build the gap in the skill and capacity of staff members regarding
internal control systems.
Internal control system (the control environment, control activities, risk assessment,
information and communication, and monitoring) section.
The interviewee was first asked whether the internal control section assesses the internal
control systems. Accordingly he pointed out that the section doesn’t conduct any assessment
due to apathy from the top management and the fact that the office is facing other challenges
like budget constraint, skill gap and lack of procedures to follow.
36
When asked about the situation of the existed internal controls (the control environment,
control activities, risk assessment, information and communication, and monitoring), he
mentioned that they are inconsistent, poorly designed and weakly in operation. In addition
to that, when asked about whether internal controls met the required goal or not, he insisted
that they are far behind the standard and they cannot contribute in the achievement of
organizational objectives.
Effective internal control system on procurement procedure and overcome the

challenges in the organizations.
As a result, according to the survey results the following are major ones to improve the an
effective internal control system on procurement procedure and overcome the challenges in
the organizations;
 Written code of conduct,
 Training programs,
 Commitment and continuous supervision by management,
 Staff rotations and external oversight and
 Promoting and creating good working environment
37
Chapter five
Finding, Conclusion, Recommendation
5.1 Introduction
This chapter is a continuation of chapter four on data analysis. The chapter presents the
summary of all the findings, discussion of the findings, conclusion and recommendations of
the study.
5.2 Conclusion
To state again, the broad objective of this study was assessing the role of internal control system
on procurement procedure in Sagal jet company in Hargeisa, Somaliland and this study
involved 30 members of Sagal jet company both staff and top managers respectively. This
broad objective is systematically broken down to specific research questions presented in the
previous chapters. To answer these research questions the survey method and the interviews
were used. The descriptive statistics and inferential statistics under the survey method were
presented in the previous chapter, and the interview results were also presented there. This
section discusses the major findings of the study.
Demographically, as the results obtained from the survey depicts, the majority of the
respondents of about 63.3% were males and the other hand according to the age, the majority
of the respondents of about 76.7% were in the most productive age brackets of their life (20-
30 years of age).
Regarding to the level of education, more than half of the respondents (73.3%) acquired
bachelor degree which means that they are adequately qualified persons academically.
Considering the area of specialization almost 33.33% of the respondents had an Accounting
specialty, which shows that staff members have adequate and related background to understand
the concept of internal control system. In terms of experience, about more than half of the staff
members (57%) were with an experience of less than 1 years, this shows that the majority were
with less experience.
On the other hand, based on the data analyzed in this study, the marital status of the respondents
about 56.7% were single.
 First objective: To assess the effect of internal control components on procurement

procedure on value for financial control in Sagal jet company.
38
Regarding the first objective, the study found that all staff members’ available up to date
organization policy and procedures, while senior management is committed to make
performance reviews and analysis are performed and in turn management does follow up on
significant deviations in the operating results and trends. In addition, the performance reviews
are made up of to specify functions or activities. Furthermore, it seemed that the office staff
had strong believe that the success of the organization depends on an achievement of value for
financial and when set objectives are attained and the importance of proper usage of these
resources in order to achieve objectives.
The study also exposed that the internal control section carryout regular reviews to ascertain
whether the office achieved value for financial for all its objectives and the formal
organizations wide objectives are established.
 Second objective: To determine the relationship between internal control and

procurement system in Sagal jet office.
With regard to the second objective, from the correlation results of the data used, this study
found that the proper planning process is good and there are good expectations in the future
plans and also the most respondents accepted that there is a proper process exists to identify
and consider the implications of external risk factors.
This also indicates that there is strong internal control system to help employees have a precise
way of doing their job and to help management easy understanding of what is achieved in the
budgeted work.
On the other hand, the managements needs to educate the employees about the importance of
this control and to make it offense to jump or avoid these controls. However, the internal control
mechanism is place to make sure that communicated procurement system corrections are
implemented and effective to attain its objectives.
 Third objective: To examine the major challenges facing internal control systems in
Sagal jet office and ways they can be mitigated
Finally, regarding the last objective, the study found from responses to the questionnaire and
the key informant interviews that there are inherent limitations or challenges including but not
limited to; competence issue, collusion, cost constraints and override by management and staff
members. All these can be mitigated through; developing adequate policies, training programs
commitment and supervision by management, and external oversight.
39
5.3 Recommendation
Based on the findings of the study, the following possible recommendations are forwarded to
improve the internal control system and procurement procedure in Sagal jet Company:-
 Management should motivate employee to enable them carrying out their duties
diligently and honestly without thinking of ways to steal the assets and resources of
the organization
 Top management of the office should make an environment that staff members which
are the major component of the organization, access information, understand the
policies, procedures and directives and the whole objectives that the organization is
endeavouring to achieve.
 The internal control system and procurement procedure should be evaluated against
clearly established criteria’s and should be reviewed and monitored continuously.
 To improve the internal control system and procurement procedure, the Sagal jet
company should to develop adequate policies, procedures and manuals, written code
of conduct, training programs, commitment and continuous supervision by
management, staff rotations and external oversight
 Employees should be monitored closely to ensure that they do not circumvent certain
controls, there by weakening the established internal control systems and
procurement procedures in the organization.
40
Appendix A
References
Abdinasir. (2008-2016). Somalilandtravel and travel tourism. Retrieved
from www.somalilad.com.
Abubakar. (2014, December). The Impact of Internal Control System in Private Financial Management.
Retrieved from https://academia.edu/8560840.
Anderson. (Nov,17,2008). Accounting Procedures of Internal Control . Bizmanualz.
Anderson. (2008). Accounting Procedures of Internal Control.
Bialy. (2005). Purchasing Principles and Procedures. UK.
COSO. (1994). Internal Control.
DiNapoli. (2007, December). Standards For Internal Control: Accessed though Internet.
Retrieved from http://www.osc.state.ny.us/agencies/ictf.
Hamed. (2008). Internal Control System. Retrieved from http://www.denetiment.net.
Hevesi. (2002). Internal Control Standards in New York States Government. Retrieved from
www.OSC.ny.US/Audit/Control/Standards.htm.
Jerome. (2011). The Benefits and Challenges of Mixing and Methodologies.
Millichamp. (2002). Auditing 8th Ed London: Thomson Learning . London: UK.
Mugo, N. a. (2011). Internal Factors Affecting Procument Process. Kenya.
Muresan. (2009). https://www.captio.com/blog/financial-control-definition-objectives-

andimplementation.
OECD. (2011). Internal Control and Internal Audit. Paris: France.
Weili and Sarah. (2005). The Disclosure of Material Weakness in Internal Control after Sarbanes Oxley
act. London.
Whittington. (2004). Principles of Auditing and other Assurance Services. New York.
41
Appendix B
Questionnaire
Part 1: Background Information
1: What is your gender?
Male female
2: what is your age?
20---29 30—39 40—49 50 or above
3: what is your level of education?
High school Diploma technical school bachelor master
4: what is your area of specialization?
Accounting management economics other
5: what is your experience in years?
Less than 1 6—10 years 11---15 years more than 15 years
8: What is your marital status?
Single married widower divorced
42
Part II: Internal Control Systems
tick “√” mark in the appropriate box to rank the statements as defined on this level of scale; SA =
Strongly Agree,
A = Agree, NS = Not sure, D = Disagree, and SD = Strongly Disagree
Section 1: Questions related to the components of internal control system
Control Activities
SA A NS D SD
1. All staff has available up to date organization policy and
procedures.
2. Senior management monitors and reviews each section’s actual
performance against objectives.
3. Performance reviews are made of specific functions or activities.
Value for Financial control

SA A NS D SD
1. The success of the organization service is the degree to which it
attains its set objectives.
2. The attainment of Value for Financial is based on the use of the
office resources in order to achieve its set objectives.
3. Internal control section carryout regular reviews to ascertain
whether the office achieved value for Financial control for all its
activities.
Risk Assessment
SA A NS D SD
1. A formal organization-wide objectives are established.
2. Employees at all levels are represented in establishing the

objectives.
3. Planning for future needs is done well in advance of expected
needs and considers various scenarios.
4. A process exists to identify and consider the implications of
external risk factors.
43
Section 2: Questions related to major challenges facing internal control
systems
SA A NS D SD
Obstacles facing internal control systems
1. Internal control is to help employees have a precise way of doing

their job and to help management easy understanding of what is
achieved in the budgeted work so far.
2. A good internal control will further have a positive impact on the
shareholders' confidence on the financial reporting of the company.
3. The management needs to educate the employees about the

importance of this control and to make it an offense to jump or avoid
these controls.
Section 3: Questions related to relationship b/w internal control and

procurement procedure
1. Does the internal control mechanism in place to make sure that communicated procurement
system corrections are implemented and effective to attain its objectives?
Yes No
2. Does the internal control system have written procedures regarding the beginning, review, and
approval of all purchases (goods & services)?
Yes No not sure

3. Which procurement procedure policy does your company use?
Documentation Disclosure Notification other
Part 4: Interview Questions
1. In your opinion, what are the best possible ways to mitigate the challenges facing internal control
systems in the offices?
……………………………………………………………………………………………………
…
2. Do you think all areas of internal control system (the control environment, control activities, risk
assessment, information and communication, and monitoring) well designed and operating in the
AGO? (Explain).
44
………………………………………………………………………………………
……………………………………………………………………………………
3. What would you suggest could be done to enhance effective internal control system on
procurement procedure and overcome the challenges in the organizations?
………………………………………………………………………………………………… …………………………………………..
Thank you very much for your cooperation
45

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1.1 Background of the Study

1.2 Problem of the statement

Internal Control System refers to an organized amalgamation of functions and procedures,

1.3 Purpose of the study

1.4 Objectives of the study

1.4.1 General objective

 To determine the relationship between internal control and procurement system in

1.4 Research questions

There is significance relationship between internal control and procurement system

1.6 Significances of the study

1.7 Scope of the Study

1.7.2 Content scope

Internal control is independent variable and procurement procedure is dependent variable.

1.7.3 Time scope

1.8 Description of the Study Area

Hargeisa – Somali Commentator – SAGAL JET Company, Somaliland’s largest full-service

2.1 Concepts, ideas, opinions from Authors/ experts

2.1.1 Types of internal control

➢ Preventive – designed to keep errors or irregularities from occurring. It includes hiring

2.1.3 Components of internal control system

2.1.3.1 Control Environment

2.1.3.2 Risk assessment

2.1.3.3 Control activities

2.1.3.4 Information and communication

2.2 theoretical perspectives

2.2.1 Roles and responsibilities of internal control activities

2.2.3 Effectiveness of internal control

A judgment as to whether an entity’s internal control is effective is based on considering the

2.2.4 Value for financial control

2.3 Related studies

A study by Ochoge in Uganda (2011) on internal controls and organizational performance: a

Table 1: sample frame

Department Total target population Sample size

3.5 Research instrument

3.6 validity and Reliability of the instrument

3.6.1 Testing validity

3.8 Source of Data

In this research were used both primary and secondary data.

3.8.1 Primary data

3.8.2 Secondary data

3.9 data analysis and presentation tools

3.10 ethical consideration

3.11 limitations of the study

4.2.1 Background of respondents

Gender of the respondents

4.2.2 What is your age?

Age of the respondents

Source: primary data 2019

4.2.3 What is your educational level?

Figure 3educational level

What is your level of education

Source: primary data, 2019

4.2.4 Area of specialization

What is your area of specification?

. Source: primary data, 2019

Figure 5: your experience

Less than 1 year 6 - 10 years 11 - 15 year’s

Name of the Advisor: Mohamed isak signature _Date__