The Effects Of Internal Control System On Inventory Management. A Case Study Of Joint Medical Store

ABSTRACT.

This research was carried out to examine the effect of internal control system on inventory Management in Joint Medical Store.

The objectives of the study include the following; to examine the relation ship between budgeting and the performance of local government, to establish the effect of budgeting on the performance of local Governments, and to find out

the types of budgets used in !banda district head quarters.

The methodology used include , the information generated from the field and secondary sources of data like the journals .Theories in available literature and also empirical literature were critically reviewed , and finings revealed that budgeting process has a great impact on local governments .

The implication is that when good internal control systems are maintained, good inventory management is obtained, High Profits earned, a good corporate image attained, and good decisions will be reached of which will motivate the

employees to perform their duties efficiently and effectively. However when good internal controls are not maintained, the result will be poor inventory management, low sales, low profits, a bad corporate image, delays in decision making which will lead to employees' demotivation and poor performance

Recommendations that emerged from the findings include among others; the need for training staff members especially when installing a new IT system and also should improve and maintain proper internal control procedures so as to have effective inventory management.

TABLE OF CONTENTS

Declaration ....................... . ... ... . ... .. ............................. i

Approval ............. ............................... ..... ..... ............. ii

Dedication ........ .. .................. . .. . ... .. ..... ......................... iii

Acknowledgement ........ ........... .. ... . ... .. .... ...................... .iv

Abbreviations ......................... ... . .. ... ....... ........... .. .... v

Table of contents ... ......... .. .. . .... ........................................................ vi-ix

Abstract ......... .. .... . .. .... . ..... . ........... ...................... v

CHAPTER ONE

1.1. Background ... .. .. ................ ............ .. ................... .. 1

1.2. Statement of the problem .......................... .. ... 3

1.3. Purpose of the study ................................. . .. . .. ... ............................. 3

1.4. Objectives of the study ............ .. ............ . .............. 3

1.5. Research questions ........ . ........ . .... . .... . .................. 4

1.6. Scope of the study ............... .. . ............... . ........... ..... .... 4

1. 7. Significance of the study .. ................................................ 5

1.8. Conceptual frame work .. ... .. .. . .............................. 6

CHAPTER TWO

LITERATURE REVIEW

2.0. Introduction ......................... ...................... ... .. .. ..... 7

2.1. Definition of concepts .. ...... ....... ...................... .. ........ 7-8

2.2. Effect of internal control system on inventory management ................ 8-11

2 .3. Systems of internal control for every company .. ............. . 11-14

2.4. Challenges (Limitations) ... .. . .. .. ... . ........... .... 14-15

CHAPTER THREE

METHODOLOGY

3 .0. Introduction ........... . .............................. .. ..... ....... 16

3 .1. Research Design . ... ... ..... . .. ....... . .... . ........ 16

3 .2 . Study population .. .... ....... .. . ....... .. ... . ..... . .. ... ... . 16

3 .3. Sampling Design ...................... .. .............. 16

3 .4. Data collection Instruments ................................ .... .... . 17

3.5. Research Procedure ............................ . .... . ... .. .. .. ..... 18

3.6. Data Analysis ................. ............ . .... .... .... .............. 18

3.7. Research Limita tion .................... . ........................... 19

CHAPTER FOUR

Data presentation, analysis and interpretation

4.1 . Data analysis ..................... . .. . .... . .. ........ ........ . .. 20

4.2. Distribution of questionnaires .... . ... ..: ........................... 20

4.3. General description of the demographic information ......... . .... .... .... 20

LIST OF TABLES:

Table one: Responses of the respondents .. . ... .. .... .. ... ..... .. ..... 21

Table two: Ages of respondents during the study .... . ....... ................... 22

Table three: Gender distribution of respondents during the study .......... ...... 24

TableFour: working experience of respondents ... ............. .................. 24

Table 5: Marital status . .... . .. .......... . ...... . ..................... . 25

4.4: weakness of internal control system in Joint Medical Store ....... . .... ... 25-27

4.5: The effect of the correct internal control systems on inventory

Management at Joint medical stores ............................... . ........... 27-30

4.6: Challenges faced by Joint medical stores (Jms) in using existing

Internal controls ................ .......... ............. . .. .......... .... 30-31

4.7: Forms of inventory management control methods used at JMS ... . .. 31-33

4.8: Indicators of poor inventory management at JMS .......... ................ 34-36

4.9 Stock taking in Joint Medical Store ........ ............ . .. . .... . ...... 36

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS.:.

5.1. Summary of the findings .... .. ...... ......... .. 37

5.2. Conclusion on internal control system . ....... . .................... 38

5.3. Conclusions on inventory management ..... . .......... . ... .... ..... 38-39

5.4. Recommendations of the study .... . .............. . .............. .... 39-40

5.5. Areas for further study .. ... ...... ............. ... ... .. ... ..... . .40

REFERENCES ............................. ... .. .............................. 41-43

APPENDIX I: INSTRUMENTS

a) Questionnaire ............... ...... . ... .. ............................ .44-46

b) Interview Guide ........ . .............. .................................... 46

APPENDIX II

Timeframe of the study ......................................... .......... .4 7

APPENDIX III

Budget ..... . .. .. .. .......................................47