The effect of internal control and organizational culture on the performance of public schools in Malaysia / Siti Noorzainah Sahat

The main weaknesses in internal control (IC) are reported repetitively in Public School Consolidated Audit Reports within the period 2008-2013 and the biggest weakness is failing to provide source documents as evidence to support the collection and expenses made by public schools management. The weaknesses reported above shows the ineffectiveness of the IC in managing public money and improper financial management. This study uses IC guideline for the public sector which is INTOSAI Gov 9100. Effective IC will provide reasonable assurance that the IC components, which include control environment, risk assessment, control activities, information and communication, and monitoring will help Malaysian public schools achieve its objectives. The usage of organizational culture affects the manner of implementation of IC in public organization. This study uses three dimensions of organizational culture - bureaucratic, innovative, and supportive, that exist within the school structure to support schools’ long term public performance. Thus, the objective of this study is to examine the effect of IC components on the performance of public schools in Malaysia and further examine the mediation effect of organizational culture on the relationship between IC components and organizational performance of public schools in Malaysia. The performance of public schools in Malaysia is measured using the ‘3Es’ concept - economic utilization of resources, efficiency of activities, and effectiveness of operation…