Evaluation of the cause-and-effect relationship of internal controls on financial reporting in the Ministry of Health and Social Services, Namibia

• Author: Chata, T.
• DOI: https://doi.org/10.47348/JCCL/V7/i2a7
• Published date: 09 November 2022
• Date: 09 November 2022
• Citation: (2021) 7(2) JCCL&P 134
• Pages: 134-151

https://doi.org/10.47348/JCCL/V7/i2a7

134

EVALUATION OF THE CAUSE-

AND-EFFECT RELATIONSHIP

OF INTERNAL CONTROLS ON

FINANCIAL REPORTING IN THE

MINISTRY OF HEALTH AND SOCIAL

SERVICES, NAMIBIA

TARIRO CHATA*

Faculty of Commerce, Management & Law, School of Accounting,

University of Namibia

LILLIAN PAZVAKAWAMBWA†

Faculty of Agriculture, Engineering & Natural Science, Department of

Computing, Mathematical & Statistical Sciences, University of Namibia

Abstract

This article evaluates the effect of the internal control environment

on the quality of financial reporting in the Ministry of Health

and Social Services (MOHSS) in Namibia. The Internal Control-

Integrated Conceptual Framework of the Committee of Sponsoring

Organizations (COSO) of the Treadway Commission was applied

as the standard of measurement against the variable internal

control, and the Conceptual Framework for Financial Reporting of

the International Financial Reporting Standards (IFRS) was used to

measure the qualitative characteristics of the financial reporting

process. A mixed research method was used to evaluate the cause

and effect relationship between the key variables and to measure the

perceptions of the respondents on the quality of the financial report.

Probability sampling techniques were used on the 269 staff members

of the MOHSS, and data were analysed using both descriptive and

inferential statistics, using the SPSS software programme. The validity

and reliability of data were computed using Cronbach’s Alpha. The

results of the study indicated that there is a positive relationship

* BBA (Solusi University, ZW) MSc Business Administration (Andrews University,

USA) MSc Accounting & Finance (UNAM) DBA (UNAM).

† BSc (Hons) Statistics (University of Zimbabwe), MSc Statistics (University of

Zimbabwe) PhD in Applied Statistics (UNAM).

(2021) 7(2) JCCL&P 134

© Juta and Company (Pty) Ltd

135

CAUSE-AND-EFFECT RELATIONSHIP ON FINANCIAL REPORTING IN THE

MINISTRY OF HEALTH AND SOCIAL SERVICES, NAMIBIA

https://doi.org/10.47348/JCCL/V7/i2a7

between the key variables although it is weak. Therefore, the study

recommends the strengthening of governance systems to improve

the safeguarding of financial resources.

Keywords: internal control, control environment, public sector,

qualitative financial reporting

I INTRODUCTION

Although Namibia is one of the least populated countries in the

world, with a population of approximately 2.3 million inhabitants

and a surface area of roughly 824,116 square kilometres,1 it holds

the infamous record of being the country with the highest levels

of inequality in the world.2 Low industrialisation, which has

contributed to higher levels of unemployment and a lack of the right

skills, is worth noting.3 The lack of the right skills (which are needed

to enable a country to achieve higher levels of growth) prevents the

country from breaking the cyclical problem of poverty.4

Namibia’s Health Public–Private Partnership (HPPP) is a programme

that was established to augment the country’s limited public funds.

The Ministry of Health and Social Services (MOHSS) has a very distinct

mandate to provide public services intended to promote the social,

economic and environmental welfare of communities as mandated

by art 95(b) of the Namibian Constitution.5 While Namibia is

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(eds) Tearing Us Apart: Inequalities in Southern Africa (2011) 181–255; R K Shalyefu

‘The interplay between structure, culture and agency on student learning and

academic development activities – A trajectory of the University of Namibia’

(2018) 4(1) The Namibia CPD Journal for Educators 69–87 at 69.

3 R T Chifamba & O Odhiambo ‘An analysis of the potential of manufacturing

and services sectors as drivers of economic growth and development in Namibia’

(2015) 1(2) Business and Management Studies 167–178; A Gariseb ‘Namibia’ in A

Froehlich (ed) Integrated Space for African Society (2019) 201–215; H Jauch ‘The

ILO’s Future of Work Project in the Namibian context’ in Perspectives on Namibia’s

Social Protection 2017–2020 (2021) 165; C M Mukata, W Ladzani & T Visser ‘The

effectiveness of business management and entrepreneurship training offered by

SME service providers in Namibia’ (2018) 13(2) African Journal of Business and

Economic Research 81–98.

4 O Fagbadebo Corr uption, Governance and Political Instability in Nigeria: A

Dysfunctional Conundrum (2019); Mukata et al op cit note 3.

5 MOHSS Annual Report 2014–2015 (2015); E Zere, C Mandlhate, T Mbeeli,

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