INTERNAL AUDIT FUNCTION AND ITS INFLUENCE ON ORGANIZATIONAL PERFORMANCE OF SEMI AUTONOMOUS AGENCIES IN THE STATE DEPARTMENT OF ENERGY IN NAKURU COUNTY, KENYA
CHEPKONGA, FLORA JEBICHII
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Semi-autonomous government agencies within the state department of energy are critical to the taxpayer and the government for efficiency in public service delivery. Diverse studies have examined the role of internal audit on the organizational performance but do not link internal audit to organizational performance within semi autonomous state agencies in Energy department. This study sought to fill this gap by targeting semi-autonomous agencies in the State Department of Energy in Nakuru County, Kenya. The study specifically sought to establish the influence of independence of internal audit, professional competencies, internal controls, management support to internal audit functions on organizational performance of semi-autonomous agencies in the state department of energy in Nakuru County, Kenya. The study was guided by agency theory and human capital theory. The study used correlational research design. The target population of the study was 72 individuals who comprised of internal auditors and senior management of the five semi-autonomous agencies in the state department of energy in Nakuru County. This study used census method to study all the population of the study, implying that the sample for the study was 72 respondents. This study used closed ended questionnaires to collect data from the study respondents. To ensure content validity of the research instruments, the researcher constructed the instruments in line with the research objectives of this study. A Cronbach alpha coefficient of a threshold of 0.7 and above was used to imply reliability. The pilot study was carried out in Kenya Power and Lightening Company in Kericho County. Descriptive statistics including frequencies mean and standard deviation were done on the data. For inferential statistics, Pearson correlation and multiple linear regression were used. Findings of the study on independence of internal audit are helpful to various stakeholders including semi autonomous agencies in the state department of energy in Kenya, employers in state department of energy, directors of state corporations, management teams of corporations and academicians and future researchers in related fields. The study established that the observed values of the performance of semi-autonomous agencies in the state department of energy in Nakuru County were strongly related to the predicted values of the same variable as indicated by an R value of 0.826. The study further established that 68.2% of the variation in the performance of semi-autonomous agencies in the state department of energy in Nakuru County was due to the changes that occur in management support, professional competencies, independence and internal controls of the agencies. This is because of a coefficient of determination of 0.682 (R-Square). The influence of independence of internal audit was found to be statistically significant at 5% significance level due to a p<0.05 and t-statistic value of 6.721. The study further found that there is statistically significant influence of internal controls on organizational performance of semi-autonomous agencies in the state department of energy in Nakuru County, Kenya. The study found that there was a statistically significant influence of management support to internal auditing on internal organizational performance of semi-autonomous agencies in the state department of energy in Nakuru County, Kenya. The study faced low response rate due to the nature of work of internal auditors and senior management of semi autonomous agencies in the state department of energy. This was mitigated through drop and pick method of questionnaire administration.