An inquiry of internal control practices of California community colleges

Jenkins K. Kumeh

doi:10.17918/etd-4065

California community colleges are a two-year higher education system with 72 community college districts (district) that have 112 colleges. Some districts are single-campus districts, while others are multi-college campus districts. This exploratory ethnographic mixed methods study inquired about the Internal Control practices of these districts seeking to identify what the practices are. This study's conceptual framework included: a) the Internal Control practices of higher education; b) the Internal Control role of management; and c) best practices of the United States' Sarbanes-Oxley Act of 2002 (SOX). In-person interviews, survey, artifacts, and field notes were the basis for the study's findings and conclusions. Interviews were conducted at three multi-college districts headquarters. Interview data were used to develop the survey, which was then administered to the remaining CFOs and CAEs of the other 69 Districts. The findings indicated the Internal Control practices of California community colleges are guided by the compliance requirements of the California Community Colleges' Chancellor's Office, California Education Code, California Government Code, Federal compliance requirements (A-133), as well as the Board approved policies of each California community college district. The practices include control activities, conflict of interest policies, code of ethics policies, whistleblower policies, shared governance, risk assessment, monitoring of Internal Controls, and corrective action on Internal Control deficiencies by District management, and internal audit. Integrity and accountability were identified by study participants as the benefits associated with their districts' practices. Conclusions indicate practices are congruent with the best practices of Internal Controls of higher education and the best practices identified in SOX; however, internal audit, risk assessment, monitoring of Internal Control activities by management, and correction of Internal Control deficiencies by management are marginalized by most of the districts in their Internal Control practices raising issues of risk. Three best practices that may improve the districts' practices - joint control self-assessment between internal audit and the other units of the districts, promotion of a positive control environment, and certification of the adequacy and effectiveness of each district's system of Internal Controls by senior and middle management of the district - were among those identified by participants.

An inquiry of internal control practices of California community colleges

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An inquiry of internal control practices of California community colleges

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