Abstract:
In an attempt to bridge the gap between the budgetary allocations and actual expenditures most
universities have started income generating units with the aim of boosting their operational
expenses. Whereas there is the potential of the use of Income Generating Units (IGUs) to
generate additional funds, most universities still experience challenges in full implementation
and realization of the revenue goal. This study therefore sought to determine the financial
control mechanisms affecting performance of income generating units among selected public
universities. The study sought to determine the effect of internal controls, credit policies,
financial risk management and internal audit on performance of income generating units in
selected universities. Targeted population was all the 290 employees in the IGU departments of
selected public universities. The respondents were sampled using simple random sampling so as
to enable equal representation of the target population without any biasness. Data collection
was done using the questionnaire to ensure sufficient data was collected from the respondents.
Descriptive statistics assisted in the determination of respondent’s views and opinions on every
variable. Qualitative data was analysed using content analysis into meaningful, precise and
comprehensive statements and presented in quotations. Data analysis was done using SPSS
version 21 and data presented in form of figures and tables. The study ensured that all ethical
considerations were considered by the study. The findings were that most employed Income
Generating Units in Public Universities were Collection of rental fees, Evening and executive
programs and Trainings of both short and long courses while the least was established to be
Sales of memorabilia and books. All the financial control mechanism investigated namely
internal audit, internal control measures, risk management strategies and credit policies had
large extents of adoption in the selected universities. The results of the regression analysis
showed that the financial control mechanisms investigated had a significant positive relationship
on performance of the IGUs. Specifically, 47% of the variation of the performance of IGUs was
established to be explained by the studied factors. The study concluded that the performance of
the IGUs among the selected public universities was largely accounted for by the implemented
financial control measures. Therefore effective financial control mechanisms is concluded to
lead to better IGU performance whereas shortcomings in the financial control mechanisms is
concluded to lead to diminished returns in the IGUs. The study recommended that the
management in charge of the IGU department in the public universities to prioritize the
formulation, implementation and monitoring of financial control mechanisms in the IGUs. To
facilitate effective financial controls, the study recommended that the management especially
those in the audit section to conduct regular checks and inspections on the IGUs. Additionally,
frequent reforms were recommended to address the shortcomings experienced in integrating
financial control measures in IGUs.
