The Moderating Effect of Internal Controls on the Relationship between Tendering Process and Procurement Performance of Public Universities in Kenya

Abstract

As publicly funded institutions, public universities are expected to follow where appropriate a competitive and systematic tendering process when procuring goods or services. Many public institutions struggle with establishing robust internal control systems. These controls are critical for preventing fraud, waste, and abuse. Despite legislation and regulations aimed at ensuring adherence to international best practices and promoting integrity and accountability, there have been instances of inefficiencies in the tendering process, particularly within public universities in Kenya. The purpose of this study was to assess the moderating effect of internal controls on the relationship between the tendering process and procurement performance of public universities in Kenya. Specifically, the study sought to examine the moderating effect of internal controls on the relationship between supplier pre-qualification, supplier evaluation, competitive negotiation, supplier management and procurement performance of public universities in the country. The study was anchored on Stakeholder Theory, Fuzzy Set Theory (FST), Game Theory and Commitment Trust Theory. A positivist research philosophy and a correlational research design was adopted. Target population of the study was 1,016 employees from the selected public universities. The study adopted stratified and simple random sampling to select a sample of 287 respondents. Primary data was obtained using a structured questionnaire, which was self-administered using a drop-and-pick later technique. The validity of the research instrument was ensured through an extensive literature review and consultation with subject experts and supervisors from the procurement department. The reliability of the instrument was examined through a pilot study involving 29 respondents from the University of Kabianga where a Cronbach alpha coefficient of 0.834 was obtained. The obtained quantitative data was analyzed descriptively using means, frequencies and standard deviation, and inferentially, correlation and regression analysis were used. The study established that internal controls had a positive moderating effect on the relationship between pre-qualification (R2 , change of 0.075; p<0.05), supplier evaluation (R2 , change of 0.127; p<0.05), competitive negotiation (R2 , change of 0.142; p<0.05), and procurement performance. However, internal controls had a negative moderating effect on the relationship between supplier management (R2 , change of 0.004; p<0.05), and procurement performance. The study concluded that pre-qualification of suppliers, supplier evaluation, competitive negotiation, and supplier management were important factors in enhancing procurement performance in public universities because they significantly explained the change in procurement performance and that internal controls enhances the relationship between tendering process and procurement performance of public universities in Kenya. Therefore, the study recommends that public universities improve internal controls to ensure efficiency in the tendering process as well as the procurement performance in public universities in Kenya.