AN ANALYSIS OF THE CONTROL ENVIRONMENT

PRACTICES OF PRIVATE CATHOLIC SCHOOLS:

TOWARDS CRAFTING OF A COMPREHENSIVE
OPERATIONS MANAGEMENT SYSTEM

PSYCHOLOGY AND EDUCATION: A MULTIDISCIPLINARY JOURNAL

2023
Volume: 13
Pages: 314-320
Document ID: 2023PEMJ1161
DOI: 10.5281/zenodo.8325696
Manuscript Accepted: 2023-5-9
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article

An Analysis of the Control Environment Practices of Private Catholic Schools: Towards

Crafting of a Comprehensive Operations Management System
Den Mark C. Lorenzo*, Ma Cconcepcion T. Jalijali
For affiliations and correspondence, see the last page.
Abstract
This descriptive study employing quantitative-qualitative design aimed to determine the level of
implementation of control environment of private catholic schools and identify their best practices,
issues and challenges in anchorage to the Committee on Sponsoring Organizations of the Treadway
Commission Framework through floating of questionnaire, document review and analysis and
written and verbal interviews. Data revealed that there is an overall moderately strong level of
implementation of the control environment of the schools which implies that internal control
practices are existing but not fully implemented and documented. There is an evident practice on
codes of conduct and integrity of employees, communication with the internal and external forces
and an established practice of an approach to decision-making. On the other hand, issues and
challenges experienced are those that deals with quality of work due to complexity of organizational
structure, supervisory involvement in hiring process, inconsistent evaluation and addressing
employees’ behavior and performance. With such it is recommended that the DBES schools should
have an operations management system that caters to the needs of schools in terms of communication
and reporting, personnel, external affairs, and records management.

Keywords: internal control, control environment, operations management system

Introduction decided to conduct a study that will investigate the

A quest for high favorable performance is a challenge
to many organizations around the globe as the need of
observance of efficient and effective set of policies,
standards and regulations arise in its operations.
Unfortunately, several but few organizations, often
forgets the meaning of their existence and how their
controls are being applied in their operations because
of vague system and initiatives, thus, failed to qualify
as good entity. With the many changes evident, there
is significantly increased risks, resulting in a much
greater need for competence, credibility, transparency
and accountability that led to the introduction of the
COSO Internal Control Framework intended for an
efficient achievement of objectives in terms of
operations, financial reporting, and compliance.
Being dynamic and integrated, internal control was
emphasized by Arens (2007) to be a relevant tool for
an organization of all types which includes academic
institutions who, among these days are challenged by
different management styles and performance of its
employeesHowever, in its quest for an ideal
institution, schools are still in search for an established
effective control to perfect its function and objectives
as an organization. This is true as to the study of
Gerritzen (2019) revealed that while every school had
some form of internal control policy, not a single
school followed its complete internal control policy. It
is in the light of these premises that the researcher
internal control practices of private catholic schools’
control environment using the COSO Internal Control
Framework as standard. Moreover, the researcher
wanted to determine the best practices and issues and
challenges of the focus schools in their control
environment as a basis of policy recommendations
which may be adopted and applied by the said
schools.
Research Questions
Generally, this study probed on the internal control
practices of the DBES schools, their level of
implementation, best practices, issues and challenges.
Specifically, this study aimed to answer the following
questions:
1. What is the level of implementation of the schools
control environment?
2. What are the best practices experienced by the
respondents in the schools’ implementation of control
environment?
3. What are the issues and challenges experienced by
the respondents in the schools’ implementation of
control environment?
4. What recommendations may be forwarded towards
an effective operations management system?

Lorenzo & Jalijali 314/320

Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article
Literature Review
The Control Environment
COSO (2013) defined control environment as the set
of initiatives, principles and actions that provide the
basis for carrying out internal control across the
organization which is composed by five components
namely ethics and integrity, independence of the board
of directors from the m anagem en t and its
responsibility in internal control, responsibilities in
achieving organization’s goals, competency of
individuals in the entity and their responsibility in the
internal control.
Indications of Good Internal Controls on Control
Environment
According to Lightle et al. (2007), the Control
Environment “may be the most critical” element of an
internal control system as this is the “Ethical Culture”
of the school which is the foundation of the school’s
ethics initiatives, and it must be established at the top
level of the institution. This is supported by
Mpokoleng (2011) who stated that with ethics to be
incorporated in the mission statement is a relevant
thing an organization should do, but, however,
according to Whitley and Keith-Spiegel (2001), it
should not stop there since senior management must
demonstrate faithful commitment to developing a
strong ethical culture by constant sustenance of
academic integrity within the organization.
However, for the best practices to work in a consistent
and on-going manner, they must be both systemized
and institutionalized, and they must be implemented
with the intention of fulfilling the school’s mission.
The school’s mission must be clear, attainable, and
agreed-upon by all stakeholders. Every action taken
and every decision made throughout the school should
be to fulfill the school’s mission (Mpokoleng, 2011).
On the other hand, Sultan and Baguio (2013)
concluded that the domains of the control environment
significantly predict culture in the workplace in which
they recommended that the control environment
practices must be enhanced and develop to establish
strong cultural practices among employees of the
entire organization.
In addition to promoting honesty in the classroom,
administrators should also enhance the “Ethical
Culture” of the school by encouraging and supporting
faculty who make the development of students’ ethical
reasoning skills a priority in the classroom. (Scheinder
Lorenzo & Jalijali
and Becker, 2011). This is further supported by Cano
and Sams (2011) as they highlighted that the faculty
members—especially those who believe that it is too
late to change the behavior of students and can further
benefit from learning how moral development occurs
and how moral development can be encouraged in the
classroom.
Moreover, the above has the same findings with
Antonio (2018) when she found out that as perceived
by the teachers, there was a very high level of morale
denoting that morale was always observed. The high
level of internal locus of control in schools involved in
this study means that teachers were in control of their
lives most of the time.The findings of Abijay (2006)
supported the moral development of the teachers and
as a Catholic mentors as well when he found out that
the important contribution of Christian education is to
be able to form Christ in every student which starts
from formation of teachers to be teaching also the
Catholic identity of the schools. Thus, Jesus
commissioned His church to do the same and the
mission of Diocesan school is to teach men and
women about God and foster their love to God while
performing academic responsibilities.
In addition, any employee in an organization has a
need to gain knowledge on various issues through
conduct of different trainings in management.
Important aspects for an institution to function
efficiently, should be the management’s focus wherein
employees need to gain the knowledge mentioned
through proper training programs (Mpolokeng,
2011).The above statements are consistent with the
study of Estrada (2008) which findings revealed that
faculty members greatly appreciated the conduct of
internal training program that leads to professional
development of teachers in various educational levels
to assure effectiveness in their services. In summary,
Ramel (2018) found out that there is a tone set on
control environment by a university administration
among its employees as indicated by employees’ code
of conduct, corporate bylaws and formal policies for
financial reporting, whistleblower program,
organizational charts reflecting roles and
responsibilities, defined job duties of key employees,
employee training and evaluations and clearly defined
responsibilities and authority limits.
Methodology
To realize the objectives of this study, it utilized a
combination of quantitative and qualitative
approaches. This study utilized the descriptive
315/320
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article
research design where the researcher described the
focus schools’ level of implementation of internal
controls under the control environment, its best
practices, issues and challenges in the implementation
of control environment. Recommendations of
programs and action plans from the respondents were
further sought relative to their shared experiences
along internal controls of their respective schools. The
results of the study were the basis of the researcher in
identifying the internal control practices existent in the
focus schools or locale, to provide insights to the
educational system for considerations to revisit their
policies and recommend for crafting a unified policy
for all schools under its supervision.
Participants
The respondents were the personnel which includes
faculty and staff of the private catholic schools who
are in the school for not less than three years of
continued service. In selecting participants, purposive
sampling technique was used while achieving the
criteria set above.
Instruments of the Study
Questionnaire. An adopted-modified questionnaire
was used for data gathering, lifted from Albany State
University’s list of practices an educational institution
should have which were also validated and anchored
with the internal control standards set by the COSO
Framework. The questionnaire was modified as the
researcher added qualitative questions to suit the needs
of this study.
The questionnaire was composed of four (4) parts
namely: Part I is the profile of the respondents as to
school, age, years of service, educational attainment
and position; Part II is the self-assessment of the level
of internal control implementation; Part III is the
written interview centered on the best practices and
issues and challenges in the operations of the DBES
schools that the respondents have experienced and
observed; and Part IV is the recommended programs
or actions that the respondents opined for
recommendations to the administrators of the schools.
The instrument is composed of the assessment of the
level of implementation of the control environment
assessing the school’s performance. Qualitative parts
were included where the respondents wrote the
practices they are carrying out in their day-to-day
transactions in their respective schools. Another part
was provided for the respondents to write the issues
and challenges they have faced in the implementation
Lorenzo & Jalijali
of internal controls along the five areas. The
respondents’ recommendations for actions or programs
of the personnel for better operations were also taken
captured.
Procedure
Phase 1. The researcher prepared a comprehensive
questionnaire to gather data and requested list of
names of the employees per school from the office of
the system’s superintendent or from the human
resource staff of the schools.
Phase 2. After being given with the go-signal by
authorities, the researcher reproduced the
questionnaire and gave them to a reliable emissary per
school-respondents who distributed to personnel of the
different diocesan schools the instrument used for
gathering data.
Phase 3. Compliant to the set timeline, the floated
questionnaires were retrieved, encoded and subjected
to the SPSS software and analyzed thematically.
Phase 4. After the data was tabulated and analyzed
quantitatively, document scanning and analysis were
done. Due to the restrictions brought by the pandemic,
the researcher, was furnished with the work in
progress manual of operation of the system. This was
reviewed as the related relevant documents that
substantiated the result of the quantitative data. Further
validations on the data gathered through phone calls
were done to some respondents.
Phase 5. Analysis and interpretation of data were done
after all the information has been assured of
completeness.
Ethical Considerations
This study employed utmost ethical consideration
particularly on the participation of the faculty and staff
in the study. Their participation is purely voluntary,
rest assured that all information shared with the
researcher was treated with utmost confidentiality and
will be used solely for academic purposes. Any record
of their participation will be handled with extreme
caution and anonymity. Communication of seeking
permission will be observed before the conduct of
study. Moreover, this study is not after any financial
gain nor any other personal purpose such as self-
glorification and the like except the fact that the
information they will share willingly particularly on
the innovations on how to improve their academic
performance through various suggested instructional
materials and strategies for teachers.
The respondents’ participation is expected to
contribute to the larger community as it tries to
316/320
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article
understand the complexity of the situation. Finally, if
by their personal goodwill, this study shall become a
full blast paper qualified for future research
convocations and for publication, the researcher
considers seeking approval from the participants for
the said endeavor.
Results and Discussion
The overall level of internal control implementation
of DBES Schools.
Overall Control Environment
Table 1. The Overall Level of Internal Control
Implementation of DBES Schools as to Control
Environment
Table 1 presents the level of internal control of the
DBES schools as to Control Environment. Data
revealed that there is a mean of 3. 99 (SD=.66) which
equates to moderately strong level of internal control
which implies that the DBES schools has been
implementing well the protocols and procedures when
it comes to the ethical culture of the institution or
known as the control environment.
Among the components of the control environment,
the integrity and ethical values of the employees has
the highest mean (m=4.15, SD=.70) which implies that
the schools have established a good culture which
focuses on the integrity and ethical values. Moreover,
this manifests that DBES schools have established
clear and acceptable business practices, codes of
conduct, good handling of conflicts of interests and a
commendable integrity among employees.
This is supported by Mpokoleng (2013) who stated
that with ethics to be incorporated in the mission
statement is a relevant thing an organization should do,
but, however, according to Whitley and Keith-Spiegel
(2001), it should not stop there since senior
management must demonstrate faithful commitment to
developing a strong ethical culture by constant
Lorenzo & Jalijali
sustenance of academic integrity within the
organization.
The lowest among the components is the commitment
to competence with an average mean of 3.76. Though
it is moderately strong in its level of implementation, it
still implies they value competence of their employees
but still, the schools should make this higher as the
quality of the education lies on the competence of the
employees towards development, innovation, and
excellence.
Commitment to competence of the schools is at
moderately strong level which means that the schools
have controls regarding competence of employees but
not fully implemented but still, they value and promote
competence among employees. It can be implied that
employees understand the knowledge and skills
required to accomplish tasks. This also means that
employees were equipped with appropriate and
relevant capabilities to do their job and their
responsibilities with utmost competence.
As to management philosophy and operating style,
there is a moderately strong level of internal control
implementation which means that the schools have
control practices existing but are not fully
implemented. This also implies that employees are
satisfied with the initiatives and actions of the
administration as to the concern and effort to ensure
compliance to the policies, procedures, laws and
regulations and exerts effort to get the job done right
the first time.
Organizational Structure posted a moderately strong
level of internal control implementation which means
that schools have existing controls over organizational
structure however, it is not fully implemented. This
revealed that the size of the organizational structure is
proportionate with the organization’s availability of
human resources which implies that there is a visible
picture of the organization chain of command to the
employees and that there is clear understanding of the
documented structure.
As to assignment of authority and responsibility, the
schools posted a moderately strong level of internal
control implementation which implies that employees
are accountable for every action they are to make
which is because of the clear assignment of authority
and responsibility. The results also imply that key
personnel are knowledgeable and experienced, and
that management does not delegate authority to
inexperienced individuals and that employees are
satisfied with the resources the management provided
for employees to carry out their duties.
317/320
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article
Lastly, human resource policies and practices of the
schools posted a moderately strong level of internal
control implementation which means that schools have
existing controls over human resource policies and
practices but not fully implemented. This implies that
there is a careful hiring process that is in place and the
Human Resources Department is involved in
identifying potential employees based on job
requirements.
The best practices of schools in their control
environment implementation.
According to Lightle et al. (2007), the Control
Environment “may be the most critical” element of an
internal control system as this is the “Ethical Culture”
of the school which is the foundation of the school’s
ethics initiatives, and it must be established at the top
level of the institution.
Under the control environment, the data revealed that
schools have an established and observed practices on
integrity and ethical values, management’s philosophy
and operating style, organizational structure,
assignment of authority and responsibility and human
resource practices, there is an evident practice on
codes of conduct and integrity of employees, a practice
of communication with the employees and an
established practice of an approach to decision
making.
Moreover, when it comes to organizational structure, a
clear view and understanding of the organizational
charts is very evident among the schools, as to
assignment of authority and responsibility, the
delegation of authority and assignment of
responsibility for operating and financial functions is
also an evident practice and a commendable human
resource policies and practices as evident by the
trainings that employees are associated with or
participated in.
The issues and challenges experienced by the
s c h o o l s in t heir c o n t r o l e n v i r o n m e n t
implementation.
The data revealed that the said schools had issues and
challenges on their controls. Under management’s
philosophy and operating style, employees had a
challenge in how their jobs get done which implies
that management is willing to get the job done without
adequate regard to quality. On organizational structure,
schools are challenged by the complexity of the
organizational structure which implies that lines of
responsibility are unclear or unnecessarily complicated
Lorenzo & Jalijali
for the size and activities of the entity.
Moreover, on the human resource policies and
practices, issues arose on selection of personnel which
implies that the hiring process is informal, and
sometimes proceeds without adequate involvement by
higher-level supervisors; dealing with inappropriate
behavior which suggests that reprimands are not
timely, direct, or are not consistently applied (climate
of favoritism); and evaluation of personnel which
implies that evaluation process is ad hoc and
inconsistent which paved way that performance issues
are not formally addressed.
The recommendations to be forwarded to the
DBES Schools.
Addressing the issues on overwork or overload of
work assignments and too much paperwork, it could
be recommended that a review on the legal policies on
workload and the number of staff/teachers required be
put in place. Moreover, a streamline work process may
be proposed, and the management consider aligning
these patterns with work descriptions to avoid
duplication of work and over staff. And lastly, a
review on the possibility of maximizing the
technology available by digitizing some work or of
using the virtual space be evident. With the mentioned
recommendations, the schools could provide an
opportunity to delegate work responsibilities
commensurate to the size of the organization and that
every member of the working environment could be
given a limited or bound only by his or her job
responsibilities in which in this case, no overwork
could be experienced by an employee since his or her
concern only falls of the written job responsibilities he
is expected to deliver.
In like manner, to address the unclear line of
communication, the management is recommended to
define the organizational framework and discuss the
same at the start of school year then review the same
every meeting and/or as the need arises. Anent this,
streamlined flow of communication must be
established and stated in the Faculty and Staff manual
so as all employees would be knowledgeable about the
flow of reporting and the immediate reporting
authority. Lastly, administrators and middle managers
like subject group heads or other department heads
must always stick to the standard operating procedures
agreed during the meeting or as stated in the
handbook.
It is also recommended that the management, together
with the employees review the policies on hiring as
318/320
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article
stated in the manual of operations or faculty handbook
and take into consideration relevant policies and
procedures that need development and update such in
order for it to be inclusive and sensitive to the needs of
the school and to the employees. Specifically, the
hiring, recruitment and development must be clearly
and properly delegated to an employee or group of
employees whose special tasks will be to become
Personnel Selection Board (which could be the
principals and other middle managers) who are to be
upskilled to help the administration in the Human
Resource Management and Development; faculty and
staff induction program where everyone in the work
environment knows who they are working with and
how communication and reporting should be done and
lastly, an in-service training should be conducted to
capacitate employees with needed skills and ideas for
development of one’s professional growth.
Conclusion
The focus schools have existing internal control
practices in their operations but these are not fully
implemented, monitored, compiled and documented.
There is an evident practice on codes of conduct and
integrity of employees, a practice of communication
with the internal and external forces and an established
practice of an approach to decision making as they
understand the organizational structure and it follows
that the delegation of authority and assignment were
clear leading to achievement of organizational goals
effectively and efficiently.
The schools have issues and challenges on their
controls specifically on the quality of their work which
is attributed to the complexity of the organizational
structure which was unnecessarily complicated for the
size and activities of the entity. Some schools’ hiring
process is informal, and sometimes proceeds without
adequate involvement by higher-level supervisors;
dealing with inappropriate behavior were
inconsistently applied including the evaluation process
as ad hoc and inconsistent which paved way that
performance issues are not formally addressed. A
recommendation to be forwarded is to consider
crafting an operations management system which
efficiently, effectively and economically monitors
communication, reporting, personnel, external affairs
and records management with proper implementation,
monitoring and documentation.
Lorenzo & Jalijali
References
Aboagye, S., Anning, S., Asiedo, E., Gyamfuah, J., & Kwarteng, F.
(2015). Effectiveness of internal controls in private universities in
Ghana (a case study of Christian Service University College).
Retrieved from
http://ir.csuc.edu.gh:8080/xmlui/bitstream/handle/123456789/364/S
TEPHANIE%20THESIS.pdf?sequence=1
Abugri S. (2015). Assessing the internal control systems of public
institutions (a case study of Tamale Polytechnic). Retrieved from
http://ir.knust.edu.gh/bitstream/123456789/8559/1/SALIFU%20SH
AIBU%20ABUGRI.pdf
Adagye, I. (2015). Effective internal control system in the Nasarawa
State Tertiary Educational Institutions for efficiency: A case of
Nasarawa State Polytechnic, Lafia. Retrieved from
https://waset.org/publications/10002940/effective-internal-control-sy
stem-in-the-nasarawa-state-tertiary-educational-institutions-for-
efficiency-a-case-of-nasarawa-
state%20polytechniclafia&ved=2ahUKEwinqPSQgePeAhUBAogK
HUMJB0AQFjAKegQIBxAB&usg=AOvVaw1TEieX_RKJOLYD
Nc_FFve
Albany State University. (2017). Internal control self-assessment
checklist. Retrieved from
https://www.asurams.edu/wp-content/uploads/Internal-Control-Self-
Assessment-3.2012-Website.pdf
Canencia, O. P. & Salvador, J. E.. (2015). The Monitoring and
Evaluation Tool of the Department of Education. IAMURE
International Journal of Education, 13(1). Retrieved from
http://ejournals.ph/form/cite.php?id=3445
Celis, N. J.. (2018). Compliance Theory: A Case Study Approach in
Understanding Organizational Commitment. DLSU Business &
Economics Review, 27(2). Retrieved from
h t tp :/ / ej ou rna l s .p h/ fo rm /c i te . ph p ?i d= 119 53
Committee of Sponsoring Organizations of the Treadway
Commission (COSO). (2013). Internal control – integrated
framework. Retrieved from
https://www.coso.org/Documents/990025P-Executive-Summary-fin
al-may20.pdf
Gamboa, R. S.. (2017). Educational Change, Change Management
Strategies and Transformational Leadership as Determinants of
Organizational Culture of Tertiary Schools in Region XI. Tin-aw,
1(1). Retrieved from http://ejournals.ph/form/cite.php?id=13450
Griffin, A. (2018). The importance of internal controls for
nonprofits. Retrieved from
http://www.insourceservices.com/the-importance-of-setting-internal-
controls-for-nonprofits/
Herz, R., Monterio, B. & Thomson, J. (2017) Leveraging the COSO
internal control—integrated framework to improve confidence in
s u s t ai na b il it y pe rfo rm a nc e data. R et rieved from
https://www.imanet.org/-/media/73ec8a64f1b64b7f9460c1e24958cf
7d.ashx
Kelley, D. (2019). Best internal control practices for schools.
Retrieved from
https://aronscroll.com/best-internal-control-practices-for-schools
Lee Matolo, M. . (2017). Influences of Administrators’ Leadership
and Communication Skills on Teachers’ Empowerment and
Students’ Achievement. Interdisciplinary Research Journal, 7(1).
Retrieved from http://ejournals.ph/form/cite.php?id=15341
Lozanta, A. H.. (2020). Information Literacy Program for Lifelong
319/320
Psych Educ, 2023, 13: 314-320, Document ID:2023 PEMJ1161, doi:10.5281/zenodo.8325696, ISSN 2822-4353
Research Article

Learning in Higher Education . Enderun Colleges Scholarly wjP2I2SpojiAhWG6XMBHYPVBYQQFjACegQIBBAB&usg=AO

Review,3 ( 2 ) . Retrieved from vVaw3wIFfdJgbwWVYmu-90dTW2&cshid=1557193658153
http://ejournals.ph/form/cite.php?id=15348http://ejournals.ph/form/c
ite.php?id=15348 Wilson, K.I. (August 2015). Financial management practices of
senior high schools in the Techiman municipality. Published Thesis.
Perez, J. L.. (2019). Web-based record system for southville
international school and colleges college of psychology . Innovatus, Affiliations and Corresponding Information
2(1). Retrieved from http://ejournals.ph/form/cite.php?id=14081
Den Mark C. Lorenzo, MSA
Ramel, R. (2018). Tertiary education facilities management audit in Solano High School
a Philippine catholic university using balanced scorecard: towards
Department of Education – Philippines
institutional sustainability and accreditation. Dissertation. Saint
Mary’s University. Ma. Concepcion T. Jalijali, CPA, MBA
Saint Mary’s University - Philippines
Ramos, D. R.. (2019). Perceptions of Students, Faculty and
Administrative Sta◻ on the Data Privacy Act: An Exploratory
Study. JPAIR Multidisciplinary Research Journal, 38(1). Retrieved
from http://ejournals.ph/form/cite.php?id=14863.

Tsedal, L. (2015). Assessment of internal control effectiveness in

selected Ethiopian Public Universities. Retrieved from
http://etd.aau.edu.et/bitstream/handle/123456789/5585/Tsedal%252
0Lemi.pdf%3Fsequence%3D1%26isAllowed%3Dy&ved=2ahUKE

Lorenzo & Jalijali 320/320