Effect of Ownership Types on the Internal Control System of Universities in Southwest Nigeria

To close the gap between supply of and demand for university education, the private sector was licensed to participate with the Federal and State governments in Nigeria. Since owners of universities are generally different from the management, a stewardship-cum-agency relationship arises. This calls for sound internal controls to ensure that the interests of stakeholders are safeguarded. This study examined the differences in types of internal controls in universities in Southwest Nigeria and determined the role of ownership in the observed differences. Two states (Ondo & Ekiti) were initially selected out of six in Southwest Nigeria and three universities were selected from each sampled state: State, Federal, and Private. Primary data was sourced through questionnaires to senior staff of Bursary and Audit units of the sampled universities. ANOVA, Principal Component Analysis (PCA), and F statistics were adopted for data analysis. Significant differences were observed in five internal control features of the universities tested at 0.05 level of significance. Ownership type has a significant effect on: IT adoption (F-value 8.387, p < 0.05); segregation of duties, custody and accounting for fixed assets, smooth flow of operation, and quality of output (F-value 5.334, p < 0.05). It was concluded that ownership types affect how well the universities’ internal controls achieve set objectives. It was recommended that the management in the universities should be aware of the stewardship and agency roles they have to play to their principals, and their commitment to other stakeholders.