Degree of Compliance of the Four Cebu Provincial Hospitals to the National Guidelines on Internal Control System (ICS)

This study assessed the compliance of four Cebu Provincial Hospitals (Bogo City, Carcar City, Danao City, and Balamban) with the National Guidelines on Internal Control System. These Level-1 government-owned hospitals, under the Cebu Provincial Government, were evaluated using a descriptive quantitative approach. Questionnaires based on national guidelines and an assessment tool from the Department of Health were distributed to key hospital staff to gauge adherence to internal control components: control environment, risk assessment, control activities, information and communication, and monitoring. Interviews with hospital staff and clients provided additional insights into implementation challenges. The findings indicate that compliance across the hospitals is partial. The highest compliance was observed in Control Activities, followed by Control Environment, Monitoring, Information and Communication, with Risk Assessment being the least compliant. Key challenges for Risk Assessment included insufficient medicines, equipment, and facilities. The study aligns with Alfred D. Chandler’s theories on organizational management and decentralization, suggesting hospitals should enhance personnel qualifications and decentralize procurement and financial management to improve compliance. Supporting literature from Sarah Cabahug-Oriol and Mamo highlights the need for adequate budgets, essential medical supplies, and well-maintained facilities for effective healthcare. Additionally, Frederick Winslow Taylor's theories on efficiency through automation and Anita M. Sheckells' views on internal controls to prevent fraud reinforce the need for strong internal controls. The study recommends creating an Executive Order for Internal Audit to strengthen the internal control systems of the Cebu Provincial Hospitals.