Knowing Why Controls Exist: Internal Control Objectives as Predictors of Staff Awareness in Philippine Local Government Units

Internal control in local government depends not only on prescribed mechanisms but also on whether the personnel who operate them understand the system they are meant to uphold. This study examined which dimensions of internal control predict awareness of internal control among internal control unit (ICU) staff in six cities of the Philippine National Capital Region. Survey data from 131 ICU personnel were analyzed using binary logistic regression, with awareness as the dichotomous outcome and respondents’ assessments of five internal control objectives and five internal control standards as predictors. Two objectives were significant at the .05 level: compliance with laws and regulations was associated with higher odds of awareness (OR = 2.29, p = .024), whereas adherence to managerial policies was associated with lower odds (OR = 0.48, p = .026). Two further objectives were marginally significant at the .10 level: economical, efficient, effective, and ethical operations (OR = 1.87, p = .080) and checking the accuracy and reliability of accounting data (OR = 0.60, p = .090). None of the five standards predicted awareness. The results suggest that staff understanding of internal control is anchored in its purposes rather than in its procedural components, and that the relationship is not uniformly positive. The findings support objective-focused capacity building under the 2023 edition of the Internal Audit Manual for Local Government Units and point to the need for replication with model-fit diagnostics, larger samples, and longitudinal designs. Keywords: Internal control awareness, internal control objectives, local government units, logistic regression, public financial management