AN ANALYSIS OF INTERNAL CONTROL SYSTEMS AND INTERNAL AUDITING IN PUBLIC AND PHILANTHROPIC HOSPITALS

Abstract

Public and philanthropic hospitals in Brazil usually adopt poor financial management practices, especially those related to strategies and use of management tools. In order to be efficient, they should develop integrated information systems (IS), appropriate internal controls (IC) and competent internal auditing (IA) services. Previous research point out that these hospitals use IS that are uncapable of providing useful and reliable information, particularly because of poor IC and IA in these organizations. This paper reports on the results of six case studies in the city of Belo Horizonte aiming to (i) analyse the current situation of IC and IA in those hospitals, and to (ii) discuss the financial management problems and limitations caused by poor IC/IA. The results point out that the hospitals have been investing in new IS, but they have neglected needs of IC and IA improvements, as these services focus only on fiscal demands.