Moderating role of the oversight committee on ethical competence of employees and fraud: A case of compassion Uganda Frontline Church Partners (FCPS).

Abstract

The purpose of the study was to establish the moderating role of the oversight committee on the relationship between ethical competence of employees and fraud. The objectives of the study were to: establish the relationship between ethical competence of employees and fraud; examine relationship between the oversight committee and fraud; and determine relationship between ethical competence of employees, the oversight committee and fraud. This study was cross sectional and used a quantitative research approach. A sample of 113 respondents was selected and these involved employees including Project Directors, CDO – Health, CDO – SDR and CDO – HBP. The respondents also included Oversight Committee CPC members, for instance, CPC Chairperson, CPC Signatory, CPC Approvers and CPC Verifiers. The findings revealed a positive relationship between ethical competence (integrity) and a negative relationship between ethical competence (personal values) of employees and fraud. The study also found a negative relationship exists between the composition and competence of the oversight committee and fraud. Thus, personal values of employees; competence and composition of the oversight committee were significant predictors of fraud at Compassion FCPs. The study further revealed that the oversight committee moderates the relationship between ethical competence of employees and fraud, since at low level of oversight committee (OC), there is a higher level of fraud compared to high oversight committee (OC) that provides for lower levels of fraud. The study recommends that Compassion and the FCPs ensure that the personal values of employees are always upheld to avert incidences of fraud. Additionally, the competence and composition of the oversight committee should be boosted to ensure the oversight responsibilities adequately safeguard against fraud. The oversight committee CPC committee should have the competence and be duly composed in order to hold the employees accountable regarding personal values to prevent fraud. This could be completed through competency-based appointment of the oversight committee members and knowledge addition through fraud awareness trainings. Furthermore, Compassion and the FCPs ought to complete ethics trainings and outreach activities for both employees and members of the Oversight CPC committee on the benefits of upholding personal values in addition to safe measure for reporting unethical conduct and rewards for the employees with integrity and high personal values.