saint louis college

Beacon of Wisdom in the North

City of San Fernando, La Union
GRADUATE SCHOOL

PROPOSED THESIS TOPIC

Surname Given Name M.I.
Proponent TENEZA MAY ANGELICA M.
Acad. Program/
Master in Business Administration
Field(s) of Spec.
Proposed Title Effectiveness of Internal Control System in
DMMMSU-Sericulture Research and Development
Institute (SRDI)
Management Systems of DMMMSU-Sericulture
Research Title Research and Development Institute (DMMMS-
(as redirected by Panel) SRDI)

Background of the  Organizations nowadays are faced with greater

Study challenges than it was before. This is mainly due to
the rapid changes in the technology, economy and
other internal and external factors that affect the
organization. Due to these developments, some
risks may go unidentified which in turn may result
to larger losses. It is therefore a must for every
organization to put in place internal control systems
to continue its operations efficiently and effectively.
(A.D. Siayor, 2010)

 Internal controls systems are set of rules, policies

and procedures an organization implements to
provide reasonable assurance that: (a) its financial
reports are reliable, (b) its operations are effective
and efficient, and (c) its activities comply with laws
and regulations. (www.csus.edu.internalcontrol)

 World silk production has approximately doubled

during the last 30 years.

 In Asia, one of the most developed economies is that

of Japan. Silk industry is one of the leading sectors
for the economic development and industrialization
of Japan.

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  Korea, India and China are also leading in the
production of traditional silk. These countries
invested on technology and extension services to
farmers in order to give them long term support.

 The Philippines is basically an agricultural country.

Thus, it is also through agricultural progress
that it enables to create employment for its
people and lead to rural industrialization that is
sustainable over time. (C.N. de los Santos, 2002)

 The country is now looking forward to weaving of a

long-term strategy for improving silk production
that would help local producers.

 At present, silk production in Region 1 is

undertaken by Don Mariano Marcos Memorial State
University by virtue of Republic Act (R.A) 7359
which created DMMMSU-Sericulture Research and
Development Institute (DMMMSU-SRDI). (DMMMSU
Administrative Manual, 2009)

 But due to inefficiencies/ inadequacies of the

current internal controls of DMMMSU SRDI, it has
been incurring losses for CY 2014 and 2015
amounting to more or less P100M and P60M
respectively.

Literature Survey  Sericulture, or silk production, from the moth, has

a long and colorful history unknown to most
people. (http://www.insects.org/ced1/seric.html)

 The agricultural aspect of sericulture starts

moriculture or leaf production which could only be
attained through proper land preparation, nursery
and plantation establishments along with optimum
cultural management that includes fertilizer
application both organic and inorganic, irrigation,
weeding, pruning and the control of pests and
diseases.

Sericulture is an export industry that could provide

job, income, human resources development and

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 restoring environmental quality. (C.N. de los
Santos, 2002)

 Successful companies spend a great deal of time

and effort to create, distribute and manage
company information. Through stringent business
and ethical practices, company leaders ensure that
internal controls govern and define responsibilities.
These business systems define the operating
environment, risk-management strategies, policies
and procedures, communication plans and
performance monitoring. Without internal controls,
a business operates inefficiently, in an unreliable
manner and out of compliance with applicable laws
and regulations.

Internal controls ensure that authorized

transactions get executed, recorded, accessed and
analyzed. When a company operates without an
effective system of internal controls, employees
complete job tasks in an environment without the
assurance of personal safety. This leads to high
rates of employee dissatisfaction, absenteeism and
low rates of employee retention. Employers then
spend unnecessary time and effort recruiting,
interviewing, hiring and training new employees on
a regular basis.

The integrity of financial records and managerial

reports tends to be questioned by business
partners and stakeholders, such as investors. The
company’s reputation suffers when it experiences
non-compliance with laws, regulations and other
requirements occur and may even lead to legal
action.

By instituting a comprehensive set of policies and

procedures, a company can mitigate the problems
associated with past lack of internal control.
(http://smallbusiness.chron.com)

Research Problem  To determine the effectiveness of the current

internal control system adopted by DMMMSU-SRDI.

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Hypotheses / 1. What is the management systems profile of
Assumptions DMMMSU-SRDI along with the:
a. operations management;
b. human resource management;
c. financial management;
d. marketing management;

2. What is the level of effectiveness of the Internal

Control System in DMMMSU-SRDI along with
the:
a. operations management;
b. human resource management;
c. financial management;
d. marketing management;
e. Organization as a whole?

3. What are the strengths and weaknesses of the

current Internal Control System in DMMMSU-
SRDI?

4. What validated Handbook on Internal Control

for DMMMSU-SRDI can be proposed?

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Research Input Process Output
Paradig
m 1. The 1. Analysis of
management management
systems profile systems profile of
of DMMMSU- DMMMSU-SRDI
SRDI along with: along with:
a. operations a. operations
management; management;
b. human b. human resource
resource management;
management; c. financial
c. financial management;
management; d. marketing
d. marketing management;
management;
2. Analysis of the
2. The level of level of A Validated
effectiveness of effectiveness of the Handbook on
the Internal Internal Control Internal
Control System System in Control of the
in DMMMSU- DMMMSU-SRDI DMMMSU-
SRDI along with: along with: SRDI.
a. operations a. operations
management; management;
b. human b. human resource
resource management;
management; c. financial/
c. financial/ accounting
accounting management;
management; d. marketing
d. marketing management;
management; e. Organization as
e. Organization a whole.
as a whole;
3. Analysis of the
3. The strengths strengths and
and weaknesses weaknesses of the
of the current current Internal
Internal Control Control System in
System in DMMMSU-SRDI.
DMMMSU-SRDI;

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 Research __Quantitative __ Qualitative
Research Attributes Approach __Mixed
Research Descriptive
Method; Design
Respondents DMMMSU SRDI officials and
employees, community,
Farmers and other stakeholders
Data Needed The existing internal control of the
Institute which includes, but not
limited to the following:
1. Manual
2. Charts
3. Process flows

Research Internal Control Questionnaire,

Instrument(s) Survey,
Inquiry/ Interviews
Observation
Inspection

Statistical Tools Quota Sampling (mean)

Ethical Sources:
Considerations  http://www.insects.org/ced1/seric.html
 DMMMSU Administrative Manual
 History of DMMMSU-SRDI
 Brochure of DMMMSU-SRDI
 DMMMSU SRDI Financial Reports
 A.D. Siayor, 2010
 C.N. de los Santos, 2002
 www.csus.edu.internalcontrol
 (http://smallbusiness.chron.com)

Prepared by: ________________________ Date: ___________________

Proponent’ Signature

Endorsed for Approval/Acceptance: __________________________________

Date: _________ Signature over Printed Name of Professor
Thesis I

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