A STUDY ON THE FACTORS DETERMINING ADOPTION OF COMPUTERIZED ACCOUNTING SYSTEM IN PUBLIC HOSPITAL THE CASE STUDY OF THREE DISTRICT HOSPITALS INARUSHA REGION By Fortunata Alfredy S. A Dissertation Report Presented in Partial/Fulfillment of the Requirement for the award of Master’s Degree of Science in Accounting and Finance of Mzumbe University 2013 i CERTIFICATION We, the undersigned, certify that we have read and hereby recommend for acceptance by the Mzumbe University, a dissertation entitled The study on the Factors determining adoption of Computerized Accounting System in Public Hospital: The Case Study of three District Hospitals in Arusha region, in partial/fulfillment of the requirements for award of the Master degree of Science in Accounting and Finance of Mzumbe University _______________________ Major Supervisor ______________________ Internal Examiner Accepted for the Board of____________________ _____________________________________________________ DEAN/DIRECTOR, FACULTY/DICTERATE SCHOOL BOARD i DECLARATION I, Fortunata Alfredy Shirima, declare that this dissertation is my own original work and that it has not been presented to any other university for a similar or any other degree award. Signature ___________________________ Date________________________________ ii COPYRIGHT This dissertation is a copyright material protected under the Berne Convention, the Copyright Act 1999 and other international and national enactments, in that behalf, on intellectual property. It may not be reproduced by any means in full or in part, except for short extracts in fair dealings, for research or private study, critical scholarly review or discourse with an acknowledgement, without the written permission of Mzumbe University, on behalf of the author. © Fortunata Alfredy Shirima All right reserved iii ACKNOWLEDGEMENT Let me close my eyes and genuflect down to thank my Almighty God for His un mesurement and unquantifiable blessing awarded to me so that to accomplish this work. I am also allocating special sincere thanks to my Supervisor Dr. Nsubili Isaga for her unyielding support, and constructive advice through this study.Am also deeply indebted to the librarians of Mzumbe University for their contribution in offering different books for references and literature review which has been a great inducement as without their tremendous support, empirical study would not have been accomplished I am extending my humble gratitude to staff of public hospitals in Arusha region who given cooperation during the collection of data for this study. Their contribution is highly appreciated and I pray for them so that God may bless them abundantly. Last but not least, I thankfully my lovely Parents young sisters and Brothers who giving me the support to work hard when I am so tired also friends and my group mate who accompany me to finish this Dissertation. All remaining fault in this study are mine: iv DEDICATION This study is dedicated to my lovely Parents (Mr. and Mrs. Alfredy Shirima) and My Young Sisters (Mary and Elizabeth). Their serenity has enabled me to complete my studies successfully. v LIST OF ACRONOMYS AND ABBREVIATION GAAP - Generally Accepted Accounting Principles AIS - Accounting Information System IFAS - International Financial Accounting Principles CAS - Computerized accounting System ICT - Information Communication Technology IICD - International Institute of communication and Development vi ABSTRACT The purpose of this study was to determine factors for adoption of the computerized accounting system with the Tanzania Ministry of Health from the viewpoint of public hospitals in Arusha District. The specific objectives were to study the effect of the infrastructure, human resource, cost and administrative performance on the computerization of accounting system. Independent variables consisted of infrastructure, human resource, and cost and administration performance; while dependent variable was the adoption of computerized accounting system in Public Hospitals. The researcher used descriptive design which involves observed and described the behavior of a subject without influencing it in any way. Purposively sampling was used to select respondents and questionnaires were developed and distributed to all members who were involved in the study. Data was collected using questionnaire distributed to a sample of 100 respondents, and 82 of the questionnaire were returned. The data was analyzed through multiple regressions by using Statistical Package for Social Science (SPSS) version 20.0for windows. The study findings showed that Administration performance and cost affect the Adoption of the computerized Accounting System in Arusha district government Hospitals. The study recommends that policy makers need to work on strengthening the administration of the public hospitals in the Arusha district by making serious decisions to change the current accounting system to the computerized accounting system. And to make serious attempts to access the governmental financial support to ease the burden of cost of these hospitals in order to facilitate the process of adoption the computerized accounting system. There is a need of conducting more research on factors for adoption of computerized accounting system to the areas which were not included in this study in order to get more reality of the problem. vii TABLE OF CONTENTS CERTIFICATION .................................................................................................... i DECLARATION ..................................................................................................... ii COPYRIGHT ......................................................................................................... iii ACKNOWLEDGEMENT ...................................................................................... iv DEDICATION ........................................................................................................ v LIST OF ACRONOMYS AND ABBREVIATION .............................................. vi ABSTRACT .......................................................................................................... vii LIST OF TABLES ................................................................................................ xii LIST OF FIGURES .............................................................................................. xiii CHAPTER ONE .................................................................................................... 1 1.0 Introduction ....................................................................................................... 1 1.1 Background Information ................................................................................... 1 1.2 STATEMENT OF THE PROBLEM ................................................................ 3 1.3 Research Objectives .......................................................................................... 4 1.3.1General Objective ............................................................................................ 5 1.3.2Specific objective ............................................................................................ 5 1.4 Research Questions ........................................................................................... 5 1.5 The Significance of the Study ........................................................................... 5 1.6 Organization of the dissertation ........................................................................ 6 CHAPTER TWO ................................................................................................... 7 2.0 LITERATURE REVIEW .................................................................................. 7 2.1 Computerized accounting system ...................................................................... 7 viii 2.2 Computerized Accounting System Components ............................................... 7 2.3 Characteristics of Computerized Accounting .................................................. 13 2.5 Importance of computerized accounting System ............................................ 15 2.6 Factors affecting adoption of CAS .................................................................. 16 2.7 Empirical Literature Review ........................................................................... 17 2.7.1Factors affecting adoption of computerized accounting System ................... 17 2.7.1.1Infrastructure .............................................................................................. 18 2.7.1.2Human Resource ........................................................................................ 18 2.7.1.3Cost ............................................................................................................. 19 2.7.1.4 Administration Performance ..................................................................... 19 2.8 Conceptual framework .................................................................................... 20 2.9 Hypotheses ...................................................................................................... 21 CHAPTER THREE ............................................................................................ 22 3. 0 RESEARCH METHODOLOGY ................................................................... 22 3.1 Research design ............................................................................................... 22 3.2 Study area ........................................................................................................ 22 3.2.2 Human Resource: ......................................................................................... 23 3.2.3 Ownership and Financing: ............................................................................ 24 3.2.4 Operating theatre .......................................................................................... 24 3.2.7SELIANLUTHERANHOSPITAL (Council Designated Hospital) .............. 24 3.2.7.1. SELIAN HISTORY ................................................................................. 24 3.2.7.2CURRENT ECONOMICS ......................................................................... 26 3.3 Population ........................................................................................................ 26 3.4 Sample and Sampling procedure ..................................................................... 26 ix 3.5 Sample size ...................................................................................................... 26 3.6 Data collection Method ................................................................................... 27 3.6.1Questionnaire ................................................................................................. 27 3.6.2 Secondary/Documentary Data ...................................................................... 27 3.6.5 Procedural Definitions for the Variables of the Study ................................. 28 3.7 Validity and Reliability of the Technic ........................................................... 28 3.7.1. Tool Validity (Content Reliability) ............................................................. 28 3.8 Technic Stability .............................................................................................. 28 3.9 Data analysis .................................................................................................... 29 CHAPTER FOUR ............................................................................................... 30 4.0 PRESENTATION OF FINDINGS ................................................................. 30 4.1.0 DescriptiveAnalysis ...................................................................................... 30 4.1.1 Introduction .................................................................................................. 30 4.1.2Respondents’ gender ..................................................................................... 30 4.1.3 Respondents Education Level ...................................................................... 31 4.2 Reliability Analysis ......................................................................................... 31 4.3 Factor analysis ................................................................................................. 32 4.3.1 Infrastructure ................................................................................................ 32 4.3.2 Human resource ............................................................................................ 33 4.3.3 Cost ............................................................................................................... 34 4.3.5 Administration performance ......................................................................... 35 4.2.6 Adoption of computerized accounting system ............................................. 36 4.3.2 Data transformation ...................................................................................... 37 4.4.5. Descriptive Analysis for the items of the Computerized Accounting System Adoption (Dependent Variable) ............................................................................ 39 x 4.5. Inferential Statistical Analysis for Variables of the Study ............................. 39 4.6 Regression analysis result ............................................................................... 40 Conclusion regarding Findings ............................................................................. 42 CHAPTER FIVE ................................................................................................. 43 5.0 DISCUSSION OF FINDINGS ........................................................................ 43 5.1 Introduction ..................................................................................................... 43 5.2The Results of Testing Hypotheses and Answering the Study Questions ....... 43 5.2.1 Testing the first Hypothesis and Answering the First Question ................... 43 5.2.2Testing the Second Hypothesis and Answering the Second Question .......... 44 5.2.3 Testing the third Hypothesis and Answering the third Question ................. 44 5.2.4Testing the Fourth Hypothesis and Answering the Fourth Question ............ 45 CHAPTER SIX .................................................................................................... 46 SUMMARY, CONCLUSION AND POLICY IMPLECATIONS ....................... 46 6.0 Introduction ..................................................................................................... 46 6.1 Summary ......................................................................................................... 46 6.2 Conclusion ....................................................................................................... 47 6.3Recommendation .............................................................................................. 47 6.3.1Policy Makers in Tanzania ............................................................................ 47 6.3.2Administration of Public Hospital ................................................................. 48 6.4 Limitation of the study .................................................................................... 48 6.5Recommendations for further study ................................................................. 48 REFERENCE ........................................................................................................ 49 QUESTIONNAIRES ............................................................................................. 54 xi LIST OF TABLES Table 1 Determination Sample size from population of three public Hospitals in Arusha District ...................................................................................................... 27 Table 2 Gender ...................................................................................................... 30 Table 3 Education Level ........................................................................................ 31 Table 4: Age of respondents .................................................................................. 31 Table 5, Summary of Reliability Statistics ............................................................ 32 4.3 Factor analysis ................................................................................................. 32 Table 7: Infrastructure Rotated Component Matrix .............................................. 33 Table 8:Human Resource KMO and Bartlett's Test ............................................. 34 Table 9 : Human Resource Rotated Component Matrix ...................................... 34 Table 10 Cost KMO and Bartlett's Test .............................................................. 35 Table 11 – Cost Rotated Component Matrix ......................................................... 35 Table 12 Administration Performance KMO and Bartlett's Test .......................... 36 Table 13: Administration Performance Rotated Component Matrix .................... 36 Table 14: Adoption of CAS KMO and Bartlett's Test .......................................... 37 a Table 15 Adoption of CAS Component Matrix ................................................... 37 Table 16 Descriptive Analysis of the Independent Variables ............................... 38 Table 17: Correlations ........................................................................................... 40 Table 18 Results Summary .................................................................................... 41 xii LIST OF FIGURES Figure 1: Components of Computerized Accounting Syste….............................................8 Figure 2: Conceptual frame work………………………..…………………...…….……20 xiii CHAPTER ONE 1.0 Introduction This chapter contains the background information, statement of the problem, research objectives, and research questions, significance of the study and the organizations of the study. 1.1 Background Information Computerized accounting systems (or software) have replaced manual-based accounting in virtually all businesses and organizations, providing accountants, managers, employees and stakeholders’ access to vital accounting information at the touch of a button (Albright 2006). Computerized accounting systems automate the accounting process- improving efficiency and cutting down costs (Giliani 2004). A computerized accounting system performs the mechanical functions of a manual- based system, including adding items to ledger accounts, preparing schedules, updating account balances, making reports and others. Computerized accounting modules are designed to perform particular roles. For instance, a sales module automates all sales, order and purchase information, maintaining and updating all their relevant fields in the computerized accounting package. A production module is designed to track the flow of costs through a production or manufacturing, process(Albright, 2006). A financial management module maintains debt, interest rates, repayment schedules and shareholder information (Albright, 2006). As of July 2010, some of the most popular computerized accounting systems include QuickBooks, Peachtree, Simply Accounting, MAS, ACCPAC, Oracle and SAP. According to Carl et al (2008), in the book “Accounting,” computerized accounting has three main advantages over manual accounting: computerized systems automate and simplify the process of recordkeeping, allowing all transactions to be recorded in electronic format and posted automatically to ledger accounts (general and subsidiary); computerized accounting systems are typically more accurate, and make fewer mistakes than manual accounting systems; and computerized accounting 1 systems are real time and continuously update information on account balances and the status of accounts. It is generally believed that CAS can enhance the business performance and productivity (Illias,2007).Additionally, the implementation of CAS for the public organization enable the management to improve decision making, internal controls and financial information as well as enabling the financial reporting and statement being produced on a standardized format and timely basis to the stakeholders. As the volume of transaction increases, it may be very difficult to compile them manually (Ismailet al 2012). Computerized accounting system (CAS) adoption may be decisive factor for an organization to be successful and also to survive ( Hoshimu 2012).Unlike other information systems, Accounting was one of the first functional areas to benefit from computerization when computers were initially introduced to organizations (Doost, 1999). For the purpose of decision facilitation, computerized-accounting system (CAS) plays an important role in providing timely, accurate, and relevant accounting information to managers and other decision-makers. However, the adoption of computerized accounting system may challenge managers under a high task uncertainty situation. (Han et al 2012). Cashier job is to manage the work of monetary funds, notes, securities and out of a job. Specifically, the cashier is in accordance with relevant regulations and systems, cash handling unit, and related bank clearing accounts, custody of cash, securities, financial instruments such as seal and related work in general. With the development of technology, computers entered the field of accounting and management - implementation of computerized accounting. Cashier work corporate accounting is an important component of the computerized accounting work and is bound to include computerized cashier. The use of computerized accounting information systems has become an integral part of accounting systems worldwide. Most of the research and cases that examine issues related to choice and implementation of computerized accounting information systems have focused on developed nations. However, decisions relating to the choice and implementation of computerized accounting systems are very sensitive to cultural and environmental factors. Therefore, such decisions should be studied within the context of their own environments (King, 2006). Environmental factors 2 differ dramatically between developed and developing nations. In addition, within the context of developing nations, the cultural, political, and economic realities of each country are often very different. Therefore, it is better not to develop a standard prescription and make recommendations without first analyzing the specificities of each nation. Therefore, it is vital to improve our understanding of the process of choice and implementation of computerized accounting information systems in specific developing nations like Tanzania. 1.2 STATEMENT OF THE PROBLEM Business accountants must track endless details such as an operating budget, accounts payable and receivable, taxes and other expenses and compliance with governmental regulations, just to name a few. Even in a small business, manual accounting can quickly overwhelm one person, and a full-time accounting staff is expensive. For simplicity, cost reduction and peace of mind, consider switching to a computerized accounting system.(Baren, 2010) Accounting software has the ability to generate reports on demand--something that could take a team of humans hours or days. These reports can be customized to what the company is spending money on, such as rent, day-to-day operations, salaries and marketing. In addition, when used properly, this feature can assist the business in its budgeting needs, telling executives in a quick and easy to use format exactly where their money is going. Reports empower executives to make informed decisions, and having instant access to them and can only make success more likely (Gareson, 2006). For record-keeping and compliance with the law, businesses often keep financial records for years. It is extremely difficult to keep copies of paper records in multiple locations, and a catastrophic incident that results in the destruction of paper records can damage a business in many ways. With a computerized accounting solution, files and important financial information can be stored online or on off-site data cartridges--or both--giving a business the level of redundancy that it needs to recover from a catastrophe and ensuring compliance with all applicable data retention laws. Accounting can become expensive for businesses, as the level of work can result in the businesses needing to hire an accounting service on contract or 3 hire several full-time employees. Nevertheless, accounting software eliminates much of the manual work, which may allow you to reduce your full-time staff and lower your costs. Indeed, because so many tasks can be automated, a full-time accountant may not be necessary at all. The users believed that using CAS would help him or her better attain significant rewards and they feel comfortable in using CAS (Ismail, 2010). Social influence was one of the most important factors that affected users to use CAS to improve their workability and performance and it was found that most of the respondents agreed that their performance could be better every time by using CAS. (Chun, 2006) The major benefits of implementing a CAS are to increase business efficiency and to facilitate timely information (Burgess 1997). The advent of powerful, low cost microcomputers, together with user-friendly accounting software, has allowed a greater number of SMEs to implement IT in recent years (Bergeron, 1992). The need to facilitate financial management is another motivating factor for adopting accounting software (Holmes 1991; Gorton 1999). Moreover, some researchers have identified a link between the use of CAS and enhanced business performance (Gorton 1999; Smith1999; and Smith 2002). Nasrin, (2010) some attributes were identified to find out the influence of using computerized accounting software (CAS) by the users and their perceptions about this.Besides all these result from researchers still cashiers of the public Hospital use manual system they are operations are not computerized and the ministry of Health of Tanzania did not take any effort to change it from manual to computerized accounting system, hence high need of more research on factors hindering adoption of computerized accounting system in public Hospitals. It is against the above background that the researcher decided to undertake the study on factors determining the adoption of computerized accounting system to the public Hospital. 1.3 Research Objectives This part describes what the research was seeking to achieve or the questions which were answered at the end of the research project. 4 1.3.1General Objective The general objective of this study was to determine factors for adoption of computerized accounting system in public hospital 1.3.2Specific objective The specific objectives were:  To study the effect of the infrastructure on the adoption of the computerized of the accounting system  To study the effect of human resource on the adoption of the computerized of the accounting system  To study the effect of cost on the adoption of the computerized of the accounting system  To study the effect of administrative performance on the adoption of computerized accounting system 1.4 Research Questions The major questions addressed in this study that concerns the enquiry in determine Factors for adoption of Computerized Accounting System were: 1. Does the infrastructure have any effect on the adoption of computerization of the accounting system? 2. Do the human resources have any effect on the adoption of computerization of the accounting system? 3. Does the cost affect the adoption of computerization of the accounting system? 4. Does the administrative performance have an effect on the adoption of computerization of the accounting system? 1.5 The Significance of the Study This study might be important in many aspects as follows. First, it will broaden up the existing literatures in similar area of the study. Also it will encourage the 5 decision-makers to use the computerized accounting systems which will lead to a transition from scarcity of information to the state of abundance of information, as well as to the quality of appropriate information that give objectivity and integrity. The study might also help in having the possibility to implement a computerized accounting system in the Ministry of Health, which will save time, effort and cost. It will also help to correct the obstacles that hinder the computerization of the accounting system at the Ministry of Health in Arusha District. The study also may help to fulfill researcher master’s study. 1.6 Organization of the dissertation This dissertation is organized into a series of chapters and sections intended to provide all information needed by a reader to understand the conclusions of research work. The first chapter introduces the problem to the readers and it contains the following sections; Introduction of the chapter, background information, statement of the problem, the objectives of the research, the research questions, the significance of the study and organization of the study. Chapter two involves putting the work into context and showing related methods in solving their problems. . In the third chapter, the researcher used both primary and secondary methods of collecting data; the researcher used only questionnaires, while in collecting. In chapter four, the researcher presents findings in which data was analyzed by the use of multiple regression technique using a Statistical Package for Social Science (SPSS) version 20.0 for windows. Chapter five shows the discussion of the findings while chapter six contains the conclusion and recommendation. 6 CHAPTER TWO 2.0 LITERATURE REVIEW This chapter has three parts which are theoretical literature review, empirical literature review and conceptual framework. 2.1 Computerized accounting system Marivic (2009), described a computerized accounting system as a method or scheme by which financial information on business transactions are recorded, organized, summarized, analyzed, interpreted and communicated to stakeholders through the use of computers and computer based systems such as accounting packages. He emphasized that it’s a mechanized process of facilitating financial information inflows as well as the automation of accounting tasks such as database recording and report generation. Marivic adds that, keeping accurate accounting records is a vital part of any organization. 2.2 Computerized Accounting System Components A good computerized accounting system (CAS) has a clean, easy-to-use interface. From this interface, the user should be able to enter data, export data into other formats, and perform data validation operations. On the back end, a database drives CAS, responding to queries about the information stored therein. A consultant should be able to install the CAS. While the user doesn't need a large number of IT staff to install the computerized accounting system and get started, it helps if it is needed to troubleshoot operations or need help in performing a specific function. CAS should have elements including: Accounts Payable that allows the user to manage invoices and bills that you must pay, Accounts Receivable that allows the user to manage payments, billing, and income, Payroll that handles employee payroll within the accounting system. Benefits Management that allows for employee budget management, accrued vacation time reporting, and other budget reporting, budgeting that lets the user to create and manage a budget. Assets that lets the user to manage fixed and fluid assets, calculate depreciation, and perform other asset management, 7 Reporting that integrates data with existing reporting standards, so that the user can comply with regulations that affect the business, Project Reporting: Lets the user manage the assets and workflow for multiple projects at one time, Supply Chain Management: Allows the user to track inventory, suppliers, goods pricing, and other 1 supply side services. Figure 1: Components of Computerized Accounting System According to Albright (2007) Components of Computerized accounting System 1 www.resgroup.com/components-computerized-accou... 8 The above diagram shows the Components of a Computerized Accounting System from diagram; it is evident that sales module receives order data from customers and maintains accounts receivable information. The purchasing and inventory management module provides purchase order data to vendors. Vendors are those who supply specific products to a company. The purchasing and inventory management module maintains accounts payable and inventory information. The human resources module maintains data about employees; including hours worked and wage rates. It is used for preparing payroll and payroll tax information, The production module tracks the flow of costs through the manufacturing process, The asset management module identifies long-term asset costs, their expected useful lives, and where these assets are located in the company. The financial management module keeps track of debt, repayment schedules, interest rates, and shareholder information. The general ledger financial reporting module provides information for use by external stakeholders, including shareholders and government regulators. 2.3 Characteristics of Computerized Accounting Computerized accounting system is designed to automate and integrate all the business operations, such as sales, finance, purchase, inventory and manufacturing. Computerized accounting system is characterized by accurate, and up-to-date business information is literally at the fingertips. The Computerized accounting system is combined with enhanced Management Information System (MIS), Multi-lingual and Data organization capabilities to help the company simplify all the business processes easily and cost- effectively. According to Chun (2006), Tan (2006) and Linlin (2001), 13 computerized accounting information processing is characterized by computer- calculation tool, code-based data processing, high speed, and high precision. Computerized accounting system is based on computer instead of artificial manual accounting to record and process the data. It uses the original data coding system so as to shorten the length of data items for the purpose of reducing data storage space, thereby enhancing the accounting data processing speed and accuracy. Information processing is still a combination of computer and artificial Computer data processing. Realization of computerized accounting system, the companies can easily deal with the financial data and business process specifications, to avoid the traditional accounting period due to human factors in the data processing of non- uniform and does not correspond to the actual work to reduce the ambiguity and subjective standard uncertainty artificially enhance the objectivity of accounting and comparability of accounting information to facilitate the business processes of financial and business control . Realization of computerized accounting system to the greatest possible refinement of the whole process of accounting for each part of the frame of reference and assessment standards, accounting personnel and the work can be strictly controlled on one hand and achieves an effective real-time monitoring on the other. Computerized accounting manual is not only in line with the basic requirements, but also has its own unique characteristics, and it vigorously promotes the process of computerized accounting. It can further strengthen the internal financial management and financial monitoring, and improves efficiency and reduce financial risks. Computerized accounting system can also promote the management be used to make rapid updating of computer software technology and the popularization and development of network technology. most of computerized accounting system requirements is to achieve the computerization of accounting system work in the more standardized, more efficient, stronger and secure accounting system which lead to better services for the management decision-making to achieve the benefits of computerized accounting principles to eliminate all the negative impact of the development of computerized accounting factors. 14 2.5 Importance of computerized accounting System According to McBride (2000), computerized packages can quickly generate all types of reports needed by management, for instance budget analysis and variance analysis. Data processing and analysis are faster and more accurate and meets the managers’ need for accurate and timely information for decision making. Wood (1999) consented to the speed with which accounting is done and further added that a computerized accounting system can retrieve balance sheets, income statement or other accounting reports at any moment. He further consented that computerized accounting system allow managers to easily identify and solve problems instantly. Indira (2008) pronounced the improvement in business performance as a result of computerization of the accounting systems as it is a highly integrated adoption that transforms the business processes with the performance enhancing features which encompass accounting, inventory control, reporting and statutory processes. Indira (2008) suggests that, CAS helps the company to access information faster and takes quicker decisions as it also enhances communication. McBride (2000) stated that managers cannot easily satisfy statutory and donor reporting requirements such as profit and loss account, balance sheet and customized reporting without using computerized accounting systems. With the system in place, this can be done quickly and with less effort. Computerized accounting systems ease auditing and have better access to required information such as cheques numbers, payments, and other transactions which help to reduce the time needed to provide this type of information and documentation during auditing. According to Carol (2002), it is easy to do accounting functions using computerized accounting systems. Posting transactions to the ledger, the principle of double entry can largely be automated when done through the use of computerized accounting system. In the hospital's daily operation and management work, accounting management is the core, however, with the development of the times, the hospital cannot meet the traditional accounting management and social development has been the trend, even for accounting mismanagement, and thus affecting the normal operation of the hospital, while if computerized accounting system is established, it is the advantage of using a computer network, using a computer to achieve the hospital's financial management and record relevant financial data not only convenient, but less error-prone. Hospital 15 computerized accounting system to establish the network, not only changed the hospital the previous artificial financial management, while also improving the management efficiency (Indira, 2008). Thus, the implementation of computerized accounting network system, not only promotes the development of hospitals, but also modernizes the Hospital Management. According to Changkun (2004), in his book Development of Computerized; he said that: the hospital's computerized accounting system, establishment and implementation of the network, not only changed the accounting management of the hospital in the past, but also conforms to the trend of the times. In addition, the hospital's computerized accounting system, establishment and implementation of network, to some extent improve the hospital's management level and market competitiveness of the hospital so the hospital's leadership must correctly understand the advantages of computerized accounting network system, thus giving its establishment and implementation a strong support. Western countries are convinced that the society which switched to computerized accounting system will result in economic and social benefits (Audenhove 2008). The author quoting Organization for Economic Cooperation and Development, notes that information infrastructures are expected to stimulate economic growth, increase productivity, create jobs, and improve on the quality of life (Heeks, 2007). Heeks (2007) further observed that there is a big difference between computerized implementation and use between developed and developing countries. However, Westrup (2008) observed that similarities can also be expected. These similarities include funds which are never sufficient, bureaucracy and user needs. The difference is how problems are addressed in different countries. 2.6 Factors affecting adoption of CAS Using a computerized accounting system comes with its own set of problems, such as the need to protect against data loss through power failure or viruses, and the danger of hackers stealing data. Computer fraud is also a concern, and the user needs to instigate a system of controls for who has access to the information, particularly customer information. If there is a security breach and data is stolen, management can be held personally liable for the loss of data. The user also needs to make sure 16 that the data has been correctly entered into the system, as a mistake in data entry can throw off a whole set of data ( Magolfu 2013) According to Chweloset al. (2001) showed the following problems which are associated with CAS. Firstly computerized accounting system is not fully computerized in strengthening financial management functions. Most units of the Ministry of computerized accounting is used to replace the manual, just to alleviate the burden on the accounting staff only paid attention to reimbursement function, ignore the management functions. Only in the software, material accounting, payroll accounting, fixed asset accounting and other functions on the stronger, and for managerial cost accounting functions, financial index analysis system, as well as the capital supply and demand forecasting module no juice, dysfunction, there is no full Computerized Accounting for strengthening financial management functions. Second, Computerized accounting system is poor in data privacy, security, corporate financial data is an absolute secret, but there is no serious consideration to several software vendors of data confidentiality. Since many units of accounting components of computerized files do not understand the lack of management experience, resulting in the disk storage of accounting records and accounting information cannot be timely filed, have been archived content is not complete. Failure to make timely development of appropriate computerized accounting archivist staff responsibilities, resulting in the accounting file is vandalism, and even units of accounting information disclosure. Accounting personnel level of professional quality computer operations to be improved 2.7 Empirical Literature Review Computerize accounting system is becoming popular among organizations now days across the world many surveys have been made to estimates the growth of computerized accounting system in various countries. 2.7.1Factors affecting adoption of computerized accounting System There are many factors affecting adoption of computerized accounting system but the researcher summarizes the factors as follows. 17 2.7.1.1Infrastructure Malik and Khan (2009) were conducted a study which they aimed at understanding the Implementation of an Electronic Hospital Information system in a developing country: A case study from Pakistan the result showed that the common challenges may include poor electricity supply, lack of computer infrastructure, insufficient and unsustainable funding and inadequate education. Ismail et al.,(2010) conducted a study which they aimed at the implementation of Hospital Information System(HIS) in tertiary hospital in Malaysia they explore the factors hinder implementation as lack of commitment, in ability to provide extensive information technology infrastructure, difficult to obtain a suitable software and hardware and lack of skilled IT personnel. Elawi, (2008) was conducted a study which he aimed at Obstacles of computerizing the accounting system applied in the Ministry of Education," took some of the obstacles that prevent the possibility of applying a computerized accounting system in the Ministry of Education such as infrastructure and human resource. The results of this study showed that these variables are from the obstacles that prevent the possibility of applying the computerized accounting system in the Ministry of Education. 2.7.1.2Human Resource Human resource is the main element that can rely on the efficiency and effectiveness of operating the system, and they who use the outputs in managing the organized matters, therefore the human element for the information system the main axis on which it will success or fail, human resource is required to fill multiple functions in each of the departments of accounting and computer centers, and the scientific and practical qualifications, experiences, technical skills and training are considered the most important specifications that must be available in the staff (Stephen, 1989). In Tanzania, Ali (2011) conducted a study which he aimed at road toward a paperless Hospital: the Arusha Lutheran Medical Centre being case study he explored the challenge toward the paperless as shortage of skilled personnel, while (Al-Taweel, 2001) pointed out that there is a lack of efficiency in the accountants in the fields of using, designing, developing accounting systems and information technology. So this 18 study is presented to show the importance of human resource and its effect on the adoption of the computerized accounting system in public hospital 2.7.1.3Cost Cost can be defined generally as "any optional sacrifice with things, properties, material or moral rights that should have an economic value, in order to obtain the present or future benefit which it should not be less than the value at the time of completing sacrifice in the process of the value of sacrifice (Matarneh, 2003). Cost element must also be taken into account when designing the accounting system so as to increase the expected benefits of the system than its preparation and implementation cost (Al- Sabagh, 2000). Therefore, the equipment costs in accounting include equipment delivery, office equipment, machinery and equipment, such asset includes purchase price, the burden of transportation and handling, insurance on the equipment during transport, the cost of special bases for them, the costs of assembly, installation and costs of testing startup (Kiso, 2009). Thus, the costs include all expenses incurred by the hospital in the acquisition of equipment and preparing it for use. 2.7.1.4 Administration Performance Hassan (2001) showed that the concept of performance refers to the degree of achieving and completing individual tasks, that reflects how it achieves or satisfies job requirements. The concept of management (organizing) and its objectives, is a "group of individuals combine their efforts to achieve a particular objective". The common purpose which the system seeks for is called (Objective) and of course it is not for organizations have the same objectives, but some aimed at maintaining production and profits, and others aimed at providing humanitarian services, such as governmental hospitals which its basic aim delivering service and health care. The administration task focuses on what is being managed, which is the organization itself, and the Director essentially performs four main functions in the organization, which are: (Gareson, 2006): According to Breen et al (2003) they wrote on factors affecting small Business to use computerized accounting system, result showed CAS 19 non-users referred to two major reasons for not using the accounting software, one an innovation factor, and the other a characteristic of the organizational decision maker. The first reason (innovation factor) was that a CAS was not needed and would not add value to the business. The second reason (characteristic of the organizational decision maker) was that the owner manager lacked IT skills and knowledge 2.8 Conceptual framework A conceptual framework is a set of broad ideas and principles taken from relevant field of inquiry and used to structure subsequent presentation (Reichel and Raney, 1987). In this study, dependent variable is adoption of CAS in public hospitals while independent variables are factors which affect adoption CAS in public hospitals. The interrelationship between and among these variables are presented diagrammatically for supplementary understanding of the factors affecting applicability of CAS in public hospitals. Figure 2: Conceptual frame work Adoption of computerized accounting System in Public Hospital 20 Infrastructure Human Resource Cost Administrative Performance 2.9 Hypotheses From the above literature review the researcher developed the following Hypothesis; H1: There is a statistically significant relationship between infrastructure and computerization of the accounting system. H2: There is a statistically significant relationship between human resource and computerization of the accounting system. H3: There is a statistically significant relationship between cost and computerization of the accounting system. H4: There is a statistically significant relationship between administrative performance and Computerization of the accounting system. 21 CHAPTER THREE 3. 0 RESEARCH METHODOLOGY This chapter describes various methods that were applied in conducting the proposed research topic. It describes the research design, sampling techniques, and data collection methods, types of data collected, and data analysis techniques to be employed during the whole study. 3.1 Research design Kothari (2004), define research design as the overall plan of the research. Is referred to as a blue print for the collection, measurement and analysis of data , Descriptive research design is a scientific method which involves observing and describing the behavior of a subject without influencing it in any way.Shuttleworth (2008). The researchers use this method to obtain a general overview of the subject. 3.2 Study area The study was conducted at public Hospitals in Arusha District Tanzania. The location was selected purposively as a study location because is among of the public Institutions which has no computerized accounting system.In order for the research to fulfill the objective of the study is to assess the factors which hinder adoption of computerized accounting system. The area of the study includes Mount Meru Hospital, Selian Hospital and Kaloleni Hospital here and under is short brief of Mount Meru Hospital and Seliani Hospital. 3.2.1Mount Meru Hospital The history of Mt. Meru Hospital goes back to the First World War. Narrated history has it that it was initially established as a camp for treating casualties of that war. Over the years it gradually evolved into a hospital. The earliest sign available is a placard on the administrative building which states that the building was bequest by one Alfred de Rothschild and laid by one Lady Rees on 11th November 1926!At present the hospital has a bed capacity of 450 beds. There are several clinical departments which include:- 22 . Internal Medicine . Radiology . Surgical . Pathology Obsetetrics and Gynaecology . Mental Health . Peadiatrics . Anaesthesia . Ophthalmology . Physiotherapy . Dentistry . Pharmancy According to the Healthcare delivery system of Tanzania, this hospital is a 2nd level referral hospital. It serves 18 other smaller district hospitals scattered all over the region 3.2.2 Human Resource: There are 4 specialist doctors; 1 Internist, 1 Surgeon, 1 Obstetrician/ Gynaecologist, 1 Public Health Specialist and 1 Clinical Psychologist. There are also 9 Medical Officers (or GPs) and 15 Assistant Medical Officers. 3 of the GPs are currently undergoing postgraduate training and are in different stages of completion. 2 of them will graduate in Paediatrics after one year from now and the other one will graduate in Obstetrics and Gynaecology. There are 48 Nursing Officers, 57 Nurse/Midwives, 8 Trained Nurses, 3 Public Health Nurses and about 120 Nursing Assistants or Nursing Attendants. There are also several supporting staff. In total there are 430 staff employed. There are also several supporting staff. In total there are 430 staff employed. 2 qualified Pharmacists assisted by 1 Pharmaceutical Technician and 3 Pharmacy attendants manage the hospital pharmacy that is reasonably well stocked. For the past 8 years now, this hospital has served as the WHO training station for Anglophone African Countries, for the IMCI (Integrated Management of Childhood Illnesses) strategy. It is also expected that it will, beginning this year, be a hospital for training Medical Students who are in their clinical years for the University of Dar es Salaam, as well as receive Intern doctors. It has once received nursing students from the University of Bergen as an exchange programme, but due to financial 23 constraints, this has not continued. We continue however to receive students from the US who are in their primed studies. 3.2.3 Ownership and Financing: The hospital is a public institution, i.e. fully owned by the government. Major financing comes from the central government, from its annual budget. Other sources of financing include a cost sharing scheme, the National Health Insurance Fund, and a scheme known as the Basket Fund. The latter is a 35% allocation from the Municipal Council since this hospital also serves as the Council Hospital for this Municipality. The central government pays for all staff emoluments. 3.2.4 Operating theatre The Hospital has three operating theatres, the major, an obstetrical theatre and an ophthalmic theatre. Most surgical conditions can be dealt with while most common obstetrical and gynaecological conditions can also be operated upon. In the year 2002, a total of 2588 patients were operated upon. Of these 85 were major general surgery conditions while 1577 were obstetrical and gynaecological conditions. 926 minor operations were done. 3.2.7SELIANLUTHERANHOSPITAL (Council Designated Hospital) 3.2.7.1. SELIAN HISTORY Selian Lutheran Hospital is a semi-rural hospital of the Evangelical Lutheran Church of Tanzania - Diocese in Arusha Region, located in the village of Ngaramtoni within the Arumeru District of the Arusha Region. The health work of the hospital was begun as a dispensary in the 1950's and has grown from a single building and with beds into a 120 bed hospital offering outpatient and inpatient services including medicine, pediatrics, general surgery, and obstetrics and gynecology. Selian Lutheran Hospital serves an immediate catchment area consisting mainly of a government ward with a population of approximately 500,000 people. The hospital serves as a referral center for much of urban Arusha and more rural areas extending south to Orkesumet and west to Loliondo.The area served by Selian Lutheran Hospital is inhabited by people of the Maasai and Waarusha tribes. Most are small scale land holders who are subsistence farmers. Foodstuffs as well as coffee are the major 24 crops. The climate is temperate year around, rainfall is usually plentiful, and the elevation is approximately 1,600 meters. Mt. Meru from the southwest and Maasai farmland, part of Selian's catchment area. Most patients come to the hospital with infectious and tropical diseases or with surgical emergencies. Malaria, AIDS, TB and pneumonia account for a high percentage of medical admissions. Trauma and acute abdominal surgery are the majority of surgical admissions. Arusha Town, rapidly expanding, has a population of almost one million. 25 3.2.7.2CURRENT ECONOMICS While Selian Lutheran Hospital has been developing its reputation as the premier center for quality care in northern Tanzania, it is challenged by dramatic economic realities: Tanzania is one of the 10 poorest countries in the world. People have little and even the inexpensive medical care delivered by Selian is often unaffordable. Tanzanian government expenditure on health is around $2 per capita annually. With the opening of The Arusha Lutheran Medical Centre in December 2008, the Diocese entered an agreement with the Ministry of Health to transfer Selian to the government system. As of November 2012, Selian is one of three District Hospitals in Arusha. 3.3 Population Kombo (2006), define Population is a group of individuals, objects or items from which sample are taken for measurement. 3.4 Sample and Sampling procedure A sample is a finite part of a statistical population whose properties are studied to gain information about the whole (Webster, 1985). When dealing with people, it can be defined as a set of respondents (people) selected from a larger population for the purpose of a survey. According to this study, the information was gathered using Descriptive study in three public Hospital in Arusha District the researcher distribute the questionnaire to the staff of the public Hospital starting with Accountant, cashier. 3.5 Sample size The researcher used Judgmental or Purposive sampling, where by the researcher chooses the sample based on Accountant and Cashiers. This method is used primarily when there are limited numbers of people that have expertise in the area being researched. 26 Table 1.1 Determination Sample size from population of three public Hospitals in Arusha District Hospital Population(N) Sample size (S) % Mount Meru 38 23 61% Selian Hospital 60 36 60% Kaloleni 50 23 47% Key N is population size who are found in Hospital at that day N=148 S is sample size. 3.6 Data collection Method Both Primary and Secondary sources of data were used in obtaining data. Primary data is collected firsthand by a researcher through questionnaires, while the secondary data is readily available and is available to the public through publications, journals and newspapers. 3.6.1Questionnaire This is the main instrument for collecting data from respondent, structured questionnaire was distributed by hand to the staffs in the department selected so that they reach the responsible individual and hence secure the response from the selected sample. The set of questionnaire contained 27 questions, 1-5 were used to measure the infrastructure while 6-11 were used to measure human resource and 12-16 were measured cost, while administration performance was measured in paragraphs 17-21, and finally the dependent variable related to the adoption of the computerized accounting system was measured in paragraphs 22-27. 3.6.2 Secondary/Documentary Data Sarah (2012) Documentary data is any information or evidence or official record obtained from a piece of written, printed or electronic material. Example of documentary data includes letter, memos, diaries, autobiographies, internal reports, newspapers, magazines, and photographs etc. The researcherreading information data 27 from different books, journals and articles, Non participatory observation method was used to capture the factors hinder implementation of computerized accounting system in public Hospital under this method the researcher collected information through non- participation in generate areas. 3.6.5 Procedural Definitions for the Variables of the Study 1. Infrastructure: includes networking, computer hardware and storage media required for collection, storage, processing and transfer of data and information. 2. Human Resource: Is the person who is responsible for the operation of the system and who performs all tasks related to the system. 3. Cost: Giving up things, properties or material and moral rights that have great value. 4. Administration Performance: The degree of achieving and completing tasks, consisting of the core functions of management. 5. Computerized Accounting: The integration of manual accounting science and its adoption to computer by balancing the executed tasks manually with the computer activities. 3.7 Validity and Reliability of the Technic 3.7.1. Tool Validity (Content Reliability) The questionnaire was displayed on number of specialists and experts in this field to arbitration and put their observations; the questionnaire was modified based on these observations to reach its final form. 3.8 Technic Stability To verify the stability of the tool, a Cronbach's Alpha equation was used to measure the degree of credibility and stability in the answers of the population of the study on the questionnaire's questions, as this test depends on the extent of the internal stability and the degree of reliability of the questionnaire's phrases, Alpha value of the variables of the study was as follows: Infrastructure was (0.721), while the alpha for the human resource was (0,711), the value of alpha for the cost was (0,658) while 28 the administration performance was (0.777) while the dependent variable was (0.723). These ratios indicate a high level of tool measurement stability 3.9 Data analysis The researcher used the descriptive method to describe the study variables. Linear regression analysis was used to test hypothesized hypotheses.This was done using SPSS. 29 CHAPTER FOUR 4.0 PRESENTATION OF FINDINGS The study present findings of the study, first presents preliminary analysis such as respondent gender and education level. Scale analysis, Factor analysis, and descriptive statistical analysis. There after the chapter presents the results regarding the relationship between the independent and dependent variables for the items of the computerized accounting system adoption measure in Arusha District government hospitals. 4.1.0 Descriptive Analysis 4.1.1 Introduction Out of the 100 distributed questionnaires a total of 90 or response rate of 90% was returned. The strategy was to distribute the questionnaire to different staffs then after they had competed answering them they submit it to the head of department. The researcher after a certain period (two or three days) collects from the head of the department. After removing the invalid questionnaires, 82 or 82% questionnaires were used in the analytical stage. 4.1.2Respondents’ gender Among respondents 23 (28%) were males and 59(72%) were females. The weighting of this sample does not equate to an equal distribution between males and females. This indicates that there is high possibility of an effect from gender bias to occur as it can be seen in table 2 Table 2: Gender Frequency Percent Valid Percent Cumulative Percent Valid Male 23 28 28 28 Female 59 72 72 100 Total 82 100 100 30 4.1.3 Respondents Education Level While most of these respondents 41(50%) being degree Holder, the rest 20(24%) were diploma and 21(26%) certificate in which the 50% having Knowledge of accountant, 24% were assistant accountant and the remaining were cashiers. This show that the respondents were knowledge about the subject. Table 3: Education Level Current Position in the Publi Hospital Total Cashiers Assistant accountant Accountants Certificate 5 5 10 20 Diploma 3 4 14 21 Degree 5 7 29 41 Total 13 16 53 82 Age of respondents In term of respondents ages some of them were under 25(30%), 26-35 (35%), 36- 45(20%) 46-55(10%) and above 55 (5%). From the table below, the results show that most respondents were youths. Table 4: Age of respondents Age of the respondent (years) Frequency Percentage Under 25 25 30 26 – 35 29 35 36 – 45 16 20 46 – 55 8 10 Above 55 4 5 Total 82 100 Source: Field data (2013) 4.2 Reliability Analysis After all the data have been put in SPSS sheet manually by the researcher, the next step was to test for reliability. Table 5 summarizes the reliability analysis for each Variable and Adoption of CAS. Each variable shows above 0.7 According to SeifObed. et al (2011), It seems that this study provides more reliable instruments which is more than 0.7. Infrastructure (0.721), Human resource (0.711), Cost(0.743), Administration performance (0.777), Adoption of CAS (0.723). Therefore, the study 31 may be used as a reference material for decision makers to switch from manual accounting system to CAS because there is a reliable source of information on which they might base their decision. Table 5:Summary of Reliability Statistics VARIABLES Cronbach’s Alpha No of items INFRASTRUCTURE 0.721 5 HUMAN RESOURCE 0.711 6 COST 0.743 5 ADMINISTRATION 0.777 5 PERFOMANCE ADOPTION OF CAS 0.723 6 Source: Field data (2013) 4.3 Factor analysis The questionnaire contains a set of twenty seven (27) questions which have a variety of items. To reduce the items of the same variables, the researcher used Data reduction process within SPSS known as Factor analysis (FA). According to Swisher (2004) ‘One advantage of FA is that the researcher can specify the simple structure that he or she is looking for and obtain feedback on the extent to which this structure is supported by the data’ 4.3.1 Infrastructure Three items were used to measure infrastructure. The Factor Analysis results indicate its general validity, as the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is 0.592 and Bartlett’s Test of Sphericity is significant (0.0001). Factor Analysis was then applied to summarize the factors that measure infrastructure. The results from the principal component analysis are displayed in table 7. 32 Table 6: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling 0.592 Adequacy. Approx. Chi-Square 129.964 Bartlett's Test of Sphericity Df 10 Sig. 0.000 Source: Field data (2013) Table 7: Infrastructure Rotated Component Matrix Rotated Component Matrixa Component 1 2 Hospitals have enough data base that contribute to implementation of the .879 -.094 computerised accounting system Hospital have programmes and networks of modern communications .863 .156 Hospitals have enough computers that contribute to the implementation of .030 .992 computerised accounting system Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations. As shown in Table 7, Factor Analysis of the items suggests a two-factor solution which accounts for 62.0% of the variance. 4.3.2 Human resource Six items were used to measure Human resource. The Factor Analysis results indicate its general validity, as the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is .653 and Bartlett’s Test of Sphericity is significant (0.0001). Factor Analysis was then applied to summarize the factors that measure infrastructure. The results from the principal component analysis are displayed in table 9. 33 Table 8:Human Resource KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .653 Approx. Chi-Square 52.753 Bartlett's Test of Sphericity Df 15 Sig. .000 Source: Field data (2013) Table 9 : Human Resource Rotated Component Matrix Component 1 2 The staff that are working in the current system have the ability to use computer .806 -.031 There is a fair criteria to upgrade the employees, promotions and giving them .738 .101 financial and moral incentives The staff that are working in current system have sufficient experience that .428 .116 keep pace with the computerized accounting system The hospitals are seeking for hiring the right staff having IT knowledge in .254 .760 place The hospitals provide special training programs for human resource using -.215 .758 computerized accounting system The hospital is seeking to achieve perfection through holding training courses .422 .645 for the staff in financial affairs Source: Field data (2013) Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations. As shown inTable 9, Factor Analysis of the items suggests a two-factor solution which accounts for 62.27% of the variance. 4.3.3 Cost Five items were used to measure cost. The Factor Analysis results indicate its general validity, as the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is 0.576 and Bartlett’s Test of Sphericity is significant (0.0001). Factor Analysis was then applied to summarize the factors that measure infrastructure. The results from the principal component analysis are displayed in table 11. 34 Table 10:Cost KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .576 Approx. Chi-Square 42.598 Bartlett's Test of Sphericity Df 10 Sig. .000 Source: Field data (2013) Table 11 – Cost Rotated Component Matrix Component 1 2 The expected benefit obtained from applying a computerized accounting .837 -.083 system is greater than the cost of obtaining it The hospitals can get a governmental support to convert the current .819 .033 accounting system to a computerized accounting system There are enough financial allocations for the processing of building a -.044 .796 modern network to receive the computerized accounting system There are enough financial allocations for the analysis and training of staff on .441 .648 the computerized accounting system The administration performance in the computerized accounting system asses .409 -.591 deviation in the performance of individual better than the current system Source: Field data (2013) Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations. As shown in Table 11, Factor Analysis of the items suggests a two-factor solution which accounts for 60.92% of the variance. 4.3.5 Administration performance Five items were used to measure administration performance. The Factor Analysis results indicate its general validity, as the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is 0.586 and Bartlett’s Test of Sphericity is significant (0.0001). Factor Analysis was then applied to summarize the factors that measure infrastructure. The results from the principal component analysis are displayed in table 13. 35 Table 12 Administration Performance KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .586 Approx. Chi-Square 55.598 Bartlett's Test of Sphericity Df 10 Sig. .000 Source: Field data (2013) Table 13: Administration Performance Rotated Component Matrix Component 1 The computerised accounting system defines responsibilities on the activities of .823 sections within the hospital better than the current system Admnistration can assses daily activities in a computerised accounting system better .766 than the current accounting system Admnistration can measure the perfomance of its staff in the light of a computerised .704 accounting system better than the current system The admistrationperfomance in the computerised accounting system asses deviation in .678 the perfomance of individual better than the current system The perfomance of doctors in dealing with auditors in light of a computerised .668 accounting system is better than the current system Extraction Method: Principal Component Analysis. a. 1 components extracted. As shown in Table 13, Factor Analysis of the items suggests one factor solution which accounts for 70.43% of the variance. 4.2.6 Adoption of computerized accounting system Five items were used to measure adoption of CAS. The Factor Analysis results indicate its general validity, as the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is 0.713 and Bartlett’s Test of Sphericity is significant (0.0001). Factor Analysis was then applied to summarize the factors that measure infrastructure. The results from the principal component analysis are displayed in table 15. 36 Table 14:Adoption of CAS KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .713 Approx. Chi-Square 35.827 Bartlett's Test of Df 10 Sphericity Sig. .000 a Table 15:Adoption of CAS Component Matrix a Component Matrix Component 1 The computerized accounting system is more flexible than the current system .767 The computerized accounting system provides easy reference and access to the .763 information The computerized accounting system is characterized by easiness of usage more .717 the conventional system The computerize accounting system is characterized by simplicity more than the .405 conventional system The computerized accounting system provides enough information to internal and .396 external control Source: Field data (2013) Extraction Method: Principal Component Analysis. a. 1 component extracted. As shown in Table 15, Factor Analysis of the items suggests a two-factor solution which accounts for 61.39% of the variance. 4.3.2 Data transformation It should be noted that the aforementioned general purpose of Factor Analysis is to find a way to condense the information contained in a number of original items into a smaller set of new factors with a minimal loss of information (Hair et al. 2006). As mentioned earlier, all items in the research instrument were subjected to the Factor Analysis procedure, in order to determine the items which should be used to create the summated scales. In this study, the average score of the factors was used for further analysis. Table 16 shows the overall mean values and standard deviation of the factors. 37 Table 16 Descriptive Analysis of the Independent Variables Descriptive Statistics N Minimum Maximum Mean Std. Deviation Adoptionofcomputerized 82 1.50 5.00 4.2378 .72319 Human resource 1 82 1.00 5.00 3.8293 1.03405 Human resource 2 82 1.00 5.00 3.9024 1.05245 Cost 82 1.00 5.00 3.9329 .98370 Administration 82 1.80 5.00 3.9683 .88748 Infrastructure 82 1.00 5.00 3.5610 1.32028 Valid N (listwise) 82 The description Of Descriptive Statistics The descriptive analysis of study comprised of the entire sample of 82 respondents. The average level of infrastructure has a minimum of 1.00and the maximum of5.00with an arithmetic mean of 3.5610, and standard deviation of 1.32028.The Human Resource was measured through table 16 using the Descriptive analysis, where the arithmetic means for human resource component one and two were 3.8293 and 3.9024 respectively and the standard deviation was 1.0524 for both components. The results of descriptive analysis for the cost from the standpoint of the sample consisting of 82 respondents presented that, the average level of the cost in the adoption of the computerized system is a minimum of 1.00 and 5.00 in the maximum and arithmetic mean of all questions were 3.9329and a standard deviation of 0.98370 accordingly. Based on this result one can say that, this variable is considered of a high level and is of great significance from the respondents’ point of view. Administration Performance was measured through questions 17-21 using the Descriptive table. The descriptive analysis and arithmetic mean of these questions for this variable was3.9683 and the standard deviation of 0.88748 and due to that, this variable is considered of a high level and is of great significance from the respondents’ point of view. 38 4.4.5. Descriptive Analysis for the items of the Computerized Accounting System Adoption (Dependent Variable) Descriptive analysis was used to measure the variables of the adoption of computerized accounting system in three Arusha District government hospitals, and was applied on the entire100 samples after the exclusion of 18 samples that were found 82 abnormal. The descriptive analysis showed that all the variables on the scale for the adoption of the computerized accounting system had an arithmetic mean of 4.2378 and this indicates that the trend of the sample respondents towards the implementation of the computerized accounting system is high. This showed that there is a high level of desire by the staff of the hospitals to implement this system. The arithmetic mean of questions was 4.2378 indicating in a preliminary basis that there is a high awareness of the items of the scale (the adoption of the computerized accounting system) by the study sample. 4.5. Inferential Statistical Analysis for Variables of the Study No variable was excluded due to the lack of higher linkage between the problems of the independent variables with each other as shown in table no. (17). the vicariate test analysis also confirmed that correlation between administration performance and cost with the dependent variable (the adoption of the computerized accounting system) is statistically significant as shown in table 17. Furthermore Table 17 showed a normal correlation (less than 0.70) between the independent variables and this does not affect the results of the regression analysis. Table17 makes clear that the problem of higher correlation is not found between two independent variables of study. This is where the largest correlation coefficient between administration performance and cost respectively with adoption of CAS with total power of the link is 0.664 and 0.467 respectively. 39 Table 17: Correlations adoption of Human Human Cost Administration_ Infrastructure computerized resource resourcer2 1 Adoption of CAS 1 Human resource_1 .049 1 Human resource 2 .110 .197 1 Cost .467** -.014 .006 1 Administration .664** .225* .208 .449** 1 infrastructure -.046 -.001 -.227* -.047 -.125 1 **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). 4.6 Regression analysis result Regression analysis was conducted between dependent variable (CAS) and independent variables. Table 18shows the results of regression analysis for the entire independent variables on the dependent. Table 18: Regression analysis results Coefficientsa Model Standardized Unstandardized Coefficients Coefficients B Std. Error Beta t Sig. 1 (Constant) 1.852 .450 4.112 .000 Human resource_1 -.059 .060 -.085 -.980 .330 Human resource_2 .007 .060 .011 .121 .904 Cost .148 .069 .201 2.151 .035 Administration_ .486 .079 .596 6.113 .000 Infrastructure_ .022 .047 .040 .470 .640 a. Dependent Variable: adoption of computerized accounting system From table 18, it is clear that administration and cost have significant and positive influence on computerized accounting system as such confirm hypotheses3 and 4. The magnitude of the effect of this variable on the dependent was 0.664 and 0.467 40 respectively. Regression analysis showed that other independent variables like infrastructure and human resource have weak correlation which is not statistical significant as shown in Table (18). From these findings it is obvious that hypotheses 1 and 2 are rejected. Table 19:Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate a 1 .696 .485 .451 .53599 dimension0 a. Predictors: (Constant), infrastucture_1, hr_1, cost_1, hr_2, administration_1 Referring to table no (19), the study found that the independent variables combined with the dependent variable of 0.696. The contribution of all independent variables to the dependent variable (the adoption of the computerized accounting system) was by R. Square .0.485. This indicates that the independent factors combined explain the rate of 0.451 of the change in the behavior of the dependent variable, which considered a high percentage, while the statistical independent variables represented in the infrastructure, human resource, and cost amounted to the impact of these variables combined on the dependent variable through the Adjusted R Square 0.451 Table 20 Results Summary Factor/Variable Hypothesis Alpha Sig. Inter Result Infrastructure H1 0.721 0.640 NS No affect(p>0.005) Human H2 0.711 0.330 NS No Resource affect(p>0.005) Human H2 0.714 0.904 NS No Resource affect(p>0.005) Cost H3 0.743 0.035 S Affect(p>0.005) Administration H4 0.777 0.000 S Affect(p<0.005) NS = Not significant, S = Significant 41 Hypotheses H1-This hypothesis accept null hypothesis and reject alternative hypothesis by having p>0.005 which is 0.640as shown in table above H2- This hypothesis accept null hypothesis and reject alternative hypothesis by having p>0.005 which is 0.330 and 0.904 as shown in table above H3- This hypothesis accepts alternative hypothesis and rejects null hypothesis by having p>0.005 which is 0.035 as shown in able above H4-This hypothesis reject null hypothesis and accept alternative hypothesis by having p<0.005 which is 0.000 as shown in table above Conclusion regarding Findings The specific objectives were to study the effect of the infrastructure, human resource, cost and administrative performance on the computerization of accounting system. The study findings showed that, there is a positive relationship between administration performance and cost with implementation of CAS in Arusha District hospitals as the results are statistically significant for the named variable. It has also been found that there is a weak relationship between human resource and infrastructure with computerization of accounting system for Arusha District hospitals, and the results are statistically insignificant for these variables. In a nutshell, adoption of CAS will depend much on the willingness of the administration and cost because the infrastructure and human resource will be covered if the administration is willing to adopt the system. 42 CHAPTER FIVE 5.0 DISCUSSION OF FINDINGS 5.1 Introduction The purpose of this study was to determine the factors for adoption of computerized accounting system with the Tanzania Ministry of Health from the viewpoint of public hospitals in Arusha District. The specific objectives were to measure the effect of the infrastructure, human resource, cost and administrative performance on the computerization of accounting system. This chapter discuss four Hypothesis derived from the above specific objectives. 5.2The Results of Testing Hypotheses and Answering the Study Questions The study hypotheses was measured using regression model, which was the factors affecting the adoption of the computerized accounting system on Arusha district governmental hospitals. 5.2.1 Testing the first Hypothesis and Answering the First Question The first objective of the study was to measure the effect of infrastructure on the computerization of the accounting system. Hypothesis that was developed stated that there is a significant relationship between infrastructure and computerization of the accounting system. Through regression analysis the study found that the impact of infrastructure on the computerization of the accounting system in the Arusha District governmental hospitals amounted to 0.022 and at statistical significance level of 0.640, thus, the study rejects the alternative hypothesis and accepts the null one.For that matter, these results contradict with Khan and Malik (2009) who conducted the study that aimed at understanding implementation of an Electronic Hospital Information System (EHIS) in Pakistan and found that the common challenges include poor electricity, lack of computer infrastructure, insufficient and unsustainable funding, and inadequate education. It is further inconsistent with Ismail et al (2010) in their study which aimed at finding out the factors hindering implementation of Hospital Information System (HIS) in tertiary hospital in Malaysia and the results were that, factors hindering implementation of HIS include 43 lack of commitment, inability to provide extensive information technology infrastructure, difficulty to obtain a sustainable software and hardware, and lack of skilled IT personnel. 5.2.2Testing the Second Hypothesis and Answering the Second Question The second objective of this research was to studythe effect of Human resource on the computerization of the accounting system. Hypothesis was developed and it states that there is a significant relationship between human resource and computerization of the accounting system. The results through a regression analysis show that there is no significance relationship between human resource and computerization of the accounting system in government hospitals. These results contradict with Elawi (2008) who conducted a study on obstacles of computerized accounting system applied in the Ministry of Education for the Master Thesis, University of Al al-Bayt. The results of his study showed that infrastructure and human resources are obstacles that prevent the possibility of applying the computerized accounting system in the Ministry of Education. Furthermore, these results contradict with the results of Ali (2011) who conducted a study that aimed at road towards a paperless hospital – A case study of Arusha Lutheran Medical Center in which he explored the challenge towards the paperless due to shortage of skilled personnel. The results further contradict with Khan and Malik (2009) who conducted the study that aimed at understanding implementation of an Electronic Hospital Information System (EHIS) in Pakistan and found that the common challenges include poor electricity, lack of computer infrastructure, insufficient and unsustainable funding, and inadequate education. 5.2.3 Testing the third Hypothesis and Answering the third Question In testing the third hypothesis, it was stipulated that there is definitely impact of statistical significance for the cost on the computerization of the accounting system to the Arusha District governmental hospitals. A regression analysis resultwhich is listed in table 18 accepts the alternative hypothesis and rejects the null where the level of significance equals to 0.035. This is as indicates that there is a weak 44 correlation between cost and the adoption of computerization of the accounting system to the Arusha District governmental hospitals. These results contradict with Al-Sabagh (2000) who conducted a study on cost elements for the implementation of computerized accounting system. The results of his study stipulated thatcost element must be taken into account when designing the accounting system so as to increase the expected benefits of the system than its preparation and implementation cost.The results further contradict with Khan and Malik (2009) who conducted the study that aimed at understanding implementation of an Electronic Hospital Information System (EHIS) in Pakistan and found that the common challenges include poor electricity, lack of computer infrastructure, insufficient and unsustainable funding, and inadequate education. 5.2.4Testing the Fourth Hypothesis and Answering the Fourth Question In testing the fourth hypothesis, it is evidentthat there is a statistically significant impact of administration to the computerization of the accounting system in Arusha District governmental hospitals.Regression analysis results accept the alternativehypothesis and reject the nullhypothesis. This means thatthere is positive correlation between administration performance of the Arusha District hospitals and the adoption of the computerized accounting system in these hospitals at the level of significance equals to 0.00. Theseresultsare consistent with Ismail et al (2010) in their study which aimed at finding out the factors hindering implementation of Hospital Information System (HIS) in tertiary hospital in Malaysia and the results were that, factors hindering implementation of HIS include lack of commitment, inability to provide extensive information technology infrastructure, difficulty to obtain a sustainable software and hardware, and lack of skilled IT personnel. The results are also consistent with Breen et al (2003) who wrote on the factors affecting small businesses to use computerized accounting, and their results show that the factors affecting the use of CAS include innovation factor, and characteristics of the organization decision makers. 45 CHAPTER SIX SUMMARY, CONCLUSION AND POLICY IMPLECATIONS 6.0 Introduction This chapter contains four parts which are summary of the thesis, limitation of the study conclusion and the policy implementation. 6.1 Summary The purpose of this study was to determine factorsfor the adoption of the computerized accounting system with the Tanzania Ministry of Health from the viewpoint of public hospitals in Arusha District. The specific objectives were to measure the effect of the infrastructure, human resource, cost and administrative performance on the computerization of accounting system. The independent variables consisted of infrastructure, human resource, cost and administration performance, while the dependent variable was the adoption of computerized accounting system in Public Hospitals. The researcher used descriptive design which involves observed and described the behavior of a subject without influencing it in any way. Purposively, sampling was used to select respondents and questionnaires were developed and distributed to all members involved in the study. The samples included (100) questionnaires but only eighty two (82) questionnaires were tested representing (82 %) of the questionnaires distributed to the sample of study. All the variables remained in the study analysis because their Cronbach’s alpha which measured internal consistency of variables was above 0.7, the required value. These variables were infrastructure, human resource, and cost and administration performance. The findings of this study showed that the administration and cost affect the Adoption of the computerized Accounting System in Arusha district government Hospitals. This was represented by Hypotheses(H3 and H4). Other Hypotheses were rejected. For example (H1) which was Infrastructure, (H2) which was Human resource do not affect Adoption of Computerized accounting System. 46 6.2 Conclusion The purpose of this study was to determine the factors for adoption of the computerized accounting system with the Tanzania Ministry of Health from the viewpoint of public hospitals in Arusha District. The specific objectives were to measure the effect of the infrastructure, human resource, cost and administrative performance on the computerization of accounting system. The study findings showed the following results; there is a positive correlation statistically significant with Administration and Cost to the implementation of the computerized accounting system in Arusha region hospitals. It has been found that there is a weak positive correlation which is not statistically significant between the Human resource, infrastructure and the implementation of the computerized accounting system in the Arusha District governmental hospitals. 6.3Recommendation In regard with the results, the study recommends that related decision-makers to computerization accounting system in governmental hospitals in Arusha District not to hesitate to take serious decisions to change from the current accounting system to computerized system. The decision-makers are important factors to keep pace with technological development in hospitals around the world today. Secondly, the administration has to take serious attempts in order to get governmental financial support to ease the burden of cost of these hospitals in order to facilitate the implementation of the computerized accounting system. The study recommended that policy makers need to work on strengthening the administration of the public hospitals in the Arusha district,and to make serious attempts to access the governmental financial support to ease the burden of cost of these hospitals in order to facilitate the process of adopting the computerized accounting system. 6.3.1Policy Makers in Tanzania Stockholders for public Health especially leaders in Ministry of Health should promote and increase awareness to the staffs of Public Hospital on the importance and necessity of computerized accounting system in providing good and quality 47 Service. This will be by communicating the national ICT policy in order to make computerized accounting system known by all the required staff that is required to know it in Public Hospitals. 6.3.2Administration of Public Hospital The administration should encourage computer usage among the public Hospital staff and promote various adoptions of computerized accounting System to develop computer skills and competence. This may be done by providing support to users by training them. The Ministry of Health and Hospital Information System developers need to communicate their policies especially ICT policy to facilitate implementation of computerized accounting system success. 6.4 Limitation of the study There are few limitations about this study amongst which was sample size. The participants were drawn from only three public Hospitals in Arusha district as others were not reached due to time. The other limitation was the knowledge of participants who were considered. 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Xiaohai Yang (2011).Sch. of Manage. & Econ., North China Univ. of Water Resources &Electr. Power, Zhengzhou, China 53 QUESTIONNAIRES Fortunta Alfredy, P.O BOX 7591, Arusha, th 01 Jan 2013 Dear respondent, My name is Fortunata Alfredy, a student at Mzumbe University, MU pursuing Master’s Degree of Science in Accounting and Finance. I am conducting the research on the Factors affecting applicability of computerized accounting system my case study being Arusha Region. I kindly request your cooperation in responding to the questions incorporated in this questionnaire as a way of helping me in the process of data collection for my proposed research topic (AN ASSESSMENT OF FACTORS AFFECTING APPICABILITY OF COMPUTERIZED ACCOUNTING SYSTEM IN GOVERNMENT HOSPITAL). I assure you that the information to be obtained from you will be treated with highly confidentiality in the whole process of writing my research report. Thanks in advance, You’re sincerely ………………….. F. A. Shirima A. Infrastructure 1. Hospitals have programs and networks of modern communications Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 2. Hospitals have enough database that contribute to the implementation of the computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 54 3. Hospitals have enough computers that contribute to the implementation of the computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 4. Hospitals have qualified staff in dealing with computerized accounting systems Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 5. Hospitals have qualified staff in programming and have a background in dealing with electronic programs Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral B. Human resource 6. The hospital provides special training programs for human resource, using computerized accounting systems Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 7. The hospital is seeking for hiring the right staff in place Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 8. The hospital is seeking to achieve perfection through holding training courses for the staff in financial affairs Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 9. There are fair criteria to upgrade the employees, promotions and giving them financial and moral incentives Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 10. The staff that working in the current system have sufficient experience that keep pace with the computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 11. The staff that working in the current system have the ability to use computer 55 Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral C. Cost 12. There are enough financial allocations to have and installed of a computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 13. There are enough financial allocations for the rehabilitation and training of staff on the computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 14. There are enough financial allocations for the processing of building a modern network to receive the computerized accounting system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 15. The hospital can get a governmental support to convert the current accounting system to a computerized system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 16. The expected benefit obtained from applying a computerized accounting system is greater than the cost of obtaining it Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral D. Managerial Performance 17. The managerial performance in the computerized accounting system assesses deviations in the performance of individuals better than the current system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 18. The computerized accounting system defines responsibilities on the activity of sections within the hospital better than the current system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 56 19. Administration can measure the performance of its staff in the light of a computerized accounting system, better than the current system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 20. Administration can assess daily activities in a computerized accounting system, better than the current system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 21. The performance of doctors in dealing with auditors in light of a computerized accounting system is better than the current system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral The adoption of the computerized accounting system in Arusha region Hospitals 22. The computerized accounting system is characterized by clarity more than the conventional system Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 23. The computerized accounting system is characterized by easiness of usage more than the conventional system. Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 24. The computerized accounting system provides enough information to internal and external control. Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 25. The computerized accounting system is more flexible than the conventional system. Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 26. The computerized accounting system provides easy reference and access to the information. Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 57 27. The hospital has the ability to apply the computerized accounting system, if adopted without facing any difficulties. Agree ( ) Strong agree ( ) Disagree ( ) Strong disagree ( ) Neutral 58