A Systematic Review of Internal Control Frameworks and Long-Term Financial Sustainability in Donor-Funded Organizations: Evidence from the Malawi “Compliance Trap”.
Publication Date: 18/06/2026
Author(s): Daniel Magoya, Anannya Boruah (Ph.D.).
Volume/Issue: Volume 9, Issue 2 (2026)
Page No: 77-91
Journal: African Journal of Accounting and Financial Research (AJAFR)
Abstract:
This systematic review investigates the "Compliance Trap" a structural paradox where high audit compliance fails to foster financial durability in Malawian NGOs despite aid inflows exceeding MWK 191 billion. Following PRISMA guidelines, 18 peer-reviewed sources (2014–2026) were synthesized using Institutional Theory to examine the "decoupling" of internal controls from strategic resilience. Findings reveal a critical imbalance: a 90% prevalence of transactional controls versus a 15% deficit in proactive risk assessment. Notably, a strong correlation (r = 0.72) exists between monitoring maturity and acquiring unrestricted funding. This research identifies the "Monitoring Dividend," shifting the focus from donor accountability to institutional sustainability. It offers actionable recommendations for the NGO Regulatory Authority (NGORA) to implement resilience-based stress testing, providing a pathway for local organizations to break the "two-year collapse cycle" and achieve genuine financial autonomy.
Keywords:
COSO, Financial Sustainability, Malawi, Compliance Trap, Geopolitical Shocks, Institutional Theory.
