The effectiveness of audit committee in local government authorities in Tanzania: a case of selected councils

The demand for accountability and the efficient use of public resources in the public sector remain to be a theme of discussion by donors, the civil society and the public at large. The Audit committee (AC) in the public sector is tailored to enhance transparent and accountability in the wise use of public resources. It has a significant role in improving and providing transparency around governance; risk management; financial management; and internal control practices in the public sector. Also it provides an independent internal oversight and advisory role; while the responsibility for decision making rests with the management. The general objective of the study was to investigate the effectiveness of AC within LG As in Tanzania. Several specific objectives were developed among them were to examine the influence of AC independence on the effectiveness of AC, establish the influence of competency and experience of committee members on the effectiveness of AC, determine the influence of members with financial expertise in the effectiveness of AC, and influence of performance appraisal to members and chairperson on the effectiveness of AC. Previous literature generally argued that the inclusion of independent, knowledgeable and expert members and delegation of adequate authority influence the AC effectiveness. In response to this argument, the study investigated the influence of AC independence; competence and experience of members; performance appraisal of the AC; frequency of meetings; and compliance with legislative requirement on the effectiveness of AC in LGAs. Four councils were selected through purposive sampling and primary data were gathered through questionnaires. The data were analysed using descriptive statistics and multivariate regression model with the help of Statistical Package for Social Science (SPSS) software. The variables that measures the committee independence; competence and experience of members; and performance appraisal of the AC showed a significant positive influence on the effectiveness of AC with P value <0.05. This implies that any change on these AC variables has impact on its effectiveness. The findings revealed that generally the AC was not effective of which the study recommends the responsible ministry among other things to review the current set up; composition; appointment process of committee members; scope of operations; reporting structure; and establish performance review so as to create an objective and independent audit committees in all councils. By doing so, it will enhance the effectiveness of AC in LGAs.