Internal control systems and management of public funds: the case of selected local government authorities in Tanzania.

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Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
This study explored the reason why most local government authorities (LGAs) in Tanzania have persistently had inadequate internal control systems and inadequate management of public funds. Using a multi-case study approach, the study specifically sought to establish the internal control systems that are at Kisarawe, Serengeti, Mvomero and Magu district councils, to assess their adequacy, to examine stakeholders’ perceptions of their adequacy and to provide reasons for their inadequacy. The study used agency theory and stakeholders’ theory to explain the internal control systems in LGAs. It employed a qualitative approach and, to some degree, a quantitative approach as well. The data were collected using in-depth interviews, focus group discussions and documentary review. The study has found that all four LGAs have similar internal control systems, since all operate under the same principles, rules and regulations. However, some of these frameworks are the underlying reason for the weaknesses of the LGAs’ internal control systems. The findings also show that the LGAs’ Internal Audit Units lack adequate capacity to control, monitor and evaluate the LGAs’ activities and financial operations. Similarly, the internal auditors’ inadequate independence affects the internal control systems and the management of public funds in the respective LGAs. Furthermore, the findings show that some public officers use the access to decisions and resources they have to abuse public office for personal gain. Although the LGAs have Information Technology and EPICOR as part of their internal control systems, the system does not operate as it should. Additionally, the limited professional qualifications and competence of most of the councillors adversely affect the internal control systems and the management of public funds. The study concludes that the problems noted in the selected LGAs are related to the weaknesses of the LGAs’ institutional frameworks, the inadequate capacity of some members of the oversight organs and of LGA officials, and insufficient funds. Generally, the internal control systems and the management of public funds are weak in the four selected LGAs. Nevertheless, Mvomero and Magu district councils have relatively weaker internal control systems than Kisarawe and Serengeti district councils. The study recommends that the LGAs strengthen the laws, rules and regulations governing the internal control systems and the management of public funds by working closely with the central government and other oversight organs. Similarly, the LGAs’ management should improve the working environment and encourage the building of good relations among the members of staff so that the LGAs’ policies can be implemented. Finally, there should be enough commitment and integrity on the part of government officials at all levels of government so that Tanzanian LGAs have sound internal control systems.  
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HJ3801.T340542)
Keywords
Investment of public fund, Management, Local government authority, Tanzania
Citation
Ondiek, P. J. (2018). Internal control systems and management of public funds: the case of selected local government authorities in Tanzania. Doctoral dissertation, University of Dar es Salaam.
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