The Role of Internal Audit on Financial Management of Public Institutions in Uganda a Case Study: Busia District Local Government

Abstract

The study examined the role of internal audit on financial management of public institutions a case study of Busia District Local Government. It was guided by the following objectives that’s; to examine the effect of audit planning on the financial management of public institutions in Uganda, to examine the effect of audit control system on the financial management of public institutions in Uganda and finally to examine the effect of audit compliance on the financial of public institutions in Uganda.

The research methodology adopted both descriptive and analytical research design based on semi-structured questionnaires to obtain the in-depth understanding of internal audit on financial management. Sample size of 152 respondents was randomly selected based on easy of access to them. The researcher used basically self-administered questionnaires as the instrument for data collection. Data was collected from both primary with the help of questionnaires designed using like scales and secondary data got from textbooks, internet, journals and newspaper articles.

The study established a positive relationship between audit compliance and financial management as being (r = 0.522, p < 0.01), audit control system and financial management had a positive relationship of (r = 0.480, p < 0.01) and audit planning and financial management had a significant relationship of(r = 0. 503, p <0.01). The study concluded that there was greater variation in financial management activities of Busia District local government due to changes in internal audit planning, professional competency and internal audit control systems; this shows that changes in financial management of Busia District local government could be accounted for by changes in regard to audit planning, audit control system and audit compliance.

Therefore the study further recommended that there is need for the internal auditors to continuously update themselves with the changing times and technologies and sharpen their skills. By applying skills to the most critical points, building personal and professional credibility and recognizing as well as responding to the needs, internal auditors can become indispensable thus speeding good governance and enhancing efficiency of internal audit within Busia District Local Government.

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