Internal Control Systems and Organizational Performance of Financial Institutions in Uganda a Case Study: Pride Microfinance Limited, Fort Portal Branch

Abstract

The study sought to establish the role of internal control systems on the performance of Microfinance Institutions a case study of Pride Micro Finance Limited, Fort Portal branch. The research objectives were; to establish the effect of control activities on the performance of financial institutions; To examine the influence of communication and monitoring on the performance of financial institutions and; To assess the role of the control environment on the performance of financial institutions.

A cross sectional survey was used in the course of the study. Both qualitative and quantitative data was gathered in order to establish the relationship between the independent and dependent variables. The study comprised of 44 employees of Pride Micro Finance Limited that targets the management more so those within the departments that use internal controls which include officers from the accounting and finance department that is the Teller operators, accountants and Bankers, Procurement and security departments which are key users and enforcers of internal control systems within the organization. Simple random approach was used during the study. Purposive sampling was also used to select only respondents for the researcher to attain the purpose of the study. Data was collected using both primary and secondary sources. The data was presented in tabular form, pie charts and bar graphs. The researcher used Statistical Package for Social Sciences (SPSS) to analyze the relationship between the variables under study.

The study findings indicated that the internal controls used in Pride Micro Finance limited were effective and satisfactory, the level of performance was found to be adequate and a significant relationship between control activities, communication and monitoring, control environment and strong performance existed.

Login to download()