CORPORATE GOVERNANCE AND PERFORMANCE OF LOCAL GOVERNMENTS IN UGANDA A CASE STUDY OF MBARARA DISTRICT LOCAL GOVERNMENT (2013-2018)

TABLE OF CONTENTS

DECLARATION .jj

APPROVAL

DEDICATION iv

ACKNOWLEDGEMENTS v

TABLE OF CONTENTS vi

LIST OF TABLES

LIST OF FIGURES

LIST OF ACRONYMS xiii

ABSTRACT

CHAPTER ONE: INTRODUCTION

1 .0 Introduction 1

I Background of the study 1

1 .2 Problem statement 3

1 .3 Objectives of the study 3

1.3.1 General objective 3

I .3.2 Specific objectives 4

1.4 Research questions 4

I .5 Scope of the study 4

1.5.1 Geographical scope 4

1.5.2 Time scope 4

1 .5.3 Contextual scope 5

1.6 Significance of the study 5

I .7 Conceptual framework 5

Figure 1: Showing conceptual framework 5

CHAPTER TWO: LITERATURE REVIEW .7

2.0 Introduction 7

2. 1 Overview of corporate governance 7

2.2 Ways in which proper corporate governance is executed in local governments 8

2.2.1 Openness 8

2.2.2 Honesty/Integrity 9

2.2.3 Accountability 9

2.2.4 Duty/rule of law 10

2.2.5 Transparency 10

2.2.6 Citizen Participation 10

2.2.7 Value for Money 11

2.3 Effectiveness of Corporate governance in enhancing performance of local governments 11

2.3.1 Waste Management 12

2.3.2 Licensing and Enforcement 12

2.3.3 Town Planning and Development Control 13

2.3.4 Front Desk Counter 14

2.3.5 Public Facilities 14

2.3.6 Service Delivery 15

2.4 Relationship between Corporate Governance and Performance in local governments 16

2.4.1 Concept of performance of local governments 16

2.4.2 Measures of Performance of local governments 17

2.4.2.1 Revenue based indicators 17

2.4.2.2 Expenditure-Based Indicators 18

2.4.2.3 Results/Budget Performance Based indicators 19

2.4.2.4 Value for money analysis 21

Figure 2: Value for Money Strategy in local governments .22

2.4.3 Relating Corporate Governance to Perfonnance oflocal governments 23

2.4.3.! Openness and Performance 23

2.4.3.2 Honesty/integrity and Performance 24

2.4.3.3 Accountability and Performance 25

2.4.3.4 Variance analysis 26

2.4.3.5 Transparency and Performance 27

2.4.3.6 Citizen Participation and Performance 28

2.4.3.7 Value for money and Performnance 29

CHAPTER THREE: RESEARCH METHODOLOGY 31

3.0 Introduction 31

3.1 Rcscarch design 31

3.2 Study population 31

3.2.1 Sample size determination 32

3.3 Sainpling technique 33

3.4.0 Data collection methods 33

3.4.1 Data collection instruments 33

3.4.3 Procedure ofdata collection 33

3.5 Data analysis 34

3.5.1 Data processing 34

3.5.2 Data analysis 34

3.5.3 Data presentation 34

3.6 Reliability and validity ofthe data instruments 34

3.7 Ethical consideration 36

3.8 Limitations ofthe study 36

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS, INTERPRETATION AND

DISCUSSION OF THE STUDYFINDINGS 37

4.O lntroduction 37

4.1.1 Gender of the respondents 37

4.1 .2 Age group of the respondents 38

4.1.3 Level of education of respondents 38

4.2 ANALYSIS AND DISCUSION OF STUDY FINDINGS ACCORDING TO STUDY OBJECTIVES 41

4.2.1 To examine the ways in which proper corporate governance is executed in Mbarara District Local Government 41

4.2.2 To examine the effectiveness of Corporate governance in enhancing performance of Mbarara district local government 45

4.4 To establish the relationship between corporate’ governance and performance of Mbarara district local government 49

CHAPTER FIVE: SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS OF THE

STUDY FINDINGS 53

5.1 Introduction 53

5.1 Summary of the study findings according to objectives 53

5.1.1 To examine the ways in which proper corporate governance is executed in Mbarara District Local Government 53

5.1.2 To examine the effectiveness of Corporate governance in enhancing performance of Mbarara district local government 53

5.1.3 To examine the relationship between corporate governance and performance of MDLG 54

5.2 Conclusions to the study .~ 54

5.3 Recommendations to the study ss

5.4 Suggested areas for further study 55

References 56

APPENDICES .61

Appendix A: Questionnaire tool .~ 61

Research Work Plan 65

Research Budget 67

Researcher’s Curriculum Vitae 68

ABSTRACT 

This study was about corporate governance and performance of local governments in Uganda. It was based on three specific objectives which included:- to examine the ways in which proper corporate governance is executed in local governments, to examine the effectiveness of corporate governance in enhancing performance of local goyernments and to establish the relationship between corporate governance and performance of local governments. It was conducted from a sample of 80 respondents selected from Mbarara district local government.The study was based on the dcscriptive survey as the methodology. A descriptive survey is usually concerned with describing the population with respect to important variables with the major emphasis being the establishment of the relationship between the variables. This design was used to collect data from members of the population and describe existing phenomenon with reference to corporate governance structures. The study findings indicate the ways in which proper corporate governance is executed in Mbarara District Local Government and these ways include transparency, honesty/integrity. citizen participation, accountability, public participation, openness and ethical conduct. Also the study findings revealed that the effectiveness of corporate governance in enhancing performance is due to fact that ever since Mbarara district local government started ensuring value for money during the procurement process and contract award .and that all contracts, performance reports and financial statements are audited by an independent auditor, budgets are well prepared and implemented on most priority basis, citizens’ complaints are adhered to and appropriate. construction contracts are well monitored until their completion, local revenues are accessed and collected in the right manner, there is adequate and skilled staff in order to quicken service delivery 34 (81.0%), there is an appropriate mechanism for information flow from the village level to district level and public expenditure is done in an equitable and right manner with much emphasis on priority areas. In addition, the study findings revealed that there is a positive relationship between corporate governance and the performance of local governments. The study concludes that corporate governance has been executed in a proper way in Mbarara district local government where the properness was found to be reflected in terms of openness, transparency, honesty, accountability, citizen participation, respect for the rule of law, xiv trust/sincerity, ensuring professional and ethical conduct and citizen representation in council meetings which are all indicators of proper corporate governance. The study recommends local governments to put in place effective budgetary and internal controls in order to reap a significant improvement in performance. Proper controls should be put in place over revenue collection, contract execution, procurement, recruitment and service delivery.