Financial Management Under Fiscal Decentralization and Service Delivery in Local Government; A Case of Works Department in Mbarara District, · Southwestern Uganda

ABSTRACT The study was about financial management under fiscal decentralisation and service delivery in local government. It was carried out in Mbarara local government works department south western Uganda. The objectives of the study included; To find out the state of financial management system in the local government, to establish the roles of financial management stakeholders in improving financial management in the district, to evaluate the effect of current financial management system under fiscal decentralisation on the quality of service delivery, to establish the challenges faced in trying to promote better financial management for better service The research was done based on the effectiveness of financial management under fiscal decentralisation and service delivery in local government. Research design was a descriptive survey and the study population comprised of the general public, civil servants and financial managers. Cluster sampling was used for sampling while simple random and purposive sampling was used for subject sampling. Questionnaires, interview guide and secondary data sources were used as data collection methods. Data analysis was done using SPSS and themes were developed while presenting the data basing on the research objectives. It was unveiled from the findings that stakeholders namely local leaders, civil servants, civil society organization and NGO leaders have been involved in improving financial management through paiiicipating in planning and budgeting, operating within approved guidelines and preparation of final accounts. Decentralized financial management system has had effects on the quality of service delivery tlu·ough promotion of proper accountability, increased ability to realize value for money quick service delivery; however there are still some challenges like limited local government revenues, mismanagement of funds, political interference and delayed release of central government funds. Training finance officers, widening tax base and empowering anti corruption bodies to fight practices of financial mismanagements have been used as some of the measurers to improve decentralized financial management in works department. There is need for recruitment of wellqualified finance staff and to reduce bureaucracies in payment structures and other government financial transactions.futher stiil, finance staffs under local government should be given the opportunity to suggest their own financial management system they deem suitable which will formulate the employee friendly financial management regulation. The CAO as chief accounting officer should step up his supervisory and monitoring role to keep financial management system operating with in limit regulation and guidelines

 TABLE OF CONTENTS 

Dedication.................................................................................................. iii 

Acknowledgement........................................................................................ iv 

Table of contents: .. .. .. .. .. . .. . .. . .. . .. .. .. .. .. .. .. . .. .. .. .. . .. . .. . .. .. . . .. . .. . .. . .. . .. . .. .. . .. .. .. . .. . ... v 

Appendices . . . . . .. . . . . . . . . . . . . . . . . .  .. . . . . .. . . . . . . . . . . .. . . . . . . . .. . . . . .. . . . . . . . ... viii 

List of Tables ............................................................................................... ix 

List of abbreviations and acronyms.................................................................... x1 

Abstract.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii 

CHAPTER ONE 

1.0 INTRODUCTION................................................................................ 1 

1: I Back ground .. . . . .. . .. . . . . .. . . .. .. .. . .. .. .. .. .. .. .. . .. .. .. .. . .. . . .. .. .. . .. .. .. .. .. .. .. .. . .. .. .. .... .1 

1 :2 Statement of the problem........................................................................ 5 

1:3 Purpose of the study.............................................................................. 7 

1 :4 Objective of the study.............................................................................. 7 

1 :6 Research questions................................................................................. _7 

I :7 Scope of the study................................................................................ 8 

I: 8 Significance of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 

CHAPTER TWO 

2.0 LITERATURE REVIEW..................................................................... IO 

2.1 Introduction .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. . . . .. .. .. .. .. . . . .. .. . .. .. .. .. .. . . .. . .. .. .. . .. .. .. .. .. 10 

2.2 Contextual Review................................................................................. 10 

2.2.2 Role of financial management stakeholder..................................................... 12 

2.1.3 Effect of financial management system on the quality of service delivery................ 12 

2.1.4 Challenges faced in trying to promote better financial mgt for better service delivery 19 

2:1 :5 Appropriate measures of improving financial mgt system through Decentralization... 20 

2:2 Conclusion ........................................................................................ . 24 

CHAPTER THREE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 

3.0 METHODOLOGY 

3:0 Introduction......................................................................................... 25 

3: 1 Research design . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 25 

3:2 Study area........................................................................................... 25 

3:3 Study variables..................................................................................... 25 

3:4 Sample procedure.................................................................................. 25 

3:5 Data collection methods.......................................................................... 27 

3:6 Method of data handling.......................................................................... 27 

3:7 Reliability and validity of the instrument...................................................... 28 

3:8 Problems encountered in the study............................................................. 30 

CHAPTER FOUR 

4.0 PRESENTATION OF RESULTS ANALYSIS AND INTERPRETATION 

4:1 Introduction ....................................................................................... . 31 

4:2:0 Biographic characteristics of respondents...................................................... 31 

4:3:0 Perception ofrespondents about decentralization.............................................. 39 

4:4:0 Ways in which financial management is promoted under local government............... 41 

4:5:0 Procedures in ensuring proper financial management procedures.......................... 43 

4:6:0 Role of stakeholders in promoting good financial management system................... 51 

4:8:0 Effect of cmTent financial management system on quality and service delivery.......... 57 

4:9:0 Challenges faced in proper financial management for service delivery................... 61 

CHAPTER FIVE 

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION 

5: I Introduction:........................................................................................ 66 

5 :2 Discussion of findings . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 66 

5:3 Conclusion.......................................................................................... 73 

5:4 Recommendations.................................................................................. 75 

5.5 Areas for further studies . . . . . . . ... . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 76