Internal Auditing and Performance of Local Governments in Uganda “A Case Study of Lyantonde District Local Government”

ABSTRACT

 The research was done with the purpose of establishing the effectiveness of internal auditing systems in the financial performance of local governments in Uganda. The definition of both the independent variable and the dependent variable were discussed together with the problems hindering the performance of internal auditing and the performance of local governments. The conceptual framework that reflects the variables whose relationships were studied was developed. The following were the specific objectives; to determine the nature of internal audit in local government~ to identify the challenges faced by the internal audit unit in enhancing financial performance I local government~ to identify the possible solutions to avert the challenges faced by the internal audit unit in Lyantonde district local government. A combination of cross~secti0nal and descriptive research design was used applying both qualitative and quantitative research techniques. The study population was 94 employees being a total population of Lyantonde district local government workers. Out of these, a sample of 40 employees was selected as a representative of the whole population and for convenient purposes. The findings revealed that there existed positive relationships between the variables of study as conceptualized and local government performance and generally been fairly satisfactorily and internal auditing in local governments was also fairly performance. The fair performance being attributed to a lack of complete independence of internal auditors, inappropriate internal controls and management’s reluctance to attend to the recommendati01~5. The researcher, therefore, recommended that there is a need for periodic review of the internal control systems of LDLG so as to deflect deficiencies as they emerge from time to time. And that there is a need for the management of LDLO to periodicallY review the internal audit manuals to meet the ever changing environments that favour fraud and embezzleme1~t. In conclusion, the roles of the internal audit function in a local government are clear to all employees as per the local government manual and regulations act but the internal audit function do not execute their tasks perfectly because they choose some of the duties and yet a combination of all roles and measures would clearly cub the problem of fraud and embezzlement currently lbcing LDLG. it is evident that, it is due to negligence of employees to their duties that has led to a problem of fraud in local governments over years