Internal control systems and the financial management function in urban governance in Uganda

Abstract

In Uganda like many developing countries, financial management units are facing numerous performance challenges as a result of untold pressure, overwhelming deadlines, limited resources, political patronage and limited professional skills among the practioners. To unravel these impediments, drastic mechanisms need to be put in place to ensure a common balance among all stakeholders; financial resources must be used in a frugal but in a strategic manner to ensure effective and efficient allocation to all sectors of governance both in the urban and rural administrative units. Urban governance in Uganda like many developing countries has its own peculiarities ranging from provision of key social service delivery to mandatory urban infrastructural development, hence the reason for taking calculated steps to deliver effectively. The study advances the argument that capacity enhancement of staff and the strict observance of internal control mechanisms is the epitome of a vibrant financial management system in the administration of urban authorities.

Assessment of the internal control system mechanisms among selected state governments in Nigeria

“…This suggests that there are precise controls, awareness is raised and they are properly implemented. The result is supported by Malowa (2021) which explains a long-lasting evaluation and monitoring framework in public organizations.…”

“…The study found that internal control systems and anti-fraud awareness in inter-governmental organizations have a significant effect on fraud prevention. Furthermore, Malowa (2021) in Uganda, Muhunyo and Jagongo (2018) in Kenya, Oduro (2018) in Ghana and Ujkani and Vokshi (2019) in Kosovo investigated the effect of internal control mechanisms on fraud prevention and implementation of public sector budgetary provisions and found significant effects of control mechanisms in the prevention of misuse of public funds and optimal implementation of public entities' budgetary provisions. However, all these studies are limited in scope because they failed to explore in detail all five components of internal control mechanisms as laid down in the COSO framework.…”

“…The previous literature on the assessment of internal control in the public sector is limited to two components out of the five components of internal control systems of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Hence, the focus has been on control environment and control activities with little consideration given to the other three components that are equally important particularly for the financial operations of public sector institutions (Adebayo & Ilesanmi, 2020;Ademola et al, 2015;Akinkoye & Adewumi, 2019;Asaolu, Adedokun, & Monday, 2016;Aziz, Rahman, Alam, & Said, 2015;Izedonmi & Olateru-Olagbegi, 2018;Malowa, 2021;Muhunyo & Jagongo, 2018;Oladejo & Nwachukwu, 2021;Sharma & Senan, 2019;Udeh & Nwadialor, 2016;Yao, Yusheng, & Bah, 2017). The study fills this gap by taking into consideration the five components of internal control system mechanisms in the COSO framework in the assessment of the existence and implementation of internal control systems in the public sector contributing to the empirical literature.…”