Assessing the effect of internal control systems on financial performance: a case of the coordinating office for the control of trypanosomisiasis in uganda (coctu).

Abstract

The study assessed the effect of internal control systems on financial performance in the agriculture sub sector. Primary data was collected using questionnaires, and interview. A total of 50 respondents participated in this study. Secondary data included review of documents and records such as management reports, Audit reports and other related literature. Data was analyzed using the Statistical Package for Social Scientists (SPSS). The dimensions of internal control systems in this study were (control environment, monitoring, and control activities) and they were linked to the dimensions of performance (liquidity, accountability, and reporting). Details revealed that control environment is linked to liquidity (r = 0.294, p≤0.01),control environment was also linked to accountability (r = 0.338, p ≤0.05), and control environment was related with reporting (r = 0276, p ≤0.01).Similarly, the study found that audit as a dimension of internal control system, was related with all the dimensions of financial performance in the following details; audit and liquidity was related (r = 0.091, p ≤0.01), internal audit was related with accountability (r = 0.447, p≤0.01), internal audit and reporting have a significant relationship (r = 0.389, p ≤0.01). In addition, control activities as a dimension of internal control system and all the dimensions of financial performance are related; control activities and liquidity are related ( r = 0.291, p ≤0.01), control activities and accountability are related (r = 0.411 , p ≤0.01), and control activities and reporting are related (r = 0.299, p≤0.01). On assessment, it was recommended that there was an urgent need for Management's action to correct errors in the system as an indication of Management's commitment to the operation of the internal control system. Management should always monitor, cross check and review the financial reports as well as carrying out similar studies in other government institutions. Having known the significance of Internal Control Systems on the financial performance, COCTU needs to ensure continuous review of the Internal Control System in the changing environment.