Managerial competencies, internal control systems and financial accountability of non governmental organizations in Kampala city

Abstract

This study examines the relationship between managerial competencies, internal control systems, and financial accountability in non-governmental organizations (NGOs) in Kampala City. The study was guided by four objectives, which were to: examine the relationship between managerial competencies and financial accountability; examine the relationship between managerial competencies and internal control systems; assess the relationship between internal control systems and financial accountability; and establish the mediating role of internal control systems in the relationship between managerial competencies and financial accountability. To achieve these objectives, a cross-sectional design was used, combining both qualitative and quantitative approaches. The target population consisted of 702 registered and validated NGOs in Kampala City, with a sample size of 248 NGOs determined using the Krejcie and Morgan (1970) sample size formula. Multi-stage sampling was employed for participant selection at various levels. Data was collected through questionnaires and interviews and then analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The results indicate significant positive relationships between managerial competencies and financial accountability (β=0.135, P<0.05), managerial competencies, and internal control systems (β=0.669, P<0.05), as well as internal control systems and financial accountability (β=0.557, P<0.05). Additionally, internal control systems were found to partially mediate the relationship between managerial competencies and financial accountability. The study concludes that internal control systems are a major predictor of financial accountability in NGOs in Kampala City. The study recommends that future studies consider longitudinal studies to evaluate the sustainability of these relationships over time. Furthermore, the study recommends that government agencies such as the National Bureau for Non-Governmental Organizations (NGO Bureau) and stakeholders in the NGO sector collaborate to develop capacity-building programs to enhance managerial competencies and internal control systems to ensure financial accountability.