Effectiveness of the internal control system in public sector organisations in Uganda : a case study of National Agricultural Advisory Services (NAADS)

Abstract

The public sector is highly criticized for its inflexibility in performing its day to day activities with long chains of decision making and high level of weaknesses in the internal control system. Many developing countries Uganda inclusive have continued to suffer from unsatisfactory and dysfunctional governance systems leading to weak delivery of vital public service and poor accountability to the citizens. Corruption is high in Uganda public sector because of great opportunities in acquisition of government goods, services and works with inadequate controls. The Auditor General’s reports for Financial Years 2015-2017 highlight quite a number of high risk repetitive audit issues arising from weaknesses in the internal controls including failure to account for funds, mischarge of expenditure, unreconciled receivables and cash balances, poor asset management, procurements and civil works with value for money concerns, among others.

This is an indication of weaknesses in the internal control system and formed a basis for the researcher to conduct a study on the effectiveness of internal control systems with objectives of identifying internal controls in place setup by NAADS management, assess level of adherences to controls, make recommendations in internal control systems for better service delivery and identify other factors besides control systems that are impinging NAADS activities. A sample size of 48 respondents was drawn from the population using purposive and convenient sampling technique to select respondents with ability to respond to internal control system concerns. Questionnaire was the main instrument used to collect data and other secondary sources of information including website information, progress reports and strategic plans. This data was summarized, analyzed in form of arithmetic mean and percentages with tables and bar charts drawn to interpret the data. The study concluded that the internal control system of NAADS is highly effective with an arithmetic mean of 4.14 supported by an effective and active board of governance, control activities in place, risk assessment mechanisms and highly effective monitoring team. However, some deficiencies were noted that NAADS needs to improve on to avoid a qualified Auditor General’s report. Besides controls, the study revealed other factors that affect NAADS from operating smoothly including high political interferences, inadequate funding, climate change, low staff salaries and poor accountability by operation wealth creation officials, among others.