Factors That Determine The Effectiveness Of Internal Audit In Managing Public Funds A Case Of Dodoma Municipal Council

ABSTRACT

The main objective of the study was to assess the factors that determine the

effectiveness of internal audit in managing public funds. The study was conducted in

Dodoma Municipal Council (DMC) using a case study approach. The study

attempted to combine all perspectives for evaluation of internal audit effectiveness in

the Municipal Councils.

The study involved 25 respondents from three occupations that were selected

purposively. The occupations were internal auditors, external auditors and non

auditor employees. 3 respondents were internal auditors selected from internal audit

department at DMC, 7 respondents were external auditors selected from the CAG

office and 15 respondents were non auditor employees selected from DMC. The

research involved collection of data and information using several approaches; these

included personal interview, group discussion, observation, and questionnaire

administration.

The findings show that internal audit highly contributes to the adaptation of

accountability in most LGAs and it helps to improve governance quality of an

organization. Research findings further show that the factors that influence the

effectiveness of internal audit in managing public funds are: internal audit quality,

management support, actions on internal audit report and auditee attributes. The

study recommends that the best strategies to promote effective internal audit are: to

increase the number of qualified staff to enable efficient regular review of records

and to implement policies and procedures necessary to prevent occurrence of losses

of public funds based on internal auditor‟s observations and recommendations.