The Effect of External Auditing On the Performance of Local Governments in Eastern Uganda a Case Study of Iganga District Local Government

ABSTRACT This report is under the topic of effect of external auditing on the performance of Local Governments in eastern Uganda a case study of Iganga District Local Government. It was further broken down into three specific objectives and these were; 1) the effect of verification of accounting data on the performance of local governments; 2) effect of records vouching or examination on the performance of local government and 3) was the effect of internal control on the performance of local government. The research design that was used in this study was specifically quantitative and qualitative research design and the furthermore the study population was 20 respondents from which the sample size of 19 was derived. The findings showed that responses on the effect of Verification of Accounting data on the performance of local governments were. 48% conceded/agreed with a frequency of 83. 35% strongly agreed with a frequency of 61, 10% were uncertain with a frequency of 18, 5% disagreed with a frequency of 9 and 2% strongly disagreed with a frequency of 3 hence stipulating a total frequency of 174. Therefore verification of accounting data is very significant or of great importance on the performance of local governments. The findings on second objective showed that the responses on the effect of records vouching or examination on the performance of local governments were as follows; 53% with a frequency of 92 agreed, 33% with a frequency of 57 strongly agreed, and 12% with a frequency of 21 were uncertain, 2% with a frequency of 4 disagreed and none strongly disagreed hence with a total frequency of 174. This connotes that records vouching or examination is of great implication on the performance of local governments. And on the final objective it was found that the responses on the effect of internal control on the performance of local governments were, 53% of the respondents with a frequency of7l agreed, 30% with a frequency of 40 strongly agreed, 10% with a frequency of 13 were uncertain, 4% with a frequency of 5 disagreed and 3% with a frequency of 4 strongly disagreed. This implies that internal control is of great effect on the performance of local governments. Conclusions and recommendations were then drafted that much as Internal auditing exist in lganga District local government, it is inadequate and inefficient in management of accountability and improvement of performance. This therefore calls for a stronger and effective auditing genre (External auditing or statutory auditing) to help the local government improve on Accountability, Quality service delivery and Economic efficiency alias Performance of the local government appropriately. There is need for the external auditors to continuously update themselves with the changing times and technologies and sharpen their skills. By applying skills to the most critical points, building personal and professional credibility and recognizing and responding to the needs, external auditors can become indispensable thus speeding good governance and enhancing efficiency of external audit. The local government should enhance verification of accounting data and all financial transactions or statements to improve accountability and acknowledgement of public funds and resources hence enhancement of accountability, quality service delivery and economic efficiency. The local government should enhance the vouching or examination of records where there are more than two examiners or accounting officers to ensure genuine and authenticated transactions, segregation of duties or division of labour, proper preparation of financial transactions or statements, implementation of computerized systems of accounting (Accounting Information Systems) among others hence improvement and enhancement of funds and resources accountability, quality service delivery and economic efficiency. The local government should look forward to establishing internal checks and balances of the all accounting/ financial statements and transactions ensure effective internal audit for the enhanced performance ofthe local government.