Abstract:
This study aimed at examining internal control systems and financial management in PDLG.
Internal control systems are integral components of the management processes of public
sector organizations. They are established in order to provide reasonable assurance that
ensures financial operations are carried out transparently and accountably in the most
effective and efficient way to the benefit of the stakeholders. The internal control system is
analyzed using variables of control environment, monitoring controls and control activities.
The study was anchored on contingency theory of management and the agency theory. The
main objective of the study was to examine the effect of internal control systems on financial
management in PDLG. The descriptive research design was adopted from a sample of 33
employees working in local government where quantitative method was applied in data
collection and analysis. The descriptive design was suitable because it addresses major
objectives and research questions proposed in the study adequately. The study gathered
primary data which was established through questionnaires to randomly selected employees
from local government. The use of questionnaires was recommended since it guarantees
confidentiality to the respondents. Descriptive statistics was used in the data analysis and
information presented in statistical forms. Correlations and linear regression analysis were
also used to analyze the relationship between ICS and FM. The study realized that control
environment, monitoring activities and control activities as indicators of ICS, have a
significant influence on financial management in local government. Therefore, the study
recommends that ICS in the local governments need to be improved mostly on
implementation of physical controls, effective formalized human resource policies, approval
and segregation of duties to ensure accountability of organizational resources be upheld.
