Internal controls and financial management of public universities in Uganda.

Abstract

This study aimed at establishing the relationship between internal controls and financial management in public universities. The study was grounded on three objectives: to examine the relationship between control activities and financial management, to establish the relationship between control environment and financial management and to examine the relationship between risk assessment and financial management of public universities. The study was anchored on agency and management control theories. The study targeted 60 administrative staff from the 12 public universities in Uganda who are directly involved in financial management. The researcher used simple random sampling technique to choose the twelve public universities as guided by Yamane (1967). The 60 respondents were purposively selected from the 12 public universities. The study adopted a cross sectional research design with quantitative approach. A structured closed-ended questionnaire was used to collect data. Validity and reliability analysis were tested using both expert judgment and Cronbach’s Alpha Coefficient to determine the content validity and internal consistency of the research instruments respectively. The collected data were analyzed using descriptive and inferential statistics, and later presented using tables and figures. The findings confirmed the stated hypotheses by indicating that control activities, control environment and risk assessment have positive significant effect on financial management. The study therefore, concluded that effective internal controls are a pre-requisite for proper financial management of public universities. The study recommended that public Universities should strengthen internal controls by establishing strong organizational structures, ensuring segregation of duties, clear authorization of duties develops a risk management plan and always do a background check up through the audit department. This will enable all those concerned with direct management of financial resources in the university arena to execute their duties with the highest level of efficiency and effectiveness so as to curtail the possibility of perpetrating fraud, poor accountability and loss of financial resources. The study suggested that future researchers should conduct a comparison study by covering both private and public institutions of higher learning since this study was limited to public universities.