Effect of internal control systems on financial performance of saccos in Pallisa district:

Abstract

This study intended to find out the effect of internal control systems on financial performance of SACCOs in Pallisa district. The researcher was guided by three main objectives; to establish the effect of Control environment on financial performance of SACCOs in Pallisa district, to determine the effect of monitoring on financial performance of SACCOs in Pallisa district, and to determine the effect of Control activities on financial performance of SACCOs in Pallisa district. A study population of 30 SACCOs was used to extract a sample of 28 SACCOs (Krejcie & Morgan, 1970). The researcher also adopted a cross-sectional study design with a quantitative approach. Data was collected using a structured questionnaire and analyzed using a SPSS v 22. Correlation and regression results showed that control environment has a positive association with financial performance. Also, monitoring has a positive and significant relationship with financial performance. The study also found that control activities posted the least association with financial performance. The researcher therefore concluded that internal control systems dimensions (control environment, monitoring and control activities) have a positive and significant effect on financial performance. Therefore he recommends that management of SACCOs should always provide a conducive control environment with good management philosophies and organizational structures as this can improve monitoring and implementation of control activities and hence improve n the financial performance of SACCOs in Pallisa district