Internal Control Systems and Financial Accountability in Government Business Enterprises: A Case of National Water and Sewerage Corporation Ntungamo Area.

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Kabale University


The purpose of the study was to establish the relationship between internal control systems and financial accountability in Government Business Enterprises with NWSC Ntungamo Area as the case. The study found out that the relationship between internal control systems and financial accountability in NWSC Ntungamo area appeared to be weak (40.94%) of all explained variables. The study was based on three specific objectives, that is, to examine whether internal control systems are followed in NWSC; to examine the level of financial mechanism used; and to establish the relationship between internal control systems and financial accountability. To achieve these objectives, the study adopted a cross-sectional research design and quantitative and qualitative research approaches were used. Data was collected using questionnaires and face-to-face interviews. Data was analysed using statistical methods (Epi-Data for data screen and STATA). The survey results showed that 55.56% of the respondents agreed that the staff are aware of the penalties for breaking internal control system procedures in the organization. The results showed that the mean of 2.015 of the risk are always assessed well in order to minimize fraud which can hinder financial accountability. Further, results indicated that financial accountability was rated good and this was indicated by the overall mean of 1.9946 which implies that financial accountability in NWSC is done through effective mechanism of reporting, budgeting and professional competences. Results also indicated that NWSC supports the policy of the Government to have audited books to avoid fraud and embezzlement of funds and there are good monitoring strategies at all times to check the internal control systems within the organization. Despite the achievements made by NWSC, the organization faces some challenges such as lack of training opportunities, lack of enough staff and changes in management hampering financial accountability. These challenges should be addressed. Recommendations were that NWSC should ensure the effective and strong internal control activities; to uphold ethical values in managing finance, risk assessment should be done to all projects and programmes; and, NWSC should come up with a system for E-billing which can perform the system of disconnecting and connectiing client without any delay of services like the system of YAKA of UMEME. The study also recommends that NWSC should monitor continuously the internal control systems of all branches and fight against absenteeism of staff, especially area managers.


A Dissertation Submitted in Partial Fulfilment for the Requirment of the Award of a Degree of Master of Business Administration of Kabale University


Internal Control Systems , Financial Accountability, Government Business Enterprises