An Analysis of Internal Control Systems and Their Influnce on Financial Sustainability of Selected Institutions of Higher Learning in Tanzania

Arthur Sunday, Mabonga Eric, Tumwebaze Lydia, Kirabo Kyeyune B. Joseph


The study investigated and sought to establish the relationship between internal control systems and financial sustainability in an Institution of higher learning in Tanzania. Internal controls were looked at from the perspective of Control Environment, Internal Audit and Control Activities whereas Financial sustainability focused on Liquidity, Accountability and Reporting as the measures of Financial sustainability. The Researcher set out to establish the causes of persistent poor financial sustainability from the perspective of internal controls.

The research was conducted using both quantitative and qualitative approaches using Survey,

Correlation and Case study as Research  Designs. Data was collected using Questionnaires and

Interview guide as well as review of availablefinancial reports, documents and records of the selected institutions .The study found that management of most  institutions is committed to the control systems, actively participates in monitoring and supervision of the activities of the Institutions of higher leraning , all the activities of the Institution’s activities are initiated by the top level management, that the internal audit conduct regular audit activities and doesn’t produce regular audit reports although the few reports produced by the internal audit department address weaknesses in the system. It was further revealed that there is a clear separation of roles, weaknesses in the system are addressed, and there is a training program for capacity building in most of the  institution. However, the study also found out that there is lack of information sharing and inadequate security measures to safeguard the assets of the Institutions of higher leraning . It was however, revealed that all revenues and expenditures are properly classified, and that assets of the Institutions of higher leraning  have generally increased. The study established a significant relationship between internal control system and financial sustainability. The investigation recommends competence profiling in the Internal Audit department which should be based on what the Institutions of higher leraning  expect the internal audit to do and what appropriate number staff would be required to do this job. It also recommends that the institution establishes and manages knowledge/information management system to enable all parties within the institutions to freely access and utilize the official information. There should be a strategy to improve the generation of additional finances for the Institutions of higher leraning .

The Study therefore concludes that internal control systems do function although with hiccups

and that there is a significant relationship between internal control systems and financial

sustainability in an Institution of higher learning.

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