Internal Controls, Budgeting Practices and Financial Accountability of NGO's in Uganda.
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Date
2023
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Abstract
Financial accountability among NGOs is essential in realizing stakeholder value. The study examined the relationship between internal controls, budgeting practices and financial accountability of NGOs in Kampala. The study was based on the following research objectives: to examine the relationship between internal controls and financial accountability, to examine the relationship between budgeting practices and financial accountability and to establish the effect of internal controls and budgeting practices on financial accountability. The study used the stakeholder theory to augment the relationship between the study variables. The study adopted a cross-sectional research design along with a quantitative research approach. A sample size of 140 was scientifically drawn from a population of 218 NGO firms using simple random sampling. Quantitative data analysis was done using regression and correlation analyses. Study findings revealed a positive relationship between internal controls and financial accountability (r=0.516** p≤.01) and budgeting practices and financial accountability (r=0.599**, p≤.01). Regression analysis also revealed that both internal controls and budgeting practices predict financial accountability of NGOs (Adjusted R = .426). Findings revealed that NGOs that do regular checks to ensure compliance with the internal controls take proactive measures to address financial risks in a timely manner. It was further observed that, NGOs that base their budget estimates on past performance and whose budget assumptions are realistic regularly provide detailed financial reports to stakeholders. The study recommends that NGOs ought to prioritize the development, implementation, and continuous improvement of robust internal control systems tailored to their operations. Also, policymakers and regulatory authorities should consider promoting guidelines that encourage NGOs to adopt effective budgeting practices. Finally, owners and managers of NGOs should adopt budgeting as a major component in their organization management strategy.
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A Dissertation Submitted to Makerere University Business School (Faculty of Graduate Studies and Research) in Partial Fulfilment of the Requirements for the Award of Degree of Masters of Business Administration of Makerere University. (PLAN A).
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Grace, A (2023) Internal Controls, Budgeting Practices and Financial Accountability of NGO's in Uganda : A Case of National NGO'S in Kampala. Unpublished Masters Dissertation Makerere University Business School. Kampala, Uganda.