1Research Scholar; Department of Commerce & Business Administration, Acharya Nagarjuna University, Nagarjuna Nagar-522 510
2Department of Commerce & Business Administration, Acharya Nagarjuna University, Nagarjuna Nagar-522 510. Andhra Pradesh
3Faculty Member, Institute of Financial Management (IFM), Tanzania
Online published on 8 August, 2018.
In the event of growing significance of decentralization in Local Governments, this study aims to assess the relationship between internal control and fiscal decentralization, focusing on the role of internal control in the decentralized environment. To achieve this objective, the study employed structured questionnaire to collect primary data from local government officials in Tanzenia. A total of five hundred (500) likert scaled questionnaires were administered to local government officials in twenty eight (28) different councils. A total of three hundred and eighty nine (389) filled questionnaires were collected from accountants, internal auditors, planning officers, procurement officers, head of departments and council directors.
The descriptive analysis was done by using statistical package for social science (SPSS). Chi-square (61.985) test indicates that probability value is less than level of significance (p 0.000 < 0.05); which leads to the rejection of null hypothesis and acceptance of alternative hypothesis. The results reveal that there is statistical evidence of strong relationship between improvement on internal control and fiscal decentralization. The findings imply that in a fiscal decentralized environment, internal control is imperative to ensure financial discipline and promote good governance in Local Governments’ dealings. Following these findings, Local Government management and policy makers are argued to establish and facilitate a strong internal control mechanism to enable smooth and disciplined operations in a granted fiscal autonomy environment.
Internal Control, Fiscal Decentralization, Local Governments, Financial Control, Fiscal autonomy
