This study investigated the impact of internal control systems on the performance of Local Government Authorities (LGAs), a case study of Morogoro Municipal Council, Tanzania. This study was guided by the following hypothesis, there is a positive correlation between the MMC’s control environment and performance, there is a positive correlation between the MMC’s risk management activities and performance, there is a positive correlation between the MMC’s control activities and performance, there is a positive correlation between the MMC’s information and communication and performance, and there is a positive correlation between the MMC’s monitoring activities and performance. The study employed COSO’s ICS-Integrated Framework, introduced in 1992 and updated in 2013. The study adopted a pragmatism and mixed research approach. The sample size was 201 participants comprising 193 ordinary staff and 8 Heads of Departments (HoDs). Whereby, simple randomly and purposive samplings techniques were used to get the representatives. Questionnaires, interview and document analysis were employed to get the data. Validation of instruments was done by research experts and Cronbach alpha. The data were analysed quantitatively using descriptive and inferential statistical techniques while qualitative data were analysed using and thematic analysis. Correlation and regression analyses revealed strong, positive, and statistically significant relationships between internal control components and organizational performance, with Information and Communication (r = 0.808) and Monitoring Activities (r = 0.793) showing the highest correlations. The regression model confirmed these results, explaining 85.1% of performance variance (R = 0.923, R2 = 0.851; F = 214.114, p < 0.001), and identified Monitoring Activities, Risk Management, Control Environment, and Information and Communication as significant positive predictors. However, Control Activities had a negative and statistically insignificant effect (β = -0.049, p = 0.272), indicating its limited role when analyzed alongside other control components. The study recommends that, LGAs should prioritize strengthening key internal control components, especially Monitoring Activities, Risk Management, and Information and Communication, to enhance overall performance. Additionally, a review and redesign of Control Activities may be necessary to ensure their relevance and effectiveness within the broader internal control system.
Lyawatwa et al. (Mon,) studied this question.
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