Internal control systems and the revenue collection performance among Local Government Authorities (LGA) in Tanzania
Loading...
Date
2025-02-17
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Policy and Development Studies
Abstract
This study examines the influence of internal control systems on revenue
collection performance in selected Local Government Authorities (LGAs) in
Tanzania. Weak internal controls contribute to inefficiencies, fraud, and
inconsistent financial reporting, posing challenges to revenue collection. The
study evaluates the influence of internal control mechanisms in three LGAs,
Mbeya, Mwanza, and Manyara, categorised as high, medium, and low
performers by the Controller and Auditor General (CAG). A cross-sectional
survey design was employed, collecting data from 400 revenue officers
across the three LGAs. The study applied Two-Stage Least Squares (2SLS)
regression, using external audit frequency as an instrument to address
endogeneity concerns. Structured questionnaires facilitated standardised
data collection. Findings reveal that solid internal controls significantly
improve revenue collection. Accurate financial records (β = 0.045, p < 0.01),
timely reporting (β = 0.226, p < 0.01), and effective monitoring (β = 0.152, p <
0.01) enhance revenue efficiency. However, fraud incidents negatively
impact revenue growth (β = -0.042, p < 0.1). Internal audits strongly
influence revenue increments (β = 0.241, p < 0.01), highlighting their crucial
role. To enhance revenue performance, LGAs should strengthen internal
audits, improve the accuracy of financial records, implement fraud
prevention measures, and optimise reporting timelines. Policymakers should
establish standardised internal control frameworks, invest in technology,
and engage Public-Private Partnerships (PPPs), local communities, civil
society organisations, and NGOs to enhance external oversight, promote
citizen participation, and reinforce trust. Additionally, conducting regular
policy reviews will improve accountability and efficiency in revenue
collection processes.
Description
Journal article
Keywords
Internal Control System, Local Government Authorities, Revenue Collection Performance, Tanzania, Two-Stage Least Squares
Citation
Hyera, D. W., Kadigi, M. L. & Ndyetabula, D. W. (2025). Internal control systems and the revenue collection performance among local government authorities (LGA) in Tanzania. Journal of policy and development studies, 4(1), 1-15. https://doi.org/10.51317/jpds.v4i1.676