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INTERNAL AUDIT AND QUALITY OF SERVICES DELIVERED BY NAADS
PROGRAM: ACASE STUDY OF KISORO DISTRICT
BY
MWUBAHIMANA DOREEN
08/U/23789/EXT
208010375
SUPERVISED BY
MR. TUSUBIRA NYENDE FESTO
A RESEARCH REPORT SUBMITTED TO IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE AWARD OF A BACHELORS
DEGREE OF COMMERCE OFMAKERERE UNIVERSITY
JULY, 2012
i
DECLARATIONI Mwubahimana Doreen declare that the content in this report to the best of my knowledge is
entirely my own original work, and that it has never been submitted before to any other
University or institution of higher learning for award of a degree or diploma.
Mwubahimana Doreen
08/U/23789/EXT
Signed …………………………… Date………………………
I
APPROVALThis research report has been under my supervision and is ready for submission and examination
Signature………………………….. Date………………………………..
Tusubira Nyende Festo
Supervisor
II
DEDICATIONThis work is dedicated to my lovely mum Evanice Kazinda, my dad John Kazinda, sisters
Judith and kevin, brothers Vicky, Albun and Dick, Mr and Mrs Bariyanga James and to all my
cousins and dearest friends Cossey and Flo. God bless you
III
ACKNOWLEDGEMENTI would like to acknowledge with deep gratitude my lovely mum, Dad, Aunt Jeninah, all my
uncles for all the support rendered both morally and financially, and Mr. Bariyanga James who
despite the odds, encouraged and critiqued and inspired mi for the last six years .
Let me express mostly my sincere gratitude to my Supervisor Mr. Tusubira Nyende Festo
without whose help this work would never have been accomplished. I thank him for his tireless
effort to put this work to the shape it is now.
Many people have assisted mi while carrying out research. I would like to the thank the staff of
SoraineUganda ltd for having given their time and facilities to use in my research more
especially Mr. Bizimungu Emmanuel who tirelessly helped while analyzing data and also many
thanks goes to NAADS coordinator kisoro district and the staff and Mr. Kayibanda Tom for
their contribution and cooperation towards my research.
Finally a lot of thanks go to all my friends like Dr Gerald, cossey, Florence, Kato, Sarah, Danie,
Future, Amos and all my group members for the words of encouragement and the time we have
been together. Many thanks
IV
LIST OF ACRONYMSNAADS National Agricultural Advisory Services
LGDP Local Government Development Program
PMA Plan for Modernization of Agriculture
PEAP Poverty Eradication Action Plan
MAAIF Ministry of Agriculture Animal Industry and Fisheries
LGIAM Local Government Internal Audit Manual
NGO Non-Governmental Organization.
AG Auditor General
LG Local Government
CFO Chief Finance Officer
COSO Committees of Sponsoring Organization.
SPPIA Standards for Professional Practice of Internal Auditors.
v
TABLE OF CONTENT
DECLARATION..............................................................................................................................I
APPROVAL....................................................................................................................................II
DEDICATION...............................................................................................................................III
ACKNOWLEDGEMENT.............................................................................................................IV
LIST OF ACRONYMS...................................................................................................................v
LIST OF TABLES...........................................................................................................................x
LIST OF FIGURES........................................................................................................................xi
ABSTRACT..................................................................................................................................xii
CHAPTER ONE..............................................................................................................................1
1.0 Introduction...............................................................................................................................1
1.1 Background................................................................................................................................1
1.2. Statement of the Problem..........................................................................................................5
1.3 Purpose of the Study..................................................................................................................6
1.4. Objectives of the Study.............................................................................................................6
1.5. Research Questions...................................................................................................................6
1.6. Scope of the Study....................................................................................................................6
1.6.1. Content of Scope....................................................................................................................6
1.6.2. Geographical Scope...............................................................................................................6
1.6.3. Time Scope............................................................................................................................6
1.7. Significant of the Study............................................................................................................7
CHAPTER TWO:LITERATURE REVIEW...................................................................................8
2.0 Introductions..............................................................................................................................8
2.1 Components and roles of internal audit...................................................................................8
2.1.1 Definition..............................................................................................................................8
2.1.2 Objectives of internal auditing................................................................................................8
2.1.3 Importance of internal auditing..............................................................................................9
2.1.4 Roles of internal audit.............................................................................................................9
2.1.5 Challenges of internal audit..................................................................................................10
2.1.6. Independence of Internal audit............................................................................................11
vi
2.2 Quality Service Delivery.........................................................................................................12
2.2.1 Definitions............................................................................................................................12
2.2.3. Characteristics of Quality Service Delivery........................................................................13
2.2.4. Services delivered by NAADs program..............................................................................13
2.3. Relationship between internal audit and quality service delivery..........................................15
2.3.1 Establishment of internal audit and consistence in quality service delivery........................15
2.3.2 Internal controls and reliability of quality service delivery..................................................16
2.3.3. Financial reports and accessibility of staff..........................................................................18
2.3.4. Conclusion...........................................................................................................................18
CHAPTER THREE:RESEARCH METHODOLOGY.................................................................19
3.0. Introduction.............................................................................................................................19
3.1. Research designs.....................................................................................................................19
3.2. Study population.....................................................................................................................19
3.3. Sampling design......................................................................................................................19
3.4. Sampling size..........................................................................................................................19
3.5. Sampling procedures..............................................................................................................20
3.6. Data sources............................................................................................................................20
3.61 primary sources of data..........................................................................................................20
3.62. Secondary source of data......................................................................................................20
3.7 Data collection instruments.....................................................................................................20
3.71. Personal interviews...............................................................................................................20
3.72 Questionnaires.......................................................................................................................21
3.8 Data processing and analysis...................................................................................................21
3.9 Procedures of the study............................................................................................................21
3.9.1 Limitations of the study........................................................................................................21
CHAPTER FOUR:RESEARCH FINDINGS, INTERPRETATIONS PRESENTATIONS AND
DISCISSIONS...............................................................................................................................22
4.0. Introductions...........................................................................................................................22
4.1. DEMOGRAPHIC CHARACTERISTICS OF COMMUNITY RESPONDENTS................22
4.1.1 Sex of the community respondent........................................................................................22
4.1.2. Age of the community respondents.....................................................................................23
vii
4.1.3. Findings on marital status of the community respondents..................................................24
4.1.4. Findings on the highest educational level............................................................................24
4.2. OBJECTIVE ONE; COMPONENTS AND ROLES OF INTERNAL AUDIT.....................26
4.3. OBJECTIVE TWO: FINDINGS ABOUT SERVICES DELIVERED BY NAADS
PROGRAM....................................................................................................................................27
4.3.2. Findings from management and staff on roles and components of internal audit...............29
4.3.3. Services delivered by NAADS program..............................................................................30
4.3.4. Challenges faced by internal auditors..................................................................................33
4.3.5. Findings on how internal audit has helped greatly in quality service delivery...................35
4.3.6 Challenges faced in NAADS program.................................................................................37
4.3.7. What government should to ensure quality service delivery...............................................40
4.3.7.1 Findings from the community...........................................................................................40
4.3.7.2 Findings from the management and staff..........................................................................43
4.4. Demographic characteristics of management and staff..........................................................44
4.4.1. Sex of management and staff...............................................................................................44
4.4.2. Age of management and staff..............................................................................................44
4.4.3. Education level of management and staff............................................................................45
4.4.4 Marital status of management and staff................................................................................46
4.4.5. Positions occupied by management and staff......................................................................47
4.4.6. Positions held in local government and years of employment............................................48
4.4.7. Books of accounts kept........................................................................................................49
4.5. OBJECTIVE THREE. RELATIONSHIP BETWEEN INTERNAL AUDIT AND QUALITY
SERVICE DELIVERY..................................................................................................................49
4.6. Challenges faced by internal audit while rendering quality services.....................................51
4.7. Ways of addressing the challenges affecting the quality services..........................................52
CHAPTER FIVE:SUMMARY CONCLUSIONS AND RECOMMENDATIONS.....................53
5.0. Introductions...........................................................................................................................53
5.1. Summary of findings..............................................................................................................53
5.1.1 Components and roles of internal audit................................................................................53
5.1.2 Quality service delivery........................................................................................................53
5.1.3. Relationship between internal audit and quality of service delivery...................................54
viii
5.2. Conclusion..............................................................................................................................54
5.2.1 Components and roles of internal audit................................................................................54
5.2.2 Quality of services delivery..................................................................................................54
5.2.3. Relationship between internal audit and quality of service delivery...................................55
5.3. Recommendations...................................................................................................................55
5.3.1 Recommendations on roles of internal audit......................................................................55
5.3.2. Recommendation on quality service delivery......................................................................56
5.3.3. Recommendations on the relationship between internal audit and quality service delivery
.......................................................................................................................................................56
5.4. Suggested areas for future research........................................................................................56
REFERENCES..............................................................................................................................58
APPENDICES...............................................................................................................................60
ix
LIST OF TABLESTable 1: showing findings on services delivered by NAADS programme...................................31
Table 2: showing findings on challenges faced by internal auditors.............................................33
Table 3: showing findings on how internal audit function has helped in quality service delivery.
.......................................................................................................................................................36
Table 4: showing findings on challenges faced in NAADS program...........................................38
Table 5: showing findings on what government should do to ensure service delivery.................41
Table 6: showing findings from the management and staff about what the government should do
to ensure quality service................................................................................................................43
Table 7: showing findings on positions occupied by management and staff in local government
and NAADs program.....................................................................................................................47
Table 8: showing findings on years of employment by management and staff and position held in
the local government......................................................................................................................48
Table 9: showing findings on books of accounts kept in NAADS program both at the district
level and sub county level..............................................................................................................49
Table 10: showing relationship of internal audit and quality of service delivery in NAADS.......50
x
LIST OF FIGURES
Figure 1: showing findings on sex of community respondents.....................................................22
Figure2: showingfindingsonageofcommunityrespondents............................................................23
Figure 3: showing findings on marital status of the community respondent.................................24
Figure 4: showing findings on educational level of community respondents...............................24
Figure 5. Showing findings on components and roles of internal audit........................................26
Figure 6: showing responses of the community on services delivered by NAADs in the sub
counties of Muramba, Murora, Nyarusiza and Bukimbiri.............................................................28
Figure 7: showing average scores on the roles and components of internal audit........................29
Figure 8: showing findings on Services delivered by NAADS programme.................................30
Figure 9: showing findings from the community respondents on challenges faced by internal
auditors..........................................................................................................................................33
Figure 10: showing responses by the community on how internal audit function has helped in
quality service delivery..................................................................................................................35
Figure 11; showing findings on challenges faced by NAADs program........................................37
Figure 12: showing responses from the community and findings on what government should do
to ensure quality service delivery..................................................................................................40
Figure 12: showing findings on sex of the management and staff respondent..............................44
Figure 13: showing findings about the age of the staff respondents.............................................44
Figure 14: showing findings about Educational level of the management and staff.....................45
Figure 15: showing findings on marital status of management and staff......................................46
Figure 16: showing average score of management and staff on services delivered by NAADs
program..........................................................................................................................................48
xi
ABSTRACTThe purpose of the research was to discover more about the influence of internal audit on quality
of services delivered by NAADs program.
The objectives of the study were to find out the components, roles and objectives of internal
audit, quality of services delivered by NAADs program and the relation between internal audit
and quality of services delivered by NAADs program.
The study focused on 4 sub counties in Kisoro district i.e. Muramba, Nyarusiza, Murora and
Bukimbiri and it was based on NAADs implementation from 2010 up to date.
The research design was descriptive in nature based on the data collected. Both qualitative and
quantitative data were collected and was used in analyzing relationship between internal audit
and quality of services delivered in NAADs program.
The survey included management, audit and accounts staff and members of the community
including vulnerable people who benefited from NAADs program. The sample size of 33
respondents; 4 sub county coordinators, CFO kisoro district, district procurement officer, 2
accounts assistants, 3 internal auditors and 21 community members.
Purposive method was used while selecting respondents both from staff and the community.
Data collected was entered into a computer system and analyzed using Epidata software SPSS
and Ms excel.
The relationship between internal audit and quality of services was found out to be positive
relation ship with correlation co efficient of 0.519.
Recommendations were made for NAADs to improve on quality services delivered to the
community and these include channeling more efforts to internal audit function and also to
increase on funds to implement these projects.
xii
CHAPTER ONE
1.0 Introduction
This chapter includes the background to the study, statement of the problem, purpose of the
study, objectives of the study, research questions, scope and the significant of the study.
1.1 BackgroundAn audit is the examination and checking of financial statements by a professional auditor or
accountant who has had no part in the operation of an organization. The process involves
examination of the evidence from which the final accounts statements of an organization
have been prepared in order to ascertain that they present a true and fair reflection of the
summarized transactions for the period under the review and of the financial state of the
organization at the end date. According to Manasset, (1999) auditing refers to the
independent examination of the books of accounts and vouchers of the organization with the
view of making an opinion as to whether books have been kept properly according to
standards and regulations.
Whereas Local government internal audit manual (LGIAM, 2007) defines an internal auditor
as an individual within an organization’s internal audit department who is assigned the
responsibility of performing internal audit functions. In this particular study, the internal
auditor will refer to national agricultural advisory services’ internal auditor. The change in
internal auditing scope is best seen in the definition of internal auditing adopted by The
Institute of Internal Auditors. Internal auditing is an independent, objective assurance and
consulting activity designed to add value and improve an organization’s operations. It helps
an organization accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control, and governance
processes. (Irvinn Gliem, 2000).
This definition recognizes two major pillars of internal audit that are the scope of internal
auditors and constituencies or customers of internal auditors. The scope of internal auditors is
1
to provide independent, objective assurance and consulting activity, so that to add value to
the organizations in the course of evaluate and improve the effectiveness of risk
management, control, and governance processes
The objective of internal audit is to determine whether controls over financial and operating
data provide managers with reasonable assurance that the financial and operating data is
accurate and reliable (i.e., that information gathering and reporting has been properly
planned, organized and directed);. It also determine whether controls over compliance with
policies, procedures, plans, laws and regulations provide managers with reasonable assurance
that proper compliance actually occurs. Internal audit also determines whether controls over
assets provides managers with reasonable assurance that assets exist and are protected against
loss that could result from theft, fire, improper or illegal activities, or exposure to the
elements. The other objective is to determine whether controls over operations provide
managers with reasonable assurance that resources are used efficiently and economically and
also to determine whether controls over operations and programs provide managers with
reasonable assurance that the operations and programs are being carried out as planned, and
that the results of operations are consistent with established goals and objectives
An internal audit could encompass all five audit objectives (a full scope audit); or only one
or a few of the five audit objectives (a limited scope audit). Audit scope collected can be
further limited by only assessing and evaluating the adequacy of controls (i.e., the degree to
which the controls provide reasonable assurance); or by only assessing and evaluating the
effectiveness of the controls (i.e., the degree to which the controls actually function as
management intended). The components of internal audit objective controls includes; sound
Control Environment, sound Risk Assessment Process, Sound Operational Control
Activities, Sound Information and Communications System; and Sound Monitoring
Practices
Ramascoamy, (1990) suggests that, audit performance can be categorized in many ways
among which include Continuous audit which is when the audit staff is engaged in checking
the, accounts for the whole year, Interim audit where an audit is conducted for part of the
accounting period and Final audit where an audit is carried out after the closure of the
financial year. According to National Agricultural Advisory Services act, (NAADS act,
2
2001) the organization shall keep proper accounts and records of its transactions and affairs
and shall ensure that all moneys received are properly brought to accounts, all payments out
of its moneys are correctly made and properly authorized and that adequate control is
mandated over its property. It also requires that the annual accounts of the organization shall
be audited by the auditor general or an auditor appointed by auditor general.
Service quality refers to difference between customer’s expectations for the service
encounter and the perceptions of the service received. According to the service quality
theory (Oliver,1980), it is predicted that customers will judge that quality as ` low` if
performance does not meet their expectations and quality as `high` when performance
exceeds expectations. Closing this gap might require toning down the expectations or
heightening the perception of what has actually been received by the customer (Parasuraman
et al., 1985).
According to Gronroos (1982), perceived quality of a given service is the result of an
evaluation process since consumers often make comparison between the services they
expected. There are 3 approaches that offer clients in this case the households the most value
and flexibility when delivering services among these include On-Demand Services and this
is a flexible approach where a resource is deployed for just a few days, a few weeks or even a
few months to help assist with smaller projects or intermittent needs. Project Services also
another approach that offers value and flexibility and this when help is needed to complete a
defined scope of work in one or all phases of the full project lifecycle including:
requirements gathering, design, development, testing, deployment and project management.
Managed Services is also used as an approach which is mainly for system support strategies,
where a long-term outsourced plan makes more sense.
According to Rowley (1997), quality of services perceived by a customer (households)
originates by comparison of what they feel that service organization should offer i.e. from
their perceptions of performance of organization providing services. Dillinger.B, (1995),
available evidence suggests that constraints to improved service delivery is not merely one
of the resource availability but others particularly institutional arrangements of service
delivery. He asserts that there is lack of clear incentives to the personnel in the service
3
delivery industry and lack of clear reward for performance and all lead to inefficiency and
under deployment of resources.
NAADS is a new program of the government of Uganda which was put in place by NAADS
act 2001 to increase efficiency and effectiveness of agricultural extension services. It was
designed with the overall development objective of supporting transformation of agriculture
from subsistence to commercial farming. NAADS is the government principal institutional
frame work for PMA (Plan for Modernization of Agriculture) implementation. Under this
program districts and local authorities are responsible for agricultural extension and this is
guided by PEAP and its over all supervision is vested in the ministry of agriculture, animal,
industry and fisheries (MAAIF)
The project was launched in 2000 and was officially implemented in 2001. It is a 25 yr
program with an initial phase of 7 years where by the 1st 2 years were the trail blazing
districts of Arua, Kabale Kibale Mukono Soroti and Tororo operating in only four sub
counties in each district. The trail blazing districts and sub counties were chosen according to
the criteria designed to reflect variety with respect to nature of local agricultural economy
and agro-ecological zones as well as compliance with local government development
program. (LGDP)
Since the completion of trail blazing phase in 2002, NAADS has continued to expand to new
districts and with in the existing districts to new sub counties. NAADS to date is being
implemented in 79 districts and 710 sub counties .among which Kisoro district was inclusive.
The expansion to new districts and sub counties is through either direct entry or
harmonization with the ongoing programs that have extension related components. Nearly
two in every three households were involved in agricultural activities and mainly engaged in
crop husbandry (99%). Up to 43 percent of the households were involved in both crop and
animal husbandry. Nearly 42 percent of the households engaged in crop husbandry had never
demanded any Extension services. The situation was worse with fish farming where 84
percent had never demanded the services. Only 14 percent of the households had been visited
by an extension Worker within 12 months before the survey compared to about 29 percent
reported in the 2000 NSDS. The western and eastern regions reported the lowest percentages
of households visited by extension workers of about 11 and 12 percent respectively.
4
Government was found to be the main source of all extension services in the 12 months that
preceded the survey. Other sources included the private sector and NGOs, which provided
services to less than 30 percent of the households, except for animal husbandry where it was
about 38 percent. About one half of the households indicated that they were within 5 km
from the extension worker while about 20 percent were within a distance of more than 10
km. More than one in every three households reported mass media as the most common
method of accessing agricultural extension services although only one in every five
households preferred the method. Most households preferred meetings with the extension
worker. Crop husbandry and fisheries services were generally provided free of charge and
services for animal husbandry were paid for by slightly over a half of the households.
Internal audit is an independent appraisal function established by management to review its
internal control systems as a service to the organization. This is to ensure that it achieves the
set objectives (Millichamp, 2002) and therefore a management tool in evaluating its
performance and where there deviation actions are taken that is, where services provided are
not consistence and reliable then the problem could be internal auditors that may be
incompetent due to lack of skills and knowledge and therefore may need to recruit qualified
auditors to improve on internal audit to ensure quality service delivery.
1.2. Statement of the Problem.Basing on previous published NAADs performance reports, quality service delivery in
NAADs program has been poor. According to NAADS report (May, 2007), there were
challenges among which include human pests resulting into fruit thefts; limited finance to
expand their enterprise lack of a reliable market and high costs of pesticides. However
Government has employed qualified personnel, increased sensitization about NAADs
program but still the quality of services is poor and this could be attributed to the poor
internal audit and if it’s not improved the organization may not achieve its objectives hence
leading to the study.
5
1.3 Purpose of the StudyThe purpose of the study was to establish the relationship between internal auditing and
quality of service delivery in NAADs program and how delivery of services can be
improved.
1.4. Objectives of the Studyi. To determine the components and roles of internal audit in NAADs program
ii) To determine the quality of services delivered by NAADs program to households
iii) To find out the relationship between internal auditing and quality of services delivered
by NAADs program.
1.5. Research Questionsi). what are the components and roles of internal auditing?
ii). what is the level of quality services delivered by NAADs program?
iii). To what extent does the internal audit influence the quality of services delivered by
NAADs program?
1.6. Scope of the Study
1.6.1. Content of Scope. The study was to look at the roles and objectives of internal audit as away for NAADS to be
effective in delivering its services to households.
1.6.2. Geographical ScopeThe research focused on NAADS program in Kisoro district located in south western
Uganda on the boarders of Rwanda and Democratic Republic of Congo (DRC)
1.6.3. Time ScopeThe study based on NAADS implementation from 2010 to date.
6
1.7. Significant of the Study.a) To increase the awareness and roles of internal audit as a foundation for proper
accounting of resources in NAADs program.
b) To bring to the attention of managers and staff the wrongs of fraud and theft and also
for the public to appreciate the co-coordinators’ jobs.
c) The study was to help government to improve on internal controls in management of
resources provided through NAADs program
d) The study was to help add on the body of existing literature and this provides
reference to future academics and research.
e) The research findings were to explore the need to internal audit regulations and
NAADs regulations at large.
7
CHAPTER TWO
LITERATURE REVIEW
2.0 IntroductionsThis chapter covers the literature review regarding internal audit functions, its objectives,
purpose, importance, challenges and the nature of services provided and the relationship
between internal audit and quality service delivery.
2.1 Components and roles of internal audit
2.1.1 Definition An audit is a process carried out by suitably qualified auditors where the accounts of
organization are subjected in such detail as will enable auditors to form an opinion as to their
accuracy truth and fairness. The opinion will be covered in an audit report which is to be
addressed to interested parties who commission the audit or to whom the auditors are
responsible under the statute (Emile Woolf)
An internal audit is an independent appraisal function established by management of an
organization for the review of internal control systems as a service to the organization to
examine, evaluate and report on accounting and other controls on operations. According to
Manasseh, (1991) internal audit exists either voluntarily or in certain situations because of
the statutory requirements. Art wood, (1986) define internal audit as an element of internal
central system set up by management as a method of imposing controls.
2.1.2 Objectives of internal auditing According to (Koontz, 2001) the objectives of internal audit includes; provide reasonable
assurance that the assets of an organization are being properly safeguarded, to evaluate
adequacy of control organizational control systems in working towards achieving its
objectives, to ensure that financial records are being kept reliably and accurately enough for
preparation of financial statements and to assist managers in appraising the performance of
the organization.
8
2.1.3 Importance of internal auditing Millichamp, (2002) internal auditing helps the organizations accomplish its objectives by
bringing systematic approach to evaluate and improve the effectiveness of risk management
control and governance processes. From the institute of internal auditors seminars papers on
20th April 2005, the institute believes that an organization is best served by resourced and
professionally competent internal auditors who provides services of high value which are
crucial to the efficient and effective management of an organization
(http://college.hmco.com).
Local Government act (LG act, 1997) section 91 every district, municipality and sub counties
should have an internal audit function supported by NAADS act, 2001 which requires that
annual accounts of an organization shall be audited by an auditor general or an auditor
appointed by auditor general.
2.1.4 Roles of internal auditThe internal audit role depends upon formal recognition by the highest levels of management
of the independence of internal audit staff (vinten, 1999), Arkin, (1984) defines audit roles by
“stating the objectives of the ordinary examination of financial statements by the independent
auditors in the expression of an opinion on the fairness with which they present financial
position and results of operation”. Simmons’s 1995 also stipulates that implementation of
standards of professional practice of internal auditing will be governed by the environment in
which the internal audit department carries out its operations. This implies that the success
and effectiveness of internal audit department depends upon the degree of importance
attached by management on internal audit function. Internal audit must be independent and
must be able to work in conducive environment in order to be able to perform its duties well.
Internal audit has also the responsibility to exercise due professional care and skills in the
performance of audit. They are responsible for assisting in detection of fraud by examining
the adequacy and effectiveness of the system of internal control systems. Therefore each
local government must establish internal audit function (LG act 2009). NAADS act, (2001)
sec 29 provides that all processes of service delivery to be audited.
9
According to stoner, (2000) an effective internal operations assists management in designing
and maintaining the control systems through on going evaluation of its effectiveness. Internal
audit should ensure that the organization control systems improve accountability, promotes
ethical professional organizational practices, advance risk management, enhances
communication, performance reporting and contributes to quality outcomes. Internal audit
has a key role to play in the new environment in keeping the a management informed of
efficiency and effectiveness of resource usage in the achievement of corporate goals and
objectives and importantly on providing expert advise and remunerations for improvement in
resource management and accountability.
Internal audit plays a major role in portraying best practices at all levels of the organization
and should identify risks that may affect the achievement of the organizations’ objectives. It
should ensure that effective control are established by management to mitigate identified
risks and measures performance both financial and operational through the use of appropriate
evaluation tools which will enable the adequacy and effectiveness of internal controls to be
measured
Internal audit are ideally placed to assist organization maintain good corporate governance by
promoting and participating in regular surveys of staff management. It also assists the public
to assess leadership issues across the organization through any staff morale concerns,
problems encountered during organization operations, the ethical conduct and the adequacy
of communication. Also on adequacy of control systems, reporting and monitoring and the
quality of services provided timeliness and problems associated with quality service delivery
as per Harley (1990). By having areal and visible presence in the organization, the internal
audit is well placed to promote the culture of good corporate governance and act as a
deterrent to adoption of poor practices. To be able to meet this role, internal audit has to work
harmoniously with all stakeholders as per Pat A.G. for Austria (SOPAC’ 98,
http//www.anao.gov.au)
2.1.5 Challenges of internal audit.
Following Uganda’s system of decentralization framework, increasing service delivery is by
bringing the decision making with regard to increasing service delivery closer to the actual
10
users of those services. It provides for participation of the beneficiaries and accountability of
the governors’ to the community. Internal audit is facing many challenges, some of the
challenges identified by the Ministry of Finance and Development in Internal Audit Manual
are: lack of expertise leading to trivial auditing findings, lack of opportunity for professional
development, repetitive audit routines which staffed members can predict, being assigned to
tasked such as accounting and pre-control of expenditures with the internal auditor
subsequently have to audit (conflict of interest) inability to insist on getting significant
information because of fears of losing promotion opportunities and job security (lack of
independence), wrong perception of the audit function and auditors by the staff of the public
body. The above-mentioned problems can be classified into two categories with some
overlapping first, the competency of internal auditor that leads to trivial audit finding, lack
of professional development, repetitive audit work, and non-value added internal audit report.
Second, structural problem (reporting relationship) in the form of assigned task that impair
the auditor independency, and fear of losing promotion, job security , and wrong perception
about internal auditors as faultfinders and their task as policing rather than auditing.
However the system is weak and needs to be further consolidated by building the capacity of
LG institutions to plan prioritize and implement its programs (NAADS program) LG act,
(1997). Internal audit are poorly facilitated that is some of them lack the appropriate quality
number of staff and this has an impact on the type of report compiled by internal auditors
and in most cases the reports are largely of poor quality with no clear specified action plans.
Economic analysis paper// 3.4.3 on planning management and implementation capacity of
local government.
2.1.6. Independence of Internal audit.Independence is mandatory in auditing for internal auditors to have freedom to select areas of
audit he or she wishes to investigate and to report on to all levels of management. In the
organization, independence is fundamental importance in effectiveness of internal audit. The
internal audit should be independence of financial systems operating with in the organization
which at all times must have direct access to departmental heads, the accounting officer and
the organization records and information. Ndahura, (2001) says that Chief executive should
aim at preserving the independence status of internal audit function and ensure that it has all
11
financial and administration records of the organization. The public accounts committee
guideline (October, 1988), Wolf, 1994 also emphasized the need for internal audit to be
independent. Independence is the key of audit, the independence lies in the fact that an
independent unit should be set up without interference and influences from other
departments. The audit unit should be able to give independent opinions and make decisions
on how to handle the problems arising from the audits (Chen and Sun, 1997).
2.2 Quality Service Delivery.
2.2.1 DefinitionsQuality means different things to different people. It is a grade of excellence of a service
(Balunywa, 1998). Quality must be reduced into clear components that can be understood
that is performance, reliability, conformance and perceived quality (Garvni, Balunywa1998),
Shirley, (2002) defined quality in three different dimensions that is; technical definition, user
definition and value definition. Technical definition is where quality is seen as conformance
to specifications or fitness of purpose and in User definition a number of people have
stressed the importance of taking into account user/customer based quality criteria especially
when delivering services (camp bell, Burton (2000)). Service is any act or performance that
one party can offer to another that is essentially intangible and does not result in ownership
of anything and its production may or may not tied to physical product (kottler, 1988).
Quality service is variably defined but essentially it is to do with meeting customer’s needs
and requirements and how well the services delivered matches with customer’s expectations.
According to Darley, (1994) service quality issues have been academic and much of interest
were focused on marketing resulting from increasing importance of service sectors.
Balunywa, (1998) defined quality service delivery as the aggregate characteristics of a
service that can be able to satisfy the needs that are valued by the society. Lunkuse, (2002)
explains that quality service delivery is the meeting of customer’s needs and requirements
and how well the service delivered matches individual satisfaction.
12
2.2.2 Quality Service Measurements.
Semayengo, (2005) lamented that service quality can be measured through written survey
questionnaires as a common means of finding out from customers whether they are happy
with the services provided or not. The questionnaires should reveal the strength and
weakness of the organization, getting feedback from ex-customers left for one reasons or
another. Customers who are no longer with the organization gives more evaluation on a
service. This enables the organization to improve on the service, collect mistakes identified
in the questionnaires and also address the issues to collect mistakes in service delivery.
Quality is the result of a comparison between what was required and what was provided. It is
judged not by the producer but by the receiver. The judgment can be made of an intention as
it is the case of when suppliers or output as the case when selecting a product/service
(Taylor, 1998).
2.2.3. Characteristics of Quality Service Delivery.Darley, (1994) identified attributes that are associated to a service quality and includes;
Reliability and this is explained by consistence of performance and dependability. It means
that the organization performs its services right for the first time and honors its promises to
the public. It also ensures good record keeping and performs it at the stipulated time.
Accessibility is also another attribute and it involves approachability and ease to contact
service provider’s i.e. In case of any problem, service providers can easily be approached
and intervene immediately. Competence is also another attribute identified which he meant
as possession of required skills and knowledge to perform services by the employees and
ability of organization to carry out research on the services it providing to the public and
Communication which involves keeping customers informed of the event happening in the
language they understand and listen to their complaints.
2.2.4. Services delivered by NAADs program. This is one of the key government programs under the plan for modernization of agriculture
(PMA). The NAADs program which started in Mukono district in FY 2001 is about the
processes which evolve gradually. Through experience sharing, they are able to improve
these processes with a goal of providing a more efficient and beneficiary targeted service to
13
the grass root level. The program is mandated to facilitate farmers to acquire knowledge and
skills as well as enhance their capacity to realize increased household incomes. This calls for
support to farmers to create institutions that enables them to organize, formulate and
prioritize their needs for appropriate agricultural advisory services. NAADS is implemented
through farmer institutions or groups created at the farmer level. The capacity of these
institutions to implement NAADS processes is by facilitated NGO’s through collaborative
arrangements with NAADS.
According to the NAADS act, (2005), their two main ways in which farmers participates in
NAADS as members of farmer institutions, as a resident of the village, parish or sub-county
where the service provider has the contract. For the farmer group/institution to be represented
on the farmers forum membership they should have a defined membership of individuals or
households who are engaged in agricultural activities and contributing either in cash or in
kind to group activities and existence; objectives which include aspects related to agriculture
and livelihood (NAADs act,2005).
Farmers are said to be empowered when they have access and control over structures and
processes that transform their natural resources asset into outcomes that they desire. It is very
difficult to achieve this in the delivery of services for individual, isolated resource poor
farmers. Therefore one of the pre-requisite for empowerment of farmers is to enable them
create institutions through which they can act collectively and get their voices heard in
decision making processes. (Master document NAADs Task Force act, 2000). These groups
have promoted identity of farmers within their communities and a forum for interaction. The
transformation envisaged in NAADs calls for major attitudinal changes, which members in a
group can achieve through behavioral change. This has occurred because farmers are
becoming more receptive to developmental programs and have registered a multiplier effect
in the dissemination of information and adoption of new technologies. Currently farmers do
not belong to any grouping. Even where a farmer group exists, their viability is low.
Knowing the importance of group formation to empowerment and adoption of new
technologies will promote the formation of hierarchy of farmer institution rooted in the
village level farmer groups (LR Humphrey, 1976). The village level federate to form rural
14
farmer organizations which will eventually be replicated at the district and national levels
(UCE module 7.2005).
NAADs has continued to create farmers awareness and building their capacity to demand and
utilize improved technologies. This is being promoted through partnership with the private
sector to ensure sustained farmer’s access to the technologies. Such partnerships have been
created with FICA ltd, for cereal and vegetable crops, Uganda crop industries Ltd for
Cardamon spice, Buiga farm industries for vanilla processing and marketing. These
partnerships are aimed at developing farmer’s production potential through increased
exposure and exploitation of the technologies to benefit the farmers. The success of NAADs
therefore depends largely on the strength of private sector as service providers for the
demand services which must address farmer’s production constraints and subsequent increase
in their household incomes.
2.3. Relationship between internal audit and quality service delivery
2.3.1 Establishment of internal audit and consistence in quality service deliveryAn internal audit is an independent appraisal function established by management to review its
systems of internal controls as service to the organization to ensure that it achieves the set
objectives, (Millichamp, 2002). Its therefore management tool in evaluating its performance and
where there deviations collective actions is taken and this can achieved by recruiting qualified
personnel to ensure quality service delivery. Based on the current international practice, there
are three different system structures of establishment of internal audit units in a business
enterprise. In the first structure, the internal audit unit is established parallel to the Board of
Directors and is directed by the leader of the monitoring committee.
In comparison, under the second structure, the internal audit unit is established parallel to the
other departments in the company and is administered by the Board of Directors. Finally, with
the third structure, the internal audit unit is placed inside the finance unit, as internal auditing is
one of key functions of the finance department. Under the first structure, the internal auditors can
keep independence during the audit process as the internal audit unit can set up and do auditing
work without outside interference and any influences from other departments. Under the second
15
structure, the internal auditors’ independence is limited and it is difficult for internal audit unit to
audit the other departments at the same level. Under the third structure, it is obvious that the
internal auditors can hardly keep independence during the audit process because finance
department has financial supervisory function on its subsidiary and other departments and the
internal audit is also one function of finance department.
COSO, (1992) states that company management should continuously evaluate the effectiveness
of its internal controls. Roth, (2004) confirms further that frauds that caused the collapse of
Enron and World Com could not have risen from the non compliance with low level accounting
procedures. The root cause is always a breakdown in the control environment usually the ethical
climate and the behavior of executives.
2.3.2 Internal controls and reliability of quality service delivery.Management has to put in place internal control systems which should be seen to be working
effectively. It should involve controls on authorization of transactions guarding against misuse
and misappropriation of organizations resources. It is important for hosting service organizations
to have detailed and well-documented controls in place to ensure the safety and privacy of the
data being processed, stored and transmitted. Perhaps most notably, the requirements in section
404 of the US Sarbanes-Oxley Act of 2002 heighten the importance of SAS 70 audit reporting on
the effectiveness of internal control over financial reporting. A SAS 70 audit serves as an
indicator of transparency and accountability; it establishes a high level of commitment by the
service organization toward ensuring the reliability and security of its data by having its internal
controls and activities examined (via an in-depth audit of control, which often includes controls
over IT and related processes) by an independent auditing firm.
Thomas J Bell, (vol 3, 2011) Valerie, A Zeithamel, (vol 52 1988) quality occurs during delivery
of services usually during interaction between customer and contact personnel of the service
firm. For this reason service quality is highly dependent on the performance of employees,
organizational resource that cannot be controlled to the degree that component of tangible goods
can be revealed. According to V. John Peters, (1999), consistent quality can be maintained by
having a prime task to avoid negative quality while differentiating on positive quality.
16
Prior to audit planning, it is necessary that a thorough system review of the procedures and
controls be carried out. Given the size of the internal audit unit in each country it is difficult to
develop such expertise for all the systems. To streamline the development efforts, the concept of
developing a centre of excellence for each system has emerged. Under the concept, an internal
audit unit will be chosen as the centre of excellence for a particular system if the system has been
first developed or intensively used in that country, or alternatively the internal audit unit has
acquired the most up-to-date knowledge of the system Mike M.K. Chan, (1995). To achieve
uniformity in the role and performance of the internal audit function, operating guidelines need
to be laid down. Although too many rules would stifle the initiative to devise an audit approach
most suitable to the local conditions, it is believed that minimum requirements should be
introduced. These come in the form of an audit manual which defines the roles, objectives and
standards of performance for the internal audit function within the organization. Specific
guidance on the audit procedures, such as audit planning, audit programme implementation and
standards of audit working paper are laid down in the manual, Mike M.K. Chan, (1995).
According to the Standards for professional practice of internal auditors (SPPIA), (2002) internal
controls comprise, the plans and methods of the organization adopted to safe guard assets,
comply with laws and regulations, ensure the completeness and correctness of accounting data,
promote efficiency and encourage adherence to management policies. Katz, (2004) argues that,
to ensure the goals and objectives of financial institutions are properly met, the company will
achieve long profitability targets, and maintain reliable financial and managerial reporting, a
system of strong internal controls must be in place.
According to the statement on auditing standards (SAS), (2002) control activities are the policies
and procedures that help ensure management directives are carried out. Crawford, (2002) states
that recently, this has been the historical components of internal controls. Jago, (2005) asserts
that control activities can be categorized as authorization, segregation of duties, record keeping
and reconciliations and these controls depend greatly on the activity under consideration.
17
2.3.3. Financial reports and accessibility of staffOrganizations need to prepare financial reports which have to be verified by the internal audit to
enable compilation of final reports. It is through audit reports that management gets information
to enable them judge whether organizations resources were utilized efficiently and effectively
and these reports also shows the kind of person prepared them i.e. Whether is qualified
/unqualified. According to Ali Uyar, (2011), while some disclosed information on web sites is
audited such as financial statements, some information is unaudited. In order for the disclosed
information to be useful for the decision makers, it needs to be fair and free from bias.
In addition, managers may tend to engage in selective reporting such as disclosing some
Information while keeping others.
2.3.4. Conclusion In conclusion the role of internal audit in quality service delivery is difficult to determine.
However schools of thoughts viewed quality as conformance to specifications and fitness of
purpose.
18
CHAPTER THREE
RESEARCH METHODOLOGY
3.0. IntroductionThis chapter discusses the research methods in relation to internal audit and quality service
delivery in NAADs program. This gives the accounts of how the study was designed,
sampled and size of the population selected, data sources, data processing and analysis and
also highlights on the limitation of the study faced by the researcher.
3.1. Research designs.The research design was descriptive in nature based on the data collected from
questionnaires. The data that was collected was both qualitative and quantitative in nature
and this helped in deriving conclusions on the roles of internal audit in ensuring quality
service delivery.
3.2. Study populationThe survey included management, audits and accounts staff and the community members
who benefited from the services delivered by NAADs. The researcher believed that they had
the required information.
3.3. Sampling designThe researcher used purposive sampling while selecting respondents from the management,
audit and accounts staff. The researcher also used stratified random sampling while selecting
respondents from the community.
3.4. Sampling size.The researcher used 4 sub county coordinators, district coordinator,2 accounts assistants
finance department, CFO Kisoro district, district procurement officer, 3 internal auditors and
21 community members 3 members of executive committee, 6 leaders at parish level, 10
women, 2 disabled members. Total of 33 respondents will be interviewed.
19
Table showing sample size
Category Sample size
Management and staff
Community members
12
21
Total 33
Source; primary source
3.5. Sampling proceduresThe researcher used purposive method from management level including NAADs district
coordinator, sub county coordinators, community development officer, procurement officer,
audit and accounts staff. Respondents from community were selected using descriptive
method.
3.6. Data sources.Qualitative and quantitative data were obtained from the study through primary and
secondary sources.
3.61 primary sources of dataPrimary data was collected using interviews, administering of questionnaires and
observations.
3.62. Secondary source of data.Secondary data was collected using relevant documents and reports both internal and external
audits reports.
3.7 Data collection instruments. These will include self administered questionnaires, personal interviews, cameras and
documents research.
3.71. Personal interviewsInterviews were conducted formally and informally to gather relevant information.
20
3.72 Questionnaires All questionnaires were administered to the respondents. One was specifically for the
management and staff and other questionnaire for the community both structured and semi-
structured, use of open ended techniques were used.
3.8 Data processing and analysis.The data collected was processed for the purpose of establishing the response rate and also to
know whether the respondents answered questions appropriately.
Data was arranged and edited to identify errors and collections were made and all answers
were edited for accuracy. Data was entered into a computer system using Epidata software
and analysis was made manually using tables and descriptions and also involved use of
statistical tools on computer software like Ms Excel, SPSS to derive the relationship between
variables. This helped in drawing of conclusions and recommendations.
3.9 Procedures of the study.The study begun after getting an introductory letter from Makerere University which was
presented to the management of local government and NAADs coordinator for permission to
carry out the study.
3.9.1 Limitations of the studyThe following were the limitations encountered by the researcher
a) The researcher did not access some the NAADs documents like reports i.e. quarterly
and end of year reports which were taken as confidential.
b) The researcher was also faced with limited finance where by the actual expenditure
exceeded the budgeted expenditure which was difficult for the funder.
c) Limited information where by some of the respondents were fearing to give in
information thinking that I was sent by government for investigations.
d) Poor climate where by the place was too cold and it was rainy season which made had
for the researcher to administer questionnaires
21
CHAPTER FOUR
RESEARCH FINDINGS, INTERPRETATIONS PRESENTATIONS AND DISCISSIONS
4.0. IntroductionsThis chapter presents the results of the study, which has been analysed from the raw data
collected from the field and secondary data from organisations documents. This section presents
the results in reference to the research questions and objectives of the study, which involved;
Examination of functions of internal audit, the establishment of quality services delivered and the
relationship between internal audit and quality service delivery. The main tools used for the
analysis include the frequency, tables, pie chart, graphs, percentages analysed by use of
Epidata, SPSS and excel and through explanations. The respondents consist of management,
staff in audit and finance department and from the community. There were 12 respondents from
management and staff and 21 respondents from the community.
4.1. DEMOGRAPHIC CHARACTERISTICS OF COMMUNITY RESPONDENTSSection A sought to find out the characteristics of the respondents. The respondents are shown
below
4.1.1 Sex of the community respondentFigure 1: showing findings on sex of community respondents
Source: primary source
22
14,
67%
7,
33%
Male Female
The figure above shows that 67% (14 respondents) of the community respondent were male and
33% (7 respondents) of the community respondents were female. This implies that men are more
of beneficiaries than women in NAADs program and this contradicts with NAADs reports,
(2001/2002) whereby Gender issues had been mainstreamed within NAADS in two main areas to ensure that at least one third of farmer fora representatives are women, and including a component on gender in training and sensitization workshops.
4.1.2. Age of the community respondentsFigure2: showing findings on age of community respondents
20-25 26-31 32-37 38-43 > 440
5
10
15
20
25
30 28.57
14.29
4.76
23.81
28.57
Age group
%ge
age
Source: primary source
From fig;2 28.6% community respondents ranges between 20-25 years and above 44 years
respectively, 23.8% of the respondents ranges between 38-43 years, 14% of the respondents
ranges between 26-31 and 4.76% of the community respondents ranges between 32-37. This
implies that most of the respondents were 25 years and below and above 44 years.
23
4.1.3. Findings on marital status of the community respondentsFigure 3: showing findings on marital status of the community respondent
Single38%
Married62%
Source: primary source
From figure 3 above, 62 % of the respondents were married and as compared to 38% of the
respondents who were single. This indicates that most of the community respondents were
married implying that youth are less benefitting from NAADs program.
4.1.4. Findings on the highest educational levelThe findings on the highest level attained by the respondents are indicated in the figure below
Figure 4: showing findings on educational level of community respondents
Primary lvel Ordinary level Advanced level University level Others speccify0
5
10
15
20
25
30
35
40
45
9.52
23.81
14.29
38.1
14.29
24
Source: Primary source
Figure 4 above shows that 38% of the respondents completed university, 23.8% stopped in senior
four, 14.3% completed senior six, and 14.3% completed diplomas in different institution yet
9.5% stopped at primary level. This implies that most of the respondents who are beneficiaries of
the program are educated an implication that illiterate people are rarely benefiting.
25
4.2. OBJECTIVE ONE; COMPONENTS AND ROLES OF INTERNAL AUDIT This section discusses findings on roles and components of internal audit.
A scale of 0.5 was used on a radar where by 1=strongly disagree, 2=disagree, 3=not sure,
4=agree and 5= strongly agree
Figure 5. Showing findings on components and roles of internal audit
Segregation of duties is strongly practiced while processing transactions
Pre-Payment audit is carried out before payments are effected
Bank reconciliation statements are prepared monthly
The current staff is enough to handle all tasks of NAADS programme
The audit staff is qualified to handle all tasks in the organization
All departments are visited by the internal auditors quite regularly
The mandatory quarterly reports are produced by auditors
The recommendations in audit reports are implemented by the management
The audit reports contain all aspects of the organizationThe necessary books of accounts are available and used
Internal auditors verify accounting books of the organization including institutions
Financial statements are extracted from accounting books
Internal audit has helped greatly in quality service delivery
Internal audit is effective
Some audit regulations needs to be amended and others enacted
Internal audit has hindered effective delivery of quality services
Current internal function is good but implementers have made it not achieve its objectives
0
5
Source: primary source
From figure 5 above, two critical points were observed as can be seen. On average score of
2.22, it concluded that communities disagreed with internal audit hindering effective delivery
of quality services. This implies that internal audit has not had effect on the quality services,
26
however Harvey (2005, p. 273) argues that the internal quality procedures should be put in place to ensure quality service delivery. On average of 2.89
also indicates that community disagreed with the statement that current function is good but
implementers have made it not to achieve its objectives. This implies that current internal
function and implementers have been able to achieve its objectives.
At three critical points in the radar figure 3 above, the community however agreed on
average of 4.05, 4.15 and 4.0 of statements; some audit regulations need to be amended and
others enacted, financial statement are extracted from books of accounts and that internal
audit has helped greatly in quality service delivery respectively. All other responses are
ranging between average of 3.5 and 4. Respondents emphasized on audit regulations being a
mended and others being enacted and also to revise NAADS act. This actually indicates that
audit regulations have been hindering audit functions in quality service delivery. To achieve
uniformity in the role and performance of the internal audit function, operating guidelines
need to be laid down. Although too many rules would stifle the initiative to devise an audit
approach most suitable to the local conditions, it is believed that minimum requirements
should be introduced. These comes in form of an audit manual which defines the roles,
objectives and standards of performance for the internal audit function within the
organization Chan, (1995). According to Walker, (1996), the auditor should discuss
conclusions and recommendations at appropriate levels of management before issuing final
reports. Through ongoing discussion, “wash up” or “exit” meetings, actual audited review of
the audit report to clear up misunderstandings and misinterpretations of fact and allow
audited views of the reasonableness of findings and the feasibility of recommended.
4.3. OBJECTIVE TWO: FINDINGS ABOUT SERVICES DELIVERED BY NAADS PROGRAM4.3.1. Findings from community respondents
This section discusses findings on services delivered by NAADs program
A scale of 0.5 was used on a radar where by 1=strongly disagree, 2=disagree, 3=not sure,
4=agree and 5= strongly agree.
27
Figure 6: showing responses of the community on services delivered by NAADs in the sub counties of Muramba, Murora, Nyarusiza and Bukimbiri.
NAADS program exist in your areaI have ever heard of NAADS program
I have ever received services from NAADS
The quality of services provided was according to my expectation
I have benefited from NAADS programme
Services have helped in reducing poverty
Services are provided
Services provided reflect the value of money
Services provided are of high quality
Services provided are accessible to the community including vulnerable groupsThe staff honours their obligations to the community while rendering services
The performance of services is consistent
Staff responds to the household needs and demands
Employees are willing and ready to provide services
Community is participating in planning and good implementation of projects
Employees are competent to work
Employees are motivated so as to offer quality services
Community as well as technicians monitor service activities
Monitoring teams give feedback reports about the level of services
0
5
Source: primary data
From figure 6 above, two critical points were identified on average of 3.09 and 3.14 where
the respondents were not sure of whether the employees are motivated so as to offer quality
services and also whether services have helped in reducing poverty respectively. This implies
services have not had impact on poverty reduction which was one of its objectives.
However on average of 4.7 and 4.1, community respondents agreed that NAADs program
exist and services are provided though on average of 3.14, 3.19 and 3.7 respondents were not
sure of whether the services were accessible to the community, services provided were of
28
high quality and that services provided reflects the value of money However according to
value for money audit of NAADs report, (2006/2007) the quality of service provision was noted to have been affected by the lack of training for the service providers and their limitation in numbers and all other responses were
ranging between average of 3 and 4.5. This implies that services are accessed by only few
individuals mainly from my observation the rich are people accessing these services.
However all other responses were ranging between 3 and 4.5 respectively.
4.3.2. Findings from management and staff on roles and components of internal auditFigure 7: showing average scores on the roles and components of internal audit.
Segregation of duties is strognly practiced by management while processing transactionsPre-payment audit is carried before payments are effected
Bank reconciliation statements are prepared monthly
The current staff is enough to handle all tasks of NAADS programme
The audit staff is qualified to handle all tasks in the organization
All departments are visited by internal auditors quite regualrly
The mandatory quarterly reports are produced by auditors
The recommendations in the audit reports are implemented by management
The audit reports contain all aspects of the organizationThe necessary books of accounts are available and used
Internal auditors verify accounting books of the organization
Financial statements are extracted from accounting books
Internal auditors has helped greatly in quality service delivery
Internal audit is effective
Some audit regulations need to be ammneded and others enacted
Internal audit has hindered effective delivery of quality services
Current internal function is good but implementers have made it not to achieve its objective
0
5
Source: Quantitative data collected from Kisoro district
Scale used: (Strongly Agree = 5; Agree = 4; Not sure = 3; Disagree = 4; strongly
Disagree = 1)
29
As can be seen from Figure 7 above, two critical findings are observed. On an average score
of 2.25, it can be concluded that the management and staff disagreed with the premise that
internal audit has hindered effective delivery of quality services. This implies that internal
audit has not had any effect in hindering the effective delivery of quality services. An
average score of 2.75 also implies that the management and staff were actually not certain if
pre-payment audit is actually carried out before payments are effected.
At two points in the Radar on Figure 11 above, management and staff however agreed with
the following statements: a) the current staff is enough to handle all tasks of NAADS
programme; b) the audit staff is qualified to handle all tasks in the organization. All other
responses/scores ranged between 4.5 and 5 on average. Management and staff advocated for
amendment and enactment of some audit regulations indicated by an average score of 4.3.
4.3.3. Services delivered by NAADS programFigure 8: showing findings on Services delivered by NAADS programme
30%
36%
22%
12%
Category 1 Category 2 Category 3 Category 4
Source: primary source
From figure 8, the responses on services delivered by NAADs program were categorised
into 4 multiple responses as per the nature of the question, where by category 2 contributes
the biggest percentage of 36%, category 1 being second with 30% and category 3 and 4
contributing 22% and 12% respectively. These categories are explained by table 1 below.
30
Table 1: showing findings on services delivered by NAADS programme
Services delivered by NAADS
programme
Category 1 Category 2 Category 3 Category 4
Freq. %ge Freq. %ge Freq. %ge Freq. %ge
advising farmers on how to utilize land
properly 3 17.65 3 20
0 0 0 0
providing farmers with agricultural
pesticides 1 5.88 1 6.67
0 0 0 0
providing agricultural material inputs 8 47.06 2 13.33 0 0 1 33.3
sensitizing farmers on how to
effectively improve on production 2 11.76 2 13.33
1 14.29 0 0
training farmers on record keeping 1 5.88 0 0 1 14.29 0 0
advise farmers on proper storage 2 11.76 0 0 1 14.29 1 33.3
putting up demonstration farms and
providing advisory services 0 0 3 20
2 28.57 0 0
sensitization and mobilization of
beneficiaries 0 0 1 6.67
0 0 0 0
provide farmers with veterinary
services 0 0 1 6.67
1 14.29 0 0
provide market linkage at all levels 0 0 1 6.67 0 0 0 0
farmer institutional development 0 0 1 6.67 0 0 1 33.3
Exchange visits by farmers 0 0 0 0 1 14.29 0 0
Total 17 100 15 100 7 100 3 100
Source: primary source
From table 1 above under category 1, 17.65% of the responses that NAADs provides
advise to farmers on how to utilise land properly’, 5.88% responses from the community was
providing farmers with agricultural pesticides, 47.1% responses in category 1 was providing
agricultural material in puts, 11.76% of the responses in category 1 was sensitising farmers
on hw to effectively improve on production, 5.88% of the responses was training farmers on
record keeping, 11.76% was advising farmers on proper storage. This implies that NAADS
program mainly provides agricultural inputs as per NAADs report 2006/2007.
Under category2, 20% responses was advising farmers on how to utilise land properly,
13.33% was proving agricultural inputs, 13.33% was sensitising farmers on how to
effectively improve on production, 6.67% was proving farmers with agricultural pesticides,
31
20% was putting up demonstration farms, 6.67% was sensitisation and mobilisation of
beneficiaries, 6.67% was providing farmers with veterinary services, 6.67% was to provide
farmers with veterinary services and 6.67% was farmer institutional development. This
implies that in category 2, the NAADS program mainly provides advice to farmers on how to
utilise land properly and also putting up demonstration farms.
Under category 3, 14.29% was on how to effectively improve on production, 14.29% as
training farmers on recording keeping, 14.29% was advising farmers on record
keeping,28.57% was putting up demonstration farms, 14.29% was providing farmers with
veterinary services and 14.29 was exchange visits by farmers. This implies that in category 3
NAADs mainly is involved inputting up demonstration farms.
Under category 4 for as per table 1, three responses were captured in addition to those in
either category 1, 2 or 3. All these responses (providing farmers with agricultural pesticides,
advise farmers on proper storage and farmer institutional development) were cited as services
delivered by NAADS program each estimate at 33.3%. Farmer institutional development is
one of the components through which NAADs manages its program by providing
opportunities for empowerment through participation and in decision making NAADs report,
(June, 2008).
In conclusion the findings above indicates that community members receive services in form
of agricultural inputs like seeds and livestock animals, advise on how to utilise land properly
and advise on proper storage from NAADS program.
32
4.3.4. Challenges faced by internal auditorsFigure 9: showing findings from the community respondents on challenges faced by internal auditors
38%
47%
15%
Category 1 Category 2 Category 3
Source: primary source.
From figure 9 above, respondents gave multiple responses as per the question and were
categorised into 3 with category 2 contributing highest percentage of 47%, category 1
contributing 38% and finally category 3 with 15% and these categories are explained by table
2 below.
Table 2: showing findings on challenges faced by internal auditors
Challenges faced by internal auditors
Category 1 category2 category3Freq. Percent Freq. Percent Freq. Percent
inaccessibility of information 3 37.5 0 0 0 0language barrier 1 12.5 0 0 0 0poor road network 2 25 2 33.33 0 0insufficient funding 1 12.5 0 0 1 50poor communication network 1 12.5 1 16.67 0 0poor record keeping 0 0 1 16.67 0 0uncooperative staff 0 0 1 16.67 0 0policies keeps on changing 0 0 1 16.67 1 50Inadequate facilities like computers 0 0 0 0 0 0Total 8 100 6 100 2 100
Source: primary source
33
From the table 2 above, multiple response were captured under different categories where by
37.5% of category 1 responses was about inaccessibility of information, 12.5% was about
language barrier, 25% was about poor road network, 12.5% was about insufficient funding
and the remaining 12.5% was about poor communication network. This implies that the
respondents under category 1 emphasised on inaccessibility of information as one of major
challenges faced by internal auditors.
Under category 2, 33.33% responses were about poor road network, 16.67% responses were
about poor communication network, 16.67% about poor record keeping, 16.67% about
uncooperative staff and remaining 16.67% about policies that keeps on changing. This
implies that under category 2 poor road network is the major challenge faced by internal
auditors.
Under category 3 responses were captured in addition to category 1 and 2. Both two
responses of insufficient funding and policies that keeps on changing were estimated at 50%
each.
In conclusion as can be seen above, the most challenges faced by auditors is the
inaccessibility of information and poor road network with the highest percentage in both
category 2 and category 1. This not only can be faced by auditors but also inadequate
facilities to help them while preparing final reports.
34
4.3.5. Findings on how internal audit has helped greatly in quality service deliveryFigure 10: showing responses by the community on how internal audit function has helped in quality service delivery.
42.3729
46.6102
.847458
4.237295.9322
010
2030
4050
perc
ent
sum of Category1 sum of Category2sum of Category3 sum of Category4sum of Category5
Source: primary source
From figure 10 above responses were categorised into 5, with 46.6% of responses in category
2, 42.4% in category 1, 5.9% in category 5, 4.2% in category 4 and 0.8% of responses in
category 3. These categories are explained by the table3 below.
35
Table 3: showing findings on how internal audit function has helped in quality service delivery.
how I internal audit function can help make
quality service delivery efficient
category 1 category2 category3 category4 category5
Freq. %ge
Freq
. %ge Freq. %ge Freq. %ge Freq. %ge
taking into account proper accountability and
transparent procurement of agricultural
inputs 2 22.2 0 0 1 100 0 0 0 0
involving local communities in their
dealings 1 11.1 0 0 0 0 0 0 0 0
monthly audit of all projects 1 11.1 1 14.3 0 0 0 0 0 0
Availing auditors with enough facilities that
efficiently help auditors. 1 11.1 0 0 0 0 0 0 0 0
improving on road network 1 11.1 1 14.3 0 0 0 0 1 100
sensitizing mass about planning,
implementation 1 11.1 0 0 0 0 1 100 0 0
reporting those areas where funds are misuse
funds 1 11.1 0 0 0 0 0 0 0 0
Communication should be made about
auditing should be made one week earlier. 1 11.1 3 42.9 0 0 0 0 0 0
Improving on internal departmental
relationships 0 0 1 14.3 0 0 0 0 0 0
keeping proper and consistent records 0 0 1 14.3 0 0 0 0 0 0
continuous training to improve of audit staff 0 0 0 0 0 0 0 0 0 0
Total 9 100 7 100 1 100 1 100 1 100
Source: primary source
As per figure 5 above, out of 42.4% responses of category 1, 22.2% was about taking into
account proper accountability and transparent procurement of agricultural input as well as
100% responses in category 3, 11.1% responses was about involving local communities in
their dealings, 11.1% was about monthly audit of all projects, 11.1% was about availing
auditors with facilities that can help them do their work efficiently, i11.1% was about
improving on road network, 11.1% was about sensitising mass about planning and
implementation, 11.1% was about reporting those areas where funds are misused and the
36
remaining 11.1% was about communication should be made about auditing should be made
one week earlier. This implies more of the respondents’ ideas about how internal audit can
help make quality service delivery more efficient was taking into account about proper
accountability and transparent procurement of agricultural input.
Out of 46.6% of category 2, 14.3% was about monthly audit, 14.3% was improving on road
network, 42.9% was communication should be made about auditing one week before, 14.3%
was about improving on internal departmental relationships & the remaining balance of
14.3% was keeping proper and consistent records. In addition to category 1 2 and 3 other
responses were also given including (sensitisation about planning and implementation,
improving on road network) with each contributing 100% per category. In conclusion using
findings as can be seen from figure 5 and table 3 above, it indicates that internal audit can
help make quality service delivery efficient by taking into account proper accountability and
transparency of procurement of agricultural inputs. However NAADs annual report,
2001/2002 attributed poor quality of service provision to lack of training for the service of
providers.
4.3.6 Challenges faced in NAADS programFigure 11; showing findings on challenges faced by NAADs program
28.784626.8657
29.6375
10.8742
3.83795
010
2030
perc
ent
sum of v46 sum of v46asum of v46b sum of v46csum of v46d
37
Source: primary source
From figure 11 above, multiple responses were given and the findings were categorised into
5 where by; Sum of v46 represents category 1, sum of v46a represents category 2, sum of
v46b represents category 3, sum of v46c represents category 4, and sum of v46d represents
category5.
With category 3 taking the highest percentage of 29.6%, category1 with 28.8%, category 2
with 26.8%, category 4 with 10.8% and category 5 with the least of 3.84% and these are
explained by table 4 below.
Table 4: showing findings on challenges faced in NAADS program.
Challenges faced in NAADS program
category 1 category 2 category 3 category 4 category 5Freq. %ge
Freq. %ge Freq. %ge Freq. %ge Freq. %ge
illiteracy/permittivity of community members 2 12.5 3 21.4 0 0 0 0 0 0a lot of bureaucracy in NAADS offices 1 6.25 0 0 0 0 1 20 0 0unfair distribution of services 2 12.5 2 14.3 0 0 0 0 1 50corruption and embezzlement of funds 1 6.25 1 7.14 0 0 0 0 0 0inadequate funding 6 37.5 0 0 1 9.09 2 40 0 0Climatic changes leading to poor harvests. 1 6.25 0 0 0 0 1 20 1 50inputs are not given in the right time 1 6.25 0 0 0 0 0 0 0 0
pests and diseases 1 6.25 0 0 0 0 1 20 0 0
procurement process is too hard for the farmer who didn’t go to school as every thing is done in English 1 6.25 0 0 0 0 0 0 0 0negligence of farmers 0 0 1 7.14 1 9.09 0 0 0 0lack of transparency by NAADS officials 0 0 2 14.3 0 0 0 0 0 0land shortage 0 0 2 14.3 0 0 0 0 0 0poor road network 0 0 1 7.14 1 9.09 0 0 0 0little or no fringe benefits to motivate workers 0 0 1 7.14 1 9.09 0 0 0 0un timely season i.e. farmers are given services when its too late 0 0 1 7.14 0 0 0 0 0 0Poor requisition record keeping 0 0 0 0 1 9.09 0 0 0 0poor quality of services 0 0 0 0 1 9.09 0 0 0 0limited staff to effectively reach out to the farmers 0 0 0 0 1 9.09 0 0 0 0the mode of payments to the suppliers 0 0 0 0 1 9.09 0 0 0 0limited pesticides and other inputs 0 0 0 0 1 9.09 0 0 0 0price fluctuations 0 0 0 0 1 9.09 0 0 0 0lack of NAADS guides lines 0 0 0 0 1 9.09 0 0 0 0Total 16 100 14 100 11 100 5 100 2 100
38
Source: primary source
From table 4, as per question about challenges faced by NAADS program multiple responses
were given and these were categorised as per figure 6 with inadequate funding taking the
highest percentage of 37.5%, 12.5% each for illiteracy and primitivity of farmers and unfair
distribution of services. The remaining responses in category 1 of bureaucracy in NAADS
offices, corruption and embezzlement of funds, pests and diseases, climatic changes and
procurement process being too hard each contributes to 6.25% of category 1. This implies
that it’s inadequate funding of the program that is influencing its success.
category 2 comprised of 26.8% of responses and of these illiteracy and primitivity of farmers
contributes 21.4% , unfair distribution of services contributes 14.3%as well as lack of
transparency in NAADS offices and land shortage, corruption and embezzlement contributes
to 7.14% as well as negligence of farmers. Poor road network, little /no fringe benefits to
motivate workers each contributes to 7.14% of category 2.
In addition to category 1 and 2, in category 3 11 responses were captured each estimated at
9.09%. However category 4 four responses of (inadequate funding, bureaucracy in NAADS
offices, pests and diseases, climatic changes) were captured with inadequate funding
contributing to 40% and the rest of the responses contribute to 20% each. Two responses in
category 5(unfair distribution of services and climatic changes) were captured and each
contributing 50%.
In conclusion as can be seen from figure 6 and table 4, category 1 has the most challenges
that affect NAADS program inadequate funding being the top most of all with the highest
percentage of 37.5% and also being the most common response in three categories. This
implies that its inadequate funding of the program that influences its operations accompanied
by corruption and embezzlement of funds and in NAADs report 2001/2002 these challenges
were seen as the most influential in the program.
39
4.3.7. What government should to ensure quality service delivery
4.3.7.1 Findings from the communityFigure 12: showing responses from the community and findings on what government should do to ensure quality service delivery.
37.594
28.3208
16.5414
13.7845
3.7594
010
2030
40pe
rcen
t
sum of v47 sum of v47asum of v47b sum of v47csum of v47d
Source: primary source.
As can be seen in figure 12, sum of v47 represents category1, sum of 47a represents
category2, sum of v47b represents category3, sum of v47c represents category4, and sum of
v47d represents category5.
As per question of what government should do to ensure quality service delivery, multiple
responses were captured with category 1 contributing 37.6%, category2 contributing 28.3%,
category 3 contributing 16.5%,category 4 contributing 13.8% and 3.7% for category five.
These categories are explained by table 5 below.
40
Table 5: showing findings on what government should do to ensure service delivery
What government should do to ensure quality service delivery
category 1 category 2 category 3 category 4 category 5Freq %ge freq %ge freq %ge freq %ge freq %ge
improving on monitoring and investigation to avoid distortion of funds 3 18.75 2 16.7 0 0 0 0 0 0Involving local farmers in the service delivery. 1 6.25 0 0 0 0 0 0 0 0continuous advise to the farmers to avoid misuse of NAADS services 1 6.25 1 8.33 1 16.67 0 0 0 0decentralization of service support to grass root level 1 6.25 0 0 0 0 0 0 0 0adequate allocation funds 2 12.5 2 16.7 2 33.33 0 0 0 0improving on staff through training and seminars 1 6.25 0 0 0 0 0 0 0 0devise means of payments to the 1 6.25 0 0 0 0 0 0 0 0revising procurement process for 1 6.25 0 0 0 0 0 0 0 0increasing on facilitation of NAADS monitors 2 12.5 1 8.33 0 0 0 0 0 0Supply of agricultural inputs like pesticides and fertilizers. 1 6.25 0 0 1 16.67 0 0 0 0poor people being considered first 1 6.25 1 8.33 0 0 0 0 0 0Employing qualified personnel 1 6.25 0 0 0 0 1 25 0 0
Conducting research in other successful programs. 0 0 1 8.33 0 0 0 0 0 0allow farmers to monitors themselves and give reports to the authorities’ 0 0 1 8.33 0 0 0 0 0 0providing linkage to the market 0 0 2 16.7 0 0 0 0 0 0allowing farmers to participate in decision making and evaluations 0 0 1 8.33 0 0 0 0 0 0improving on infrastructures 0 0 0 0 1 16.67 1 25 0 0increasing on healthy and veterinary services 0 0 0 0 1 16.67 0 0 0 0strong punishment to officials who swindle government funds 0 0 0 0 0 0 1 25 0 0regulating prices of agricultural inputs 0 0 0 0 0 0 1 25 0 0reducing on the taxes imposed on fuel and other agricultural inputs 0 0 0 0 0 0 0 0 1 100Total 16 100 12 100 6 100 4 100 1 100
Source: primary source
41
From table 5, responses were categorised as per figure 7. It can be seen on average that in
category 1, improvement on monitoring and investigation to avoid distortion of funds
contributes to the highest percentage of 18.75% followed by 12.5% of increasing facilitation
of NAADS monitors and the rest of responses of devise means of payments to the suppliers,
involving local farmers in service delivery, continuous advise to the farmers to avoid misuse
of NAADS services, decentralisation of service through grass root level, supply of
agricultural inputs like fertilizers, and employing of qualified personnel all were cited with an
estimate of 6.25%. The respondents emphasised on the continuous monitoring and making
more investigations as the way to deliver quality services.
As can be seen in the table 5, in category 2 twelve responses were captured with the
statements of ( providing farmers with market linkage, adequate allocation of funds and
improving on monitoring and investigation to avoid diction of funds) having the highest
percentage of 16.7% each and other 9 responses as indicate in the table 5 each having
8.33%.
In category 3 five responses were captured in addition to those in category 1 and 2 with
adequate allocation of funds contributing the highest of 33.33% and the rest of; continuous
advise to farmers to avid misuse of NAADS services, supply of agricultural inputs to like
fertilizers and pesticides, improving on infrastructures and improving on healthy and
veterinary services contributing 16.67% each.
In addition to the above three categories, more four responses were captured in category 4
each having 25% and in category 5 one response was captured contributing 100% of the
response in this category.
From the observation above in figure 7 and table five it can be concluded that for delivery of
quality services, government needs to improve on monitoring and investigation of the
program to avoid distortion of funds and also to increase on funding of the program in order
to efficiently deliver quality services.
42
4.3.7.2 Findings from the management and staffTable 6: showing findings from the management and staff about what the government should do to ensure quality service.
what should government should do to ensure quality service Freq. Percent
continuous monitoring 3 13.0
going back to the old way of doing things 1 4.3
decentralized procurement 1 4.3
empower village banks 2 8.7
Government should bring back tender boards to manage local
government projects in procurement process. 1 4.3
Government should increase on funding. 1 4.3
technology tracking 1 4.3
improving on transport means or infrastructure 3 13.0
decentralized procurement 1 4.3
increasing on the incentives of implementers 3 13.0
reducing on political influence in the program 2 8.7
improving on agro-processing 1 4.3
targeting people who have where to start from 2 8.7
allowing staff to benefit from the program 1 4.3
Total 23 100.0
Source; primary source
From table 11 above, it can be observed that of the way for government to ensure quality
service delivery, continuous monitoring, improving on transport means or infrastructures and
increasing on incentives of implementers with the highest of 13.0% each respectively. Also
empowering village banks, reducing on political influence and targeting people who have
where to start from can help in ensuring quality service delivery with percentage of 8.7%
each respectively.
The remaining percentage of 4.3% each was contributed: allowing staff to benefit from
NAADs program, improving on agro-processing, decentralised procurement, technology
tracking, increasing on funding, bringing back tender boards to manage Local government’s
projects, decentralised procurement, and going back to the old way of doing things.
43
4.4. Demographic characteristics of management and staff
4.4.1. Sex of management and staffFigure 12: showing findings on sex of the management and staff respondent
Male83%
Female17%
Source: Quantitative data collected from Kisoro district
As can be seen from Figure 12 above, majority of the respondents that participated in the
survey of Management and staff were men estimated at 83% compared to their female
counterparts estimated at only 17%
4.4.2. Age of management and staffFigure 13: showing findings about the age of the staff respondents.
33%
42%
25%
26-31 38-43 44-49
Source: Quantitative data collected from Kisoro district
44
From the above, figure 13 indicates that most of the staff members ranges between 38-43
with the highest percentage of 42%, followed by 33% who ranges between 26-31 and finally
25% of the respondents ranges between 26-31. This implies that most of the staff members
are mature.
4.4.3. Education level of management and staff
Figure 14: showing findings about Educational level of the management and staff
Source: Quantitative data collected from Kisoro district
Figure 14 shows findings about the level of education and it indicates that 58.33% of
management and 16.67% completed tertiary institutions, 8.33% did diplomas from different
institutions, 8.33% finished secondary level and primary level mainly chairpersons of
farmers’ forum. This implicates that most of the staff members are degree holders and
diploma holders.
45
Primary
Ordinary lev
el
Tertiary
institution
Universi
tyOther
010203040506070
8.33 8.3316.67
58.33
8.33
4.4.4 Marital status of management and staffFigure 15: showing findings on marital status of management and staff
Single25%
Married75%
Source: Quantitative data collected from Kisoro district
As per the figure 15 above, the responses indicate that 75% of the management and staff are
married as compared to 25% of those who are not married. This implies that NAADs staff is
dominated by married people with highest percentage as compared to those who are not
married.
46
4.4.5. Positions occupied by management and staff Table 7: showing findings on positions occupied by management and staff in local government and NAADs program
Position in local
government Freq.
Percen
t
Top level management 1 10
Middle level management 8 80
Operational level
management 1 10
Total 10 100
Position in NAADS
Sub county coordinator 4 44.44
Group leader 1 11.11
Other 4 44.44
Total 9 100
Source: Quantitative data collected from Kisoro district
As can be seen in table 7, 80% of the staff at local government occupy middle level
management and the rest of 20% occupy top level and operational level management each
contributing 10%. 80% of middle management includes auditors, accountants, CFO and
district NAADs coordinator.
However 44.44% of the respondents occupy positions as NAADs coordinators, 44.44%
include accountants at the district level, auditors, and CFO Kisoro district. The remaining
11.11% is occupied by group leaders both at the sub county level and the district level.
47
4.4.6. Positions held in local government and years of employmentTable 8: showing findings on years of employment by management and staff and position held in the local government
Position in local
government
Years of employment
3 - 5 years 6 - 9 years > 10 years Total
Top level management 1 (14.3%) 0 (0.0%) 0 (0.0%) 1 (14.3%)
Middle level management 2 (28.6%)
1
(14.3%) 3 (42.9%) 6 (85.7%)
Total 3 (42.9%)
1
(14.3%) 3 (42.9%) 7 (100%)
Source: Quantitative data collected from Kisoro district
From table 8, Majority (42.9%) of the respondents (management and staff) that participated
in the survey had worked with the local government for more than ten years and these were
middle level managers. A slightly high proportion of 42.9% had so far worked with the local
government for three to five years and these were top level management estimated 14.3%
and middle level management estimated at 28.6%
Figure 16: showing average score of management and staff on services delivered by NAADs program
48
Services are provided
Services provided reflect the value of money
Services provided are of high quality
Services provided are accessible to the community
The performance of the services are consistentThe staff honour their obligations while rendering services
The staff respond to household needs and demands
Employers are willing and able to provide services
Communities participate in the planning and implementation of NAADS programme
0
Source: primary data
From figure 16 above, major critical findings were identified. On average score of 4.25, the
respondents agreed that services are provided and that communities participate in planning
and implementation of the program. On average score of 3.7 and 3.83, the respondents also
agreed with the statements that services provided reflects the value of money and that
services provided are of high quality. This implies that from the observation that staff and
management have tried their best to deliver quality services as shown by the figure above
4.4.7. Books of accounts kept Table 9: showing findings on books of accounts kept in NAADS program both at the district level and sub county level
Books of accounts kept Freq.
Percen
t
cash book 8 25
bank statements 2 6.3
Vouchers 2 6.3
Ledgers 5 15.6
vote books 6 18.8
49
1 .519*.019
20 20.519* 1.019
20 21
Correlations
Pearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)N
Internal audit
Quality service delivery
Internal audit
Quality Service
Delivery
Correlation is significant at the 0.05 level (2-tailed).
*.
Abstracts 5 15.6
Registers 4 12.5
Total 32 100
Source: primary source
Table 9 above shows that of the books kept by NAADs, 25% are cash books,18.8% vote
books, 15.6% ledgers and abstracts each, 12.5% books kept are registers and bank statements
and vouchers each estimated at 6.3%. This implies that books of accounts are indeed kept
and available for audit with cash book taking the highest percentage.
4.5. OBJECTIVE THREE. RELATIONSHIP BETWEEN INTERNAL AUDIT AND QUALITY SERVICE DELIVERY The Pearson correlation statistic (r) was used to test the relationship between internal audit
and quality service delivery. These results are as shown below
Table 10: showing relationship of internal audit and quality of service delivery in NAADS
Source. Primary source
The Pearson results reveal significant positive relationship between the internal audit and
service delivery (r=0.519*, sig=0.019). The Pearson implies that more efforts should be
channelled to improving internal audit function of internal controls, public procurement and
accountability, financial reporting and value for money to better the quality of services to the
community. According to Millichamp, (2002) internal audit is management tool in evaluating
50
its performance and where there deviation actions are taken that is where services provided
are not consistence and reliable then the problem could be internal auditors that may be
incompetent due to lack of skills and knowledge and therefore may need to recruit qualified
auditors to improve on internal audit to ensure quality service delivery.
However Dillinger.B, (1995), argues that the available evidence as constraints to improved
service delivery is not merely one of the resource availability but others particularly
institutional arrangements of service delivery. He asserts that there is lack of clear incentives
to the personnel in the service delivery industry and lack of clear reward for performance and
all lead to inefficiency and under deployment of resources.
4.6. Challenges faced by internal audit while rendering quality servicesA number of challenges were pointed out as the ones affecting the smooth operations of
internal audit in their effort to provide quality services to the community.
a) There was a general consensus of the respondents that the current organisational
structure of local government and NAADs is rigid; implying that there is a need to
recruit more audit staff. This is as a result of limited staff due to work overload
resulting into poor quality service delivery.
b) In accessibility of some areas. Most of the beneficiaries of NAADs are scattered in
far away sub. counties which are in accessible to reach due to the terrain of those
areas like Bukimbiri sub county head quarters are located very far from district yet
even roads are poor most especially during rainy season hence distorting the work of
auditors.
c) Poor facilitation of staff is also another problem faced by internal audit. Due to
inadequate facilities like few computers it becomes hard for internal auditor to
prepare reports and deliver them in time and this therefore affects the quality of
services to be delivered.
51
d) There have been reported cases of political influence in the work of internal audit.
For example influencing on the award of tenders of supplying agricultural inputs
internal audit while trying to reveal the misallocation or misuse of funds on several
occasions have been bribed by the culprits and this has affected the quality of
services delivered.
e) Wide fraud and corruption with limited powers of internal audit of prosecution and
redress is also another challenge faced by internal audit. Since internal audit is the
key to financial accountability, it should play a key role over NAADs finances.
However this makes them popular but also creates enemity and is constrained by
limited powers, resources and lack of cooperation from other department.
f) Recommendations of internal audit in the audit reports are not implemented and this
leaves the affected persons free. Legal powers do not give the internal auditor
enforcement such as the power to seek recovery or power to surcharge officers in
case of fraud, negligence/mismanagement and power to disallow expenditure.
Therefore they are limited to identification and have no power to deal directly with
corrupt officials.
4.7. Ways of addressing the challenges affecting the quality servicesThere measures that have been put in place to address the challenges. According to local
government act section sub section 4.5, measures were put in place and these included;
a) On political influence, the district should continuously organise seminars or work
shops for the staff where their roles are clearly identified. For internal audit there is
protection by local government act, protecting serving public officers. Under LGFAR
(1998), the internal auditor communicates to the senior auditor and ministry of local
government
b) The funding of internal auditors is made quarterly to ease their facilitation to the
field. The transport problem can be alleviated by procuring of more motorcycles and
also to increase on cooperation between all departments in case vehicles are needed.
c) The staff also is encouraged to upgrade their qualifications for professional courses
such as ACCA and CPA.
52
d) In case of backlog of audit function, the sub section assigns staff in finance duties to
especially inspection of sub county books of accounts .Also Local government
structure has provided for the examination section in finance department which will
handle the examination of accounting document s leaving internal audit to handle the
field visits
e) There should be reviewing policies governing NAADS officers so as to fit in the
current financial regulations.
CHAPTER FIVE
SUMMARY CONCLUSIONS AND RECOMMENDATIONS
5.0. Introductions This is the last chapter of the study of the study, which presents the final aspects of the
research study. Presented here are summaries to the findings, conclusions and the various
recommendations that have been put forward to enhance quality service delivery.
5.1. Summary of findings
5.1.1 Components and roles of internal auditThe study looked at the components and roles of internal audit, and quality of services
delivered by NAADS program and how they are related. It was established that internal audit
plays a key role in quality service delivery to the communities.
53
For communities to enjoy quality services in NAADS, amendments of audit regulations
/revision of audit regulations for example carrying out pre and post audit can help in delivery
of quality services. Equipping auditors with enough facilities and skills through seminars
and also enough transport means like enough motor vehicles to rich out far areas.
5.1.2 Quality service deliveryIt was established that communities participate in planning and monitoring of service
activities. However it was noted that of the quality of services delivered is not according to
their expectation and this may be attributed to centralize procurement that is to say
procurement being done at the district level and sub county level instead of doing it at village
level. It is also attributed to unfair distribution of services and inadequate funding.
It was pointed out that internal audit faces considerable challenges that do not enable them
offer the expected quality services. Challenges like inaccessibility of some areas, inadequate
staff, high operational costs, political interference affect the performance of internal audit.
5.1.3. Relationship between internal audit and quality of service deliveryIt was established that there is there is appositive relationship between internal audit and
quality of service delivery as shown by correlation 0.519* and significance of 0.019 this
means that more efforts should be channeled to uphold the internal audit function for the
community to access quality services.
5.2. Conclusion The study has been a survey of the components and roles of internal audit towards quality of
service delivery. The study focused on staff of NAADS program at the district level and sub
county level and the community in sub counties of Murora, Muramba,Nyarusiza and
Bukimbiri sub county.
54
5.2.1 Components and roles of internal audit. Internal audit was found out having number of roles which included reviewing internal
control systems, preparation of quarterly reports to council, public accountability and value
for money. Internal audit was found lacking adequate resources both human and financial
appropriate qualifications and skills, limited by political interference and insecurity,
5.2.2 Quality of services deliveryThe services offered by NAADs were found out as providing agricultural inputs like seeds,
livestock animal’s e.g. Fresian cows, goats and sheep mainly local breeds, training farmers
on record keeping, setting up demonstration farms and providing market linkage for
agricultural produce. However the services delivered have got factors that affect its delivery
which include; inadequate funds, unfair distribution of services where by the rich people are
favored first leaving behind the poor, limited staff to effectively reach out farmers,
primitivity of community members, inaccessibility of some area, poor road network and land
shortage.
5.2.3. Relationship between internal audit and quality of service deliveryIn conclusion, if internal audit is for better quality of service delivery more effort should be
channeled towards improving internal audit functions. The government should be put on
pressure to revise NAADs regulations to fit in current financial regulations and also to revise
some audit regulations like carrying out pre and post audit. Government should bring back
tender boards to manage local government in procurement processes of goods and services
because contracts committees are full of civil servants, who favor themselves. There should
be continuous reporting of those found guilty in terms of distortion of funds and also
continuous research about services that are being delivered by NAADs program.
5.3. RecommendationsThere various recommendations drawn from the study of which include;
55
5.3.1 Recommendations on roles of internal audita) There should be revision of audit regulations. This should be done by doing pre
audit that is before payment is effective and post audit i.e. after payment is done to
avoid misallocation of funds.
b) Audit department should be equipped with enough facilities that will simplify their
work. These should include motorcycle to ease accessibility of far areas (some sub
counties are in remote areas), computers to ease production of reports and guard on
confidentiality.
c) Organizing short courses to refresh the staff of internal audit and finance. This will
help them upgrade on the current changes in the discipline of auditing and accounting
regularly.
d) Review of NAADs organizational structure as well as local government
organizational structure should be done. This will give them opportunity to choose
the number of staff that may be adequate to handle their tasks.
e) Management of NAADs should put in place stringent rules and penalties for those
who violate internal control systems.
5.3.2. Recommendation on quality service deliverya) There should be improvement in monitoring and investigation of the program by
government officials to avoid distortion of funds.
b) Farmers should be allowed to participate in procuring of agricultural inputs since they
are the ones to choose among which quality is.
c) Internal auditors needs to build a high level of service quality consistently in that with
time this consistency will lead to community confidence, involvement in planning
and participation in implementation of service activities.
d) NAADs staff contributes a lot to quality service delivery, therefore deserve high level
of motivation by giving them fringe benefits and creating for them good working
environment since little motivation may lead to poor service delivery.
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5.3.3. Recommendations on the relationship between internal audit and quality service delivery One the major objective of NAADs program is poverty reduction through extension of
quality services to the community. Its important to internal audit exhibits a high level of
quality service delivery regardless of any circumstances that may prevail in the organization.
5.4. Suggested areas for future researchThe researcher suggested the following as areas of future;-
a) The major aspect to research about is the impact of service delivered by NAADs on
poverty levels in Kisoro district.
b) A bigger geographical area than one covered would make the study more
comprehensive. This would cover the entire program in all sub counties
c) Also another aspect for future research is studying of other variables not covered like
climatic changes, human resource i.e. training, management style and organizational
structure and how they affect the success of NAADs in its delivery of services.
d) The attitude of the community towards NAADs program should also be another
aspect to be researched on in future.
e) More research should also be done in other sectors about quality being delivered by
the government like education sector and healthy sector
The conclusion revealed would yield a valuable source of information for policy
formulations. It would also provide a clear undertaking of service quality for all aspects of
the organization and local government at large.
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REFERENCESAtt wood, F.A and Neil D.S. (1986), De Paul’s Auditing (7th edition). London, pitman.
Bilali A. (1996) Information about standard on quality assurance and Metrology in Uganda un published Desertation, MUK, Kampala
Chun, C (1997) Functions and Objectives of internal audit and Underlying conditions managerial auditing journal 14(81)
Dale G.B, (1994) Managing Quality 2nd edition published in prentice hall London.
Douglas, (1995). Computer Audit and Control London sounders
Economic Analysis paper-// 3.4.3, Planning Management and Implementation of local government.
58
Glover. F, (2000) Analytical procedures and Audit planning decisions in auditing, journal of practice and theory 19 (2)
Goodwin, S (2004). A comparison of internal audit in private and public sectors. Managerial, auditing journal, 19(5).
Http// college.hmco.com
Harley D.C, Micken, J.M.Jr, (1990) Decentralized Operational Auditing. The effective use of internal audit Mid Atlantic journal of business vol: 26 Iss: 2 1990 (pp.81-89)
Koontz (2001) Essential of management 5th edition tata mcgraw hill publishing new Delhi
Local Government financial and accounting regulations, (1998)
Local Government act 1997
Local Government Internal Audit Manual, 2007
Local government Financial and Accounting manual, (2007)
Millichamp, (2002) Auditing, 8th edition continuum tour building London.
NAADs act 2001
NAADs report may, 2007
Oakland J.S, (1997), Cases in Total Quality Management
Parasuraman, A.; V.A. Zeithaml and L.L. Berry, (1988); “SERVQUAL: A Multiple-item
Scale for Measuring Consumer Perceptions of Service Quality,” Journal of Retailing
vol. 64, issue 1
Stoner S.A.F management 6th edition prentice hall international new jersey London
Thomas J Bell vol3 (2011), The Assimilation of Marketing’s Service Quality Principles and
the IT Auditing Process
V. John Peters, (1999),"Total service Quality management", Managing Service Quality,
Vol. 9 Iss: 1 pp. 6 -12.
Helena Forslund, (2007),"Towards a holistic approach to logistics quality deJournal of
Quality & Reliability Management, Vol. 24 Iss: 9 pp. 944 – 957
59
Mike M.K. Chan, (1995),"Achieving audit uniformity out of diversity: a case study of an
internationals bank", Managerial Auditing Journal, Vol. 10 Iss: 4 pp. 44 - 48
APPENDICES
RESEARCH QUESTIONIARES
ANNEX 1
QUESTIONIARE S TO BE FILLED BY THE MANAGEMENT AND STAFF OF LOCAL GORVENMENT / NAADS PROGRAM.
Dear respondent,
I am called Mwubaha Doreen a final year student at Makerere University offering Bachelors degree in Commerce (accounting option). The questionnaire is designed to collect information aimed at finding out the effect of internal audit on the quality services delivered by NAADS program. The questionnaire therefore is designed purely for academic purposes and any information provided will be strictly for the award of Degree in bachelors of commerce.
60
I therefore kindly request to respond to these questions to the best of your knowledge and your response will be highly appreciated
SECTION A [FILL IN THE SPACES PROVIDED]
Name of the respondent………………………………………………………..
Sub county……………………………………………………………
Parish…………………………………………………………………….
Village…………………………………………………………………………….
Date of the interview……………………………………………………
Position hold …………………..
No. Question Response options Fill in a response
1 Gender 1 Male
2 Female2 Age of respondent 1 Less than 20 years
2 20-25 years3 26-31 years4 32-37 years5 38 -43 years6 44-49 years
7 50+
3 Highest level of education attained 1 Primary2 O’level3 A’level4 Tertiary
institution5 University6 Others specify
4 Marital status 1 Single2 Married3 Others
specify5 Position occupied in ;
Local government 1 Top management2 Middle level
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management3 Operational level
management4 Others specify…..
6 Position occupied in Naads 1 District coordinator 2 Sub county
coordinator3 Parish coordinator4 Village coordinator5 Group leader6 Others specify….
7 How long have u been employed? 1 Less than 1 year2 1 to 2 years3 3 to 5 years4 6 to 9years5 Above 10 years
SECTION B: ROLE AND COMPONENT OF INTRNAL AUDIT
No Question 1 2 3 4 5
1 Segregation of duties is strongly practiced by while processing transactions
2 pre-payment audit is carried out before payments are affected
3 Bank reconciliation statements are prepared monthly
4 The current staff is enough to handle all tasks of naads programme
5 The audit staff is qualified to handle all tasks in the organization
6 All departments are visited by the internal auditors quite regularly
7 The mandatory quarterly reports are produced by auditors
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8 The recommendation in audit reports are implemented by the management
9 The audit reports contain all aspects of the organization
10 The necessary books of accounts are available and used
11 Internal auditors verify accounting books of the organization including institutions
12 Financial statements are extracted from accounting books
13 Internal audit has helped greatly in quality service delivery
14 Internal audit is effective
15 Some audit regulations needs to be amended and others enacted
16 Internal audit has hindered effective delivery of quality services
17 Current internal function is good but implementers have made it not achieve its objectives
SECTION C. QUESTIONS ABOUT SERVICES DELIVERED
No questions 1 2 3 4
5
1 Service are provided
2 Services provided reflects the value of money
3 Services provided are of high quality
4 Services provided are accessible to the community
5 The performance of services are consistence
6 The staff honors their obligations while rendering services
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7 The staff responds to house hold needs and demands
8 Employers are willing and able to provide services
9 Communities participate in planning and implementation of NAADs program
10. Briefly, list down books of accounts kept in NAADs both at district level and at the sub county level
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
11. State briefly any challenges or problems encountered in dealing with internal audit
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
12. Suggest ways for addressing the challenges / problems mentioned above
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
13. What do you think government should do to ensure quality service delivery?
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
RESEARCH QUESTIONAIRES
ANNEX 2
QUESTIONAIRES FOR THE COMMUNITY ON AVAILABILITY OF SERVICE DELIVERY
I am Mwubaha Doreen a final year student at Makerere University offering Bachelors degree in Commerce (accounting option). The questionnaire is designed to collect information aimed at finding out the effect of internal audit on the quality services delivered by NAADS program. The questionnaire therefore is designed purely for academic purposes and any information provided will be strictly for the award of Degree in bachelors of commerce.
I therefore kindly request to respond to these questions to the best of your knowledge and your response will be highly appreciated
SECTION A
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Name of the respondent………………………………………………………..
Sub county……………………………………………………………
Parish…………………………………………………………………….
Village…………………………………………………………………………….
Date of the interview……………………………………………………
Position hold …………………..
No Questions Response option Fill in a score
1 Status 6 male7 female
2 Age of respondent 8 less than 20 years9 20 -25 years 10 26-31 years11 32-37 years12 38-43 years13 Above 44 years
3 Marital status 14 Single15 Married 16 Others specify……….
4 Highest level of education 17 Primary level18 Ordinary level19 Advanced level20 University level21 Others specify
SECTION B. COMPONENTS AND ROLES OF INTERNAL AUDIT
No Question 1 2 3 4 5
1 Segregation of duties is strongly practiced by while processing transactions
2 pre-payment audit is carried out before payments are affected
3 Bank reconciliation statements are prepared monthly
4 The current staff is enough to handle all tasks of NAADs programme
5 The audit staff is qualified to handle all tasks in the organization
6 All departments are visited by the internal auditors quite regularly
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7 The mandatory quarterly reports are produced by auditors
8 The recommendation in audit reports are implemented by the management
9 The audit reports contain all aspects of the organization
10 The necessary books of accounts are available and used
11 Internal auditors verify accounting books of the organization including institutions
12 Financial statements are extracted from accounting books
13 Internal audit has helped greatly in quality service delivery
14 Internal audit is effective
15 Some audit regulations needs to be amended and others enacted
16 Internal audit has hindered effective delivery of quality services
17 Current internal function is good but implementers have made it not achieve its objectives
SECTION C. QUESTIONS ON SERVICE DELIVERED BY NAADS
(Strongly Agree =5) (Agree = 4) (Not sure = 3) (Disagree = 2) (Strongly Disagree = 1)
No question 1 2 3 4 5
1 NAADS program exist your area.
2 I have ever heard of naads program.
3 I have ever received services from naads
4 The quality of services provided was according to my expectations
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5 I have benefited from naads program
6 Services have helped in reducing poverty
7 Services are provided.
8 Services provided reflects the value of money
9 Assets given are of high quality
10 Services provided are accessible to the community including vulnerable groups
11 The staff honours their obligations to the community while lendering services
12 The performance of services is consistent
13 Staff responds to house hold’s needs and demands.
14 Employees are willing and ready to provide services.
15 Communities participate in planning and good implementation of projects
16 Employees are competent to work.
17 Employees are motivated so that they offer quality service.
18 Communities as well as technicians monitor service activities.
19 Monitoring teams give feed back reports on the level of service.
20. What are the services delivered by NAADs program?
……………………………………………………………………………………………………………………………………………………………………………………………………
21. What are the challenges faced by internal auditors while carrying out their functions?
……………………………………………………………………………………………………………………………………………..
22. Give suggestions on how the internal audit function can help make quality service delivery efficient
.……………………………………………………………………………………………………………………………………………………………………………………………………
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23. What are the challenges faced in NAADs program?
……………………………………………………………………………………………………………………………………………………………………………………………………
24. What do you think government should do to ensure quality service delivery?
………………………………………………………………………………………………………………………………………………………….
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