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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 i

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Page 1: cees.mak.ac.ugcees.mak.ac.ug/sites/default/files/publications/DOREEN.docx  · Web viewI would like to acknowledge with deep gratitude my lovely mum, Dad, Aunt Jeninah, all my uncles

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

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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

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APPROVALThis research report has been under my supervision and is ready for submission and examination

Signature………………………….. Date………………………………..

Tusubira Nyende Festo

Supervisor

II

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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

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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

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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.

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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

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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.

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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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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

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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

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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.

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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

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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.

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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

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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.

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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

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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)

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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

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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

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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.

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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.

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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.

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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

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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

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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

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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.

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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.

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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.

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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.

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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;

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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.

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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

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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.

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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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