The impact of internal controls on SACCO performance in Rukiga, Uganda

https://doi.org/10.35912/amor.v3i4.1453
Published: Apr 27, 2023

Abstract:

Purpose: The research on the internal controls of Rukiga SACCO was conducted in Rukiga District to examine the segregation of duties, determine the impact of independent checks, and assess the risk management on the financial performance of the organization.

Research methodology: This research was carried out after the cross-sectional survey. The bivariate correlations between the predictor components and the dependent variable were examined using a Pearson correlation matrix, and a linear regression model was used to fit the data.

Results: The regression model results showed that segregation of duties (R=762), independent checks (R=676), and risk management (R=899) had beneficial influence on Rukiga SACCO performance. Furthermore, the performance was impacted by risk management, separation of roles, and independent checks.

Limitations: The structured questionnaire, which was administered by the participant, served as the primary data collection tool. The probability of non-responses occurred due to the loss of control over the questionnaire after submission to respondents. This situation had a significant impact on the data analysis and the generalizability of the findings.

Contribution: Task segregation, independent auditing, and risk management should be considered to achieve loan portfolio expansion, profitability development, and market share increase, which were crucial elements of Rukiga SACCO performance.

Keywords:
1. Internal Controls Practices
2. SACCO Performance
3. Uganda
Authors:
1 . Kiconco Patience
Faculty of Economics and Management Science, Kabale University, Kabale, Uganda
2 . Agaba Moses
Faculty of Economics and Management Science, Kabale University, Kabale, Uganda
3 . Turyasingura John Bosco
Faculty of Economics and Management Sciences Kabale University, Kabale, Uganda
4 . Kabagambe Jesse David
Faculty of Economics and Management Sciences Kabale University, Kabale, Uganda
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How to Cite
Patience, K., Moses, A., Bosco, T. J., & David, K. J. (2023). The impact of internal controls on SACCO performance in Rukiga, Uganda. Annals of Management and Organization Research, 3(4), 289–303. https://doi.org/10.35912/amor.v3i4.1453
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Issue & Section
Vol. 3 No. 4 (2022): May
Articles
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References

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  1. Abu, S. E., & Bamidele, O. M. (2022). Effect of Board Characteristics on Financial Performance of Listed Healthcare Firms in Nigeria. Annals of Management and Organization Research, 3(3), 193-206.
  2. Argandoña, A. (1998). The stakeholder theory and the common good. Journal of Business Ethics, 17, 1093-1102.
  3. Asiligwa, M., & Rennox, G. (2017). The Effect of internal controls on the financial performance of commercial banks in Kenya. Journal of Economics and Finance, 8(3), 92-105.
  4. Bashaija, W. (2022). The Effect of Internal Control Systems on the Financial Performance of Commercial Banks in Rwanda. Global Journal of Management And Business Research.
  5. Christensen, H. B., Hail, L., & Leuz, C. (2021). Mandatory CSR and sustainability reporting: Economic analysis and literature review. Review of Accounting Studies, 26(3), 1176-1248.
  6. Ciampi, F., Demi, S., Magrini, A., Marzi, G., & Papa, A. (2021). Exploring the impact of big data analytics capabilities on business model innovation: The mediating role of entrepreneurial orientation. Journal of Business Research, 123, 1-13.
  7. Eton, M., Fabian, M., & Eliab, B. M. (2023). Financial Management Practices and Small-Scale Businesses' Profitability, from the Viewpoint of Kabale Municipality, Uganda.
  8. Gathurithu, A. (2011). An investigation into the factors affecting marketing of Sacco products in Thika, Kenya. A research project submitted at Makerere University, Uganda.
  9. Harash, E. (2017). Accounting performance of SMEs and effect of accounting information system: a conceptual model. Global Journal of Management And Business Research, 17(D3), 21-26.
  10. Inman, R. A., & Green, K. W. (2018). Lean and green combine to impact environmental and operational performance. International journal of production research, 56(14), 4802-4818.
  11. Jeanne, M. (2019). Internal control components and financial performance in public institutions in Rwanda case study: Rwanda Social Security Board (RSSB).
  12. Kaplan, R. S., & Norton, D. P. (1996). Strategic learning & the balanced scorecard. Strategy & Leadership.
  13. Kemboi, E. K. (2019). Effect of Internal Controls on Operational Efficiency of Saccos Registered by Sacco Society Regulatory Authority in Nairobi County. University of Nairobi.
  14. Kiyieka, E. N., & Muturi, W. (2018). Effect of internal controls on financial performance of deposit taking saving and credit cooperative societies in Kisii county, Kenya. International Journal of Social Sciences and Information Technology, 4(10), 30-40.
  15. Lekwauwa, N., & Bans-Akutey, A. (2022). Commercial banks’ profitability and portfolio management in Ghana. Annals of Management and Organization Research, 3(4), 245-257.
  16. Magali, J. J. (2014). Effectiveness of loan portfolio management in rural SACCOS: Evidence from Tanzania. Business and economic research, 4(1), 299.
  17. Mengich, D., & Njiru, A. (2015). Effect of Risk Management Practices On The Financial Growth Of Savings And Credit Cooperatives In Nakuru County, Kenya. International Journal of Economics, Commerce and Management United Kingdom. III, 11.
  18. Merchant, K. A., & Otley, D. T. (2006). A review of the literature on control and accountability. Handbooks of management accounting research, 2, 785-802.
  19. Moses, A., & Turyasingura, J. B. (2022). An Assessment of the Accounting Techniques on Business Performance in Selected Commercial Banks in Kabale Municipality, Uganda.
  20. Moses, A., Turyasingura, J. B., & Kyabarongo, B. (2022). Employee Rewards Management and the Performance of Small Scale Enterprises in Uganda, a Case of Ntungamo Municipality.
  21. Muchiri, N. W., & Jagongo, A. (2017). Internal auditing and financial performance of public institutions in Kenya: A case study of Kenya Meat Commission. African journal of business management, 11(8), 168-174.
  22. Mugo, A. N., Kahuthia, J., & Kinyua, G. (2019). Effects of infrastructure on growth of small and medium enterprises in Kenya: A case of clothing and textile businesses in Nairobi Central Business District. International Academic Journal of Human Resource and Business Administration, 3(6), 133-149.
  23. Munyiri, P., & Wekesa, S. (2017). The Influence of Loan Default on Growth of Deposit Taking SACCOs in Nairobi County. IOSR journal of humanities and social science, 22, 24-30.
  24. Nuwagaba, A. (2012). Savings and credit cooperative societies (SACCOS) as a source of financing agriculture. Challenges and lessons learnt. Journal of Environment and Earth Science, 2(11), 11.
  25. Olayinka, A. A., & Mustapha, S. (2022). Analysing financial performance of listed cement industries in Nigeria: Financial Ratio Approach. Annals of Management and Organization Research, 3(4), 231-244.
  26. Sandvik, I. L., & Sandvik, K. (2003). The impact of market orientation on product innovativeness and business performance. International Journal of research in Marketing, 20(4), 355-376.
  27. Segun, A. C., Kehinde, O. J., & Alice, O. O. (2020). Effect of Internal Control Systems on the Financial Performance of Deposit Money Banks in Osun State. World Journal of Innovative Research (WJIR) ISSN, 2454-8236.
  28. Sigilai, D. K. (2017). Assessment of internal control systems effects on revenue collection at Nakuru Level Five Hospital. COHRED-JKUAT.
  29. Todd, B., & Murphy, W. P. (2015). True Valour: The Life and Times of Billy Todd: Vivid Publishing.
  30. Turyasingura, J. B., & Moses, A. (2023). Effect of Corporate Governance on Performance of SACCOs in Rubanda District South Western Uganda.
  31. Turyasingura, J. B., Moses, A., Meza, O., Zombeire, J., & Kyabarongo, B. (2022). Resourcing and the sustainability of Donor funded Potatoes Projects in Kabale District, Southwestern Uganda.
  32. Weerathunga, V. M., & Seneviratne, S. C. (2023). Management control systems and business performance: Evidence from Sri Lankan apparel industry. International Journal of Financial, Accounting, and Management, 4(4), 411-426.