Abstract:
Creation of an effective internal control system is the basic instruments of corporate firm control that help organization to achieve efficiency in operations as well as competitive advantage over other enterprises. Further, the internal control system has been effective in controlling fraud in the institutions in various forms as Fraud had negative and insignificant effect on the performance of such institutions. Therefore, the purpose of this study was to assess the factor influencing internal control system in public organizations performance in Arusha City, Tanzania. The study used explanatory research design and used 85 respondents from the five public institutions in Arusha city. The study used questionnaires to collect information and data were analyzed using Statistical Package for Social Science (SPSS). The study found that to some extent the control environment play a great role in the performance of public organization. Also, the study noted that monitoring activities have played great role in the performance of public organizations. However, the study revealed that somehow the public organizations perform risk assessment before operations. Lastly, the study found that public organization use information technology to improve organization performance. Nevertheless, the study found that there is positive and weak relationship between public organization performance and internal control system. Therefore, the study recommended that the public organizations should improve internal control system to increase performance so that to promote participation of stakeholders and customer satisfaction.