Investigating Internal Control Systems Contribution to Strengthening Revenue Enhancement in Tanzania Local Government Authorities

Abstract

his study investigated the internal control systems contribution to strengthening revenue enhancement in Tanzania Local Government Authorities: A case of Busokelo District Council. Specifically it determined the ICSs and their effectiveness on revenue collection, assessed the relationship between ICSs and revenue collection and analyzed the ICSs and revenue collection performance. A descriptive research design was used with a quantitative approach. A sample size of 80 respondents was drawn using questionnaire. Data collected were analyzed using descriptive and correlation analysis. The results revealed that there has been enhancement of ICSs in Busokelo District that resulted into effective revenue collection due to availability of segregation of duties, regular financial audits, written policies and procedures. Furthermore, the internal control systems had a varied relationship of a weak negative correlation of -.393 while establishing revenue collection performance showed a strong negative correlation of -.589. More so, communication channel availability between departments for revenue collection activities showed a strong negative correlation of -.547 while the importance of management support and commitment showed a moderate positive correlation of .487. Yet, the challenges hindering the effectiveness of ICSs showed a strong negative correlation of -.533 while ICSs integrated with technology showed a weak positive correlation of .057. However, the results show that satisfaction with the level of automation had a weak negative correlation of -.214 while ICSs impacting on revenue collection had a weak positive correlation of .188. All these had p values of 0.000. Similarly, the established revenue collection performance ranged from excellent to good; implying that ICSs had a direct impact on revenue collection performance. It is concluded that revenue leakages need to be alleviated with adequate ICSs. It is recommended that management commitment and support would enhance revenue collection if strategies are put forward and implemented.