IMPACT OF GOVERNMENT PAYMENT SYSTEM (MUSE) ON FINANCIAL MANAGEMENT IN LOCAL GOVERNMENT AUTHORITIES OF TANZANIA

Abstract

This study examined the impact of Government Payment System (MUSE) on the accuracy, efficiency and quality of financial statements preparation in Local Government Authorities (LGAs) of Tanzania; a case of Singida Municipal Council. Data collection methods used were interview and questionnaire. A Statistical Package for Social Sciences (SPSS) was used to code, edit, summarize, classify, tabulate and analyze the responses. A total of 1,577 staff forms Council’s departments and units. A sample of 96 staff was driven from the statistical method, having knowledge and skills on application of MUSE; applying it during their day-to-today office duties. During the study, at least 82 staff responded to the questionnaires and thus enhanced drawing conclusion, recommendations and areas of further studies. The dependent variable of the study is Financial Management in Government Institutions while the independent variables are impact of MUSE in reduction of financial errors and inaccuracies of financial statements; impact of MUSE in improving accuracy, efficiency and quality of financial statements; and contribution of MUSE in generating high quality financial statements. The study revealed challenges on integration capabilities with other accounting package systems; such as FFARS, TAUSI, TeRMIS, LGRCIS, TANePs, NeST and GoT-HOMIS related to financial functions of the Council. The system is aimed to focus on improving capacity of the system integration on assets schedules, inventories and payroll reporting through automated process. It needs improvement on financial statements retrieving because the figures of the statements tend to change after the reporting period; that is, when the financial statements of previous cut-off period are commanded, they differ in figures time to time. Upgrading the system is inevitable so as to ultimately meet the goal of optimizing the efficiency, accuracy, and quality of prepared financial statements in Tanzania local government authorities enabling valuable insights to policymakers, practitioners, and stakeholders. Therefore, it is recommended to upgrade the Government Payment System (MUSE) to the tune of customizing other government institutional financial systems like FFARS, GAMIS, GoT-HOMIS, TAUSI into system parameters.