Internal controls and financial performance of savings and credit Cooperative Organizations

Abstract

The main purpose of the study was to find out the effect of internal controls on financial performance of SACCOs. The study was carried out in south Buganda Teachers’ SACCO. The objectives of the study were; to find out the effect of internal controls on market share growth in SACCOs, to assess the effect of internal controls on the investment growth in SACCOs, and to assess the challenges faced in employing internal controls in SACCOs. In order to come-up with satisfying results, the study considered a SACCO with a study population of 24 respondents. Random sampling as well as the use of questionnaires was the methods used in getting views of the respondents as far as the study objectives were concerned. The questionnaires were revised first to see that they carry only questions that would give the respondents a clear view on what was being asked. Data received was being coded, entered, edited and then used for final report. It was revealed that there is a big effect if internal controls on the financial performance of SACCOs. This is based on the investment growth, market share growth of the SACCO specifically considering South Buganda Teachers’ SACCO. Due to the challenges faced like fraud, poor risk assessment and management, among others; there is still a need to address these challenges in order to attain a stable positive financial performance of SACCOs. More still, depending on the findings; it is discovered that there is still a need to educate the employees about the internal controls in place to make sure that they very well make sure that they act in line with the guidelines and rules of the institution to see that the intended financial performance is attained.