Internal Controls, Managerial Competence and Financial Performance of ABU Sacco

Purpose: This study aimed at establishing the relationship between Internal controls, managerial competence and financial performance of ABU SACCO Mbarara. Methodology: A cross- sectional study design was adopted and based on a population comprised of ABU SACCO coverage in her 6 branches. A sample size of 35 respondents was selected. The study used the questionnaire to collect data and extracted financial data from audited financial statements of the SACCO and management reports over the four years 2014-2017. Correlation and regression analysis were done with the use of SPSS ver. 21, PMT tool was used to analyze secondary data. Findings: The study findings reveal that there is a significant positive relationship between internal controls and financial performance at ABU SACCO (r=.515, p<.01). This means that any positive change in internal controls is associated with a positive change in financial performance. The findings further revealed that there is a significant positive relationship between managerial competence and financial performance at ABU SACCO (r=.765, p<.01). All the dimensions of internal controls have a positive significant relationship with financial performance apart from control activities and control environment, plus the dimensions of managerial competence have a positive significant relationship with financial performance apart from interpersonal skills. A regression analysis established that internal controls and managerial competence explain 58.4% of the variations in the financial performance of ABU SACCO. The implication is that 41.6% is explained by variables not considered in this study such as; political and inflation factors.