INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM AND FINANCIAL REPORTING EFFECTIVENESS

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KYAMBOGO UNIVERSITY
INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM (IFMIS) AND
FINANCIAL REPORTING EFFECTIVENESS OF LOCAL GOVERNMENT IN
UGANDA: A CASE STUDY OF WAKISO DISTRICT
BY
MUGABA MUHAMAD MUHAMUD
(BSWASA, KYU)
A RESEARCH REPORT SUBMITTED TO GRADUATE SCHOOL IN FULFILLMENT
OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF SCIENCE IN
ORGANISATION AND PUBLIC POLICY MANAGEMENT OF KYAMBOGO
UNIVERSITY
NOVEMBER, 2016

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DECLARATION
I hereby do declare that this research report is my own effort and it has never been produced
anywhere in Kyambogo University or any other institution of higher learning before.
SIGNATURE……………………………………………….DATE…………………………...….
MUGABA MUHAMAD MUHAMUD
14/U/12863/GMOP/PE

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APPROVAL
This dissertation has been developed and submitted with the approval of the following supervisors;
SIGNATURE………………………………………………DATE…………………………….
DR. MARY MAURICE MUKOKOMA (PhD)
SIGNATURE………………………………………………DATE…………………………….
DR. TEOPISTA N. KYAMANYWA (PhD)

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TABLE OF CONTENTS
DECLARATION............................................................................................................................... ii
APPROVAL.................................................................................................................................... iii
List of Table.....................................................................................................................................vii
DEDICATION.................................................................................................................................vii
ACKNOWLEDGEMENT.......................................................................Error! Bookmark not defined.
ABBREVIATION……………………………………………………………………………………..……x
ABSTRACT..................................................................................................................................viiii
CHAPTER ONE:...............................................................................................................................1
INTRODUCTION..............................................................................................................................1
1.0 Introduction ..............................................................................................................................1
1.1 Background to the Study............................................................................................................2
1.2 Statement of the Problem...........................................................................................................5
1.3 Objectives of the Study..............................................................................................................5
1.3.1 General Objective ...............................................................................................................5
1.3.2 Specific Objectives .............................................................................................................5
1.4 Research Questions ...................................................................................................................5
1.5 The Scope of the Study..............................................................................................................6
1. 6 Significance of the Study ..........................................................................................................6
1.7 A Conceptual framework...........................................................................................................7
CHAPTER TWO:...............................................................................................................................8
LITERATURE REVIEW........................................................................Error! Bookmark not defined.
2.0 Introduction .............................................................................. Error! Bookmark not defined.
2.1 The Concept of IFMIS............................................................... Error! Bookmark not defined.
2.2 Financial Reporting Effectiveness .............................................. Error! Bookmark not defined.
2.3 Budgeting preparation and financial reporting effectiveness......... Error! Bookmark not defined.
2.4 Transactions Processing and Financial Reporting Effectiveness.... Error! Bookmark not defined.

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2.5 Report preparation and financial reporting effectiveness .............. Error! Bookmark not defined.
CHAPTER THREE:...........................................................................................................................9
RESEARCH METHODOLOGY.........................................................................................................9
3.0 Introduction ..............................................................................................................................9
3.1 Research Desigsn ......................................................................................................................9
3.2 The Target Population ...............................................................................................................9
3.3 Sampling Size and Sampling Technique .....................................................................................9
3.4 Data Collection Methods and Tools ..........................................................................................10
3.5 Data Collection Procedures......................................................................................................11
3.6 Data Quality Control ...............................................................................................................11
3.7 Reliability and Validity............................................................................................................11
3.7.1 Reliability.........................................................................................................................11
3.7.2 Validity ............................................................................................................................12
3.8 Measurement of Variables .......................................................................................................12
3.9 Data Analyses Methods ...........................................................................................................12
3.10 Ethical Considerations ...........................................................................................................13
3.11 Limitation to the Study ..........................................................................................................13
CHAPTER FOUR:...........................................................................................................................14
PRESENTATION AND ANALYSIS OF RESULTS..........................................................................14
4.0 Introduction ............................................................................................................................14
4.1 Demographic Characteristics of Respondents ............................................................................14
4.1.1 Gender of Respondents......................................................................................................14
4.1.2 Age of Respondents ..........................................................................................................15
4.1.3 Level of Education of Respondents ....................................................................................15
4.1.4 Department of Respondents ...............................................................................................16
4.1.5 Number of years spent in the Department ...........................................................................16
4.2 Frequency of IFMIS Use..........................................................................................................17

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4.3 IFMIS budget preparation and financial reporting effectiveness of Local Governments................17
4.5 Transactions Processing and Financial Reporting Effectiveness of Local Governments ................21
4.7 Report Preparation and Financial Reporting Effectiveness of Local Governments........................25
4.9 IFMIS and Financial Reporting Effectiveness............................................................................30
CHAPTER FIVE:.............................................................................................................................34
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS .......................................................34
5.1 Introduction ............................................................................................................................34
5.2 Summary ................................................................................................................................34
5.3 Discussions .............................................................................................................................34
5.3.1 The Effect of IFMIS budget preparation on Financial Reporting effectiveness.......................35
5.3.2 The Effect of Financial Transactions Processing on Financial Reporting Effectiveness ..........37
5.3.3 The Effect of IFMIS financial report preparation on financial reporting effectiveness............40
5.4 Conclusions ............................................................................................................................42
5.4.1 The Effect of IFMIS budgeting system on Financial Reporting effectiveness ........................42
5.4.2 The Effect of IFMIS financial transactions system on financial reporting effectiveness..........42
5.4.3 The Effect of IFMIS Report preparation on financial reporting effectiveness.........................43
5.5 Recommendations ...................................................................................................................43
5.6 Recommendation for Further Studies........................................................................................43
REFERENCES/BIBLIOGRAPHY ....................................................................................................45
Appendix 1: Questionnaire................................................................................................................48
Appendix 2: Krejcie and Morgan Table (1970) For Determining Sample SizeError! Bookmark not
defined.
Appendix 3: Frequency table of IFMIS Budget preparation on financial reporting effectiveness .......Error!
Bookmark not defined.
Appendix 4: Frequency table of transaction processing on financial reporting effectiveness..............Error!

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Appendix 5: Frequency table of IFMIS report preparation on financial reporting effectiveness .........Error!
Appendix 6: Frequency table of IFMIS on financial reporting effectivenessError! Bookmark not defined.
Appendix 7: Introductory letter................................................................Error! Bookmark not defined.
LIST OF TABLE
Table 1: Showing the Sample size......................................................................................................10
Table 2: Showing Gender of Respondents ..........................................................................................14
Table 3: Showing Age of Respondents...............................................................................................15
Table 4: Showing Level of Education of Respondents .........................................................................15
Table 5: Showing Department of Respondents....................................................................................16
Table 6: Showing Period spent in the department................................................................................17
Table 7: Showing Frequency of IFMIS Use........................................................................................17
Table 8: Showing budget preparation and financial reporting Effectiveness (n=104) .............................18
Table 9: Showing correlation between IFMIS budget and financial reporting effectiveness....................20
Table 10: Showing Transactions Processing and Financial Reporting Effectiveness (n=104) .................21
Table 11: Showing the correlation between IFMIS transaction processing and financial reporting
effectiveness ..........................................................................................Error! Bookmark not defined.
Table 12: Showing Report Preparation and Financial Reporting Effectiveness (n=104) .........................26
Table 13: Showing correlation between IFMIS Report preparation and financial reporting effectiveness 29
Table 14: Showing IFMIS and Financial Reporting Effectiveness (n=104) ...........................................30
Table 15: Showing a multi-variate Logistic Regression of Financial Reporting Effectiveness and IFMIS
Budget Preparation, Transaction Processing and Report Preparation ....................................................32

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ABBREVIATIONS
IFMIS: Integrated Financial Management Information System
USAID: United State Aid for International Development
IMF: International Monetary Fund
MTEFs: Medium Term Expenditure Frameworks
PEM: Public Expenditure Management
MFPED: Ministry of Finance, Planning and Economic Development
FMIS: Financial Management Information System
PFM: Public Fund Management
G2C: Government to Citizens
G2B: Government to Business
G2G: Government to Government
CVI: Content Validity Index
SPSS: Statistical Packages for Social Sciences

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ABSTRACT
The study sought to examine the effect of Financial Integrated Management Information System
on Financial Reporting Effectiveness of District Local Governments in Uganda. The main
objectives of the study was to assess the effect of Budget Preparation on Financial Reporting
Effectiveness of District Local Governments, to analyse the effect of Transaction Processing on
Financial Reporting Effectiveness of District Local Governments, and to examine the effect of
Report Preparation on Financial Reporting Effectiveness of District Local Governments.
The study adopted a descriptive case study research design due to its ability to provide a snapshot
of the current state of affairs. Data was collected using a questionnaire and structured interviews
and collected data was analysed using quantitative and qualitative method of data analysis.
The study found that IFMIS system positively affected and improved the financial reporting
effectiveness of district local government by ensuring consistency in reporting with mean support
of 3.30, accuracy 4.19, timely reporting 4.39, transparency 4.32 and ensuring relevancy of the
report 4.23. This overwhelming support for the system reflect that IFMIS has great effect on
financial reporting of effectiveness of Wakiso district. This positive effect is achieved through
effective budget preparation, transaction processing and effective report preparation of the system
meaning that, this discovery fulfils one of the objective for the introduction of Integrated Financial
Management Information System (IFMIS) in district local government which is improving
financial reporting effectiveness.

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The study therefore recommended that district managers need to continuously train its staff on the
use this information to plan and formulate budgets; examine results against budgets and plans;
manage cash balances; track the status of debts and receivables; monitor the use of fixed assets
and monitor the performance of specific departments or units for effective financial reporting
effectiveness.

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CHAPTER ONE
INTRODUCTION
1.0 Introduction
A well-designed Integrated Financial Management Information System (IFMIS) contains the
characteristics that include management function that provides a wide range of non-financial and
financial information and the system affects the reporting effectiveness (Hendriks, 2012). IFMIS
is meant to be used as a common system across government institutions, including Local
Governments. The integration of IFMIS across the board ensures that all users adhere to common
standards, rules and procedures, with the view to reducing risks of mismanagement of public
resources through automated reporting of financial matters.
Financial reporting effectiveness provide information about the financial position, performance
and financial adaptability of an institution that is useful to a wide range of users for assessing the
stewardship of management and for making economic/financial decision. Therefore, financial
reporting effectiveness is crucial to financial decision-makers to make decision on investment,
policy, and marketing strategies. Decisions are made out of available information; hence, financial
reports should be made available to users periodically (Maidoki, 2013).
Timeliness principle in accounting refers to the need for accounting information to be presented
to the users in time to fulfil their decision making needs. The timeliness of accounting information
refers to the provision of information to users quickly enough for them to take action. The timeliness
concept is of particular importance in four areas of a business (Diamond & Khemani, 2005). Many of the
public sector institutions do not timely release the financial information due to the nature of the systems
used to generate financial information. This make financial reporting effectiveness very hard when there is
no timely financial information and therefore hard to make financial decisions (Hendriks, 2012).
Timeliness of accounting information is highly desirable since information that is presented timely
is generally more relevant to users while conversely, delay in provision of information tends to
render it less relevant to the decision making needs of the users. Timeliness principle is therefore
closely related to the relevance principle. It is also important to protect the users of accounting
information from basing their decisions on outdated information (Brown, 2008).
Accuracy: is freedom from error (correctness), or closeness to truth or fact, resulting from exercise
of painstaking care or due diligence. According to auditor general report (2015) observed that

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accuracy in financial reports in public sector is still a problem, because accuracy has been depends
on how the data is collected, and is usually judged by comparing several measurements from the
same or different sources and yet public sector has been lacking a system to collect uniform data.
Coupled with accuracy is consistency which means that accounting methods once adopted must
be applied consistently in future (World Bank, 2013). This has been a challenge to almost public
sector institutions, because of the manual approach public sector use in reporting financial report,
they have not been consistent in reporting as advanced by (Bragg, 2013). Transparency is the
extent to which investors have ready access to required financial information about a company,
such as price levels, market depth and audited financial reports (Karatsi, 2015). Transparency helps
reduce price volatility, because all the market participants can base decisions of value on the same
data. Local government also have a strong motivation to provide disclosure, as transparency is
generally rewarded through the stock's performance.
1.1 Background to the Study
Over the past decade, developing, transition and post-conflict countries have increasingly
embarked on efforts to computerize their government operations, particularly with respect to
Public Financial Management and reporting. Most common among these have been the effort to
introduce Integrated Financial Management Information Systems (IFMIS) that computerize and
automate key aspects of budget execution and accounting operations across the institutions of
government (Rozner & Gallagher, 2008).
There has been a growing interest in the quality of public sector financial management in
developing countries with developing countries being encouraged to reform their expenditure
management and accountability systems and increasingly embark on major projects to computerize
their public institutions financial operations (Bason, 2010). Introducing Integrated Financial
Management Information Systems (IFMIS) in developing countries has been the most popular
among those projects to computerize public institutions’ accounting and payment operations aimed
at improving financial reporting (International Monetory Fund, 2010).
IFMIS refers to the use of information and communications technology in financial operations to
support management in budget decisions making, transaction processing, fiduciary
responsibilities, and preparation of financial reports and statements of the organisation (Rozner &
Gallagher, 2008). Its scope covers accounting, budgeting, cash management and debt management

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and related core treasury systems, and reporting. In its basic form, an IFMIS is little more than an
accounting system configured to operate according to the needs and specifications of the
environment in which it is installed (Brown, 2008).
As advanced by Meigns (1998) and cited by Maidoki (2013), financial reporting effectiveness is
the process of communicating financial information that is accurate, transparent, and consistent
within time bound to decision-makers. It provides information useful for making investment
decisions. Its disclosure provides both quantitative and qualitative information for its user’s
effective use and reliable decisions. In other words it presents information in a way that can be
understood by users. However Larson (1999), view financial reporting effectiveness as the
communication of relevant financial information to decision- makers (Maidoki, 2013).
IFMIS can enable prompt and efficient access to reliable financial data and help strengthen
government financial controls, improving the provision of government services, raising the budget
process to higher levels of transparency and accountability and expediting government operations
(Isidore, 2012). Donors and international institutions like the International Monetary Fund (IMF),
the World Bank, and USAID have played a critical role, and will continue to do so in supporting
and shaping developing countries’ financial management systems through projects that provide a
combination of technical assistance, training, financial resources and procurement support to
partner governments (Rozner & Gallagher, 2008). This is due to a broad agreement that freely
functioning IFMIS can improve financial management by providing real time information that
financial and other managers can use to administer programs effectively, formulate budget and
manage resources.
Institutional-centric theory of finances proposed by Stein and Rosefielde in 2005 as an alternative
to the flawed financial liberalization theory that increased the instability of developing countries
during the 90s. Based on the theory of imperfect markets, it acknowledges the existence of
imperfect information in the informal and formal institutions, which efficiency is the engine of
development (Stein &Rosefielde, 2005; Dornbusch&Reynoso, 2003). This therefore highlighted
the need to have an integrated system that supports real time financial information access. An
integration of financial functions was proposed by Demaestri and Guerrero (2003) and
theoretically suggests that effectiveness and efficacy are achieved when financial information is
integrated. In relation to this study, adoption of IFMIS in the districts is aimed at enhancing

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information access through integration of various functions thereby removing information
asymmetry. This as suggested by Demaestri and Guerrero (2003) will enhance effectiveness and
efficacy of district treasury and therefore ensure effective public financial reporting (Wamuyu,
2013).
The middle late 1990s saw the proliferation of Medium Term Expenditure Frameworks (MTEFs)
throughout the developing world. About 25 countries in Africa including Kenya, South Africa,
Uganda, Asia (eastern, central, and southern), Latin America, and Eastern Europe are at various
stages in the process of adopting MTEFs and other countries are seriously considering it. This
proliferation has occurred over a relatively short period of time. Of the 25 existing MTEFs, nearly
90% were adopted over the five-year period 1997-2001. It is not premature to say that MTEFs are
a trend in developing country public expenditure management (PEM), and the trend shows no
signs of cresting” (Wynne, 2005).
Since 2002, the Government of Uganda has been installing a number of stand-alone computerised
systems in various Government Ministries, Agencies and Local Governments in an attempt to plug
these deficiencies and for the strengthening of government finance and accounting functions
(Diamond & Khemani, 2005). The system was first extended to 22 ministries and 25 districts, by
2014 IFMIS had been operationalized in 77 districts to manage public funds Wakiso district
inclusive ( (Nabuukera , 2014). This is being done for the purpose of improving management,
reporting and transparency of public funds for effective service delivery. The establishment of an
IFMIS has become an important benchmark for the country’s budget reform agenda often regarded
as a precondition for achieving effective management of budgetary resources (Muigai, 2012).
Wakiso district is among the districts that have been using IFMIS since 2014 and its focus is not
only on efficiency and effectiveness but also ensuring management and interactive access of
information on their expenditure by the public and improvement to service delivery (MoFPED,
2015). The ambition to adopt the system was influenced by the benefits advanced by Hendriks
(2012) that IFMIS forms part of the financial management reform practices of developing
countries globally and holds benefits such as effective control over public finance, enhance
transparency and management and serves as a deterrent to corruption and fraud through reporting.

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1.2 Statement of the Problem
Auditor General Report (2015) observes that Wakiso district failed to effectively report for
finances worthy Ush. 30,092,483,676 in financial year ended 30th June 2015 and it’s not only
Wakiso but other district as well. As a way to improve district financial reporting. IFMIS was
introduced in the district as a tool to cushion the district against loss of revenue through
unauthorized expenditure so as to improve financial reporting (Munyambonera & Lwanga, 2015).
Despite the existence of the system for three years, the financial misappropriation has remained
unchanged which affects service delivery and value for money (Dener & Young, 2015) and
(Karatsi, 2015). This calls for an investigation about the system in regard to ensuring financial
reporting effectiveness of the district if local government funds are to achieve its goal and ensure
future financial management.
1.3 Objectives of the Study
1.3.1 General Objective
To determine the effect of Integrated Financial Management Information System (IFMIS) on
Financial Reporting Effectiveness of Wakiso District Local Government
1.3.2 Specific Objectives
The study was guided by the following three specific objectives;
i. To assess the effect of budget preparation on financial reporting Effectiveness of Wakiso
District
ii. To establish the effect of transaction processing on financial reporting effectiveness of
Wakiso District
iii. To examine the effect of report preparation on financial reporting effectiveness of Wakiso
District
1.4 Research Questions
The study was tasked to answer the following question below:
i. What is the effect of budget preparation on financial reporting effectiveness of Wakiso
District?
ii. How does IFMIS transaction processing affect financial reporting effectiveness of Wakiso
District?

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iii. What is the effect of report preparation on financial reporting effectiveness of Wakiso
District?
1.5 The Scope of the Study
This study was limited to assessing the effect of Integrated Financial Management Information
System (IFMIS) on Financial Reporting Effectiveness of district Local Governments taking a case
study of Wakiso District Local Government. This study was guided by key components IFMIS
components that include budget Preparation, transaction processing and report preparation with
emphasis on objectives that include; To assess the effect of Budget Preparation on Financial
Reporting Effectiveness of District Local Governments, analyzing the effect of Transaction
Processing on Financial Reporting Effectiveness of District Local Governments and examining
the effect of Report Preparation on Financial Reporting Effectiveness of Wakiso District Local
Governments. This is because they are the key areas that can leads to effective financial reporting
and management.
The study was carried out at Wakiso District Local Government. Wakiso District lies in the Central
Region of the country, bordering with Nakaseke District and Luweero District to the north,
Mukono District to the east, Kalangala District in Lake Victoria to the south, Mpigi District to the
southwest and Mityana District to the northwest. This was due to the fact that Wakiso district is
one of those that has been using IFMIS in executing its financial activities
The study was limited to three years between 2014 and 2016. This is because this is the period that
the IFMIS has been operating in Local Government.
1. 6 Significance of the Study
This research was important because it investigated and provided answers to issues that were
becoming more applicable in the increasingly information systems environment; leadership and
financial management of District Local Government. The findings of this study would be
important to managers in Local Government because it could be used to make major improvements
to managerial deficiencies that may exist within their respective Districts.
District Local Governments servant have new channels of record keeping and they will be in a
position to use IFMIS to provide timely, accurate and consistent data for management and budget
decision making. It also provided them with means that provides value for money.

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The Wakiso District Local Government benefited from the information on the effects of IFMIS on
Financial Management in Local Governments, its importance and how to successfully use the
system to ensure financial efficiency and effectiveness and improve service delivery
The study stimulated academic interest in the whole aspect of integrated financial management
information system in the District Local Governments because it was a relatively new field hence
forming a basis for future research in IFMIS both in private and public sectors.
Guide policy makers in Local Governments, implementers and other public agencies on refining
IFMIS if gaps exist to achieve accurate financial management and provide information to donors
and citizens on how to mitigate challenges faced in implementation of IFMIS in district local
governments in Uganda
1.7 A Conceptual framework
Independent Variables Dependent Variable
Moderating variables
Source: Adapted from Rozner & Gallagher (2008)& Maidoki, (2013) and modified by the
researcher.
The study conceptualises that there is an effect between IFMIS and financial reporting
effectiveness of local governments. According to Rozner & Gallagher (2008), an IFMIS assists
management in ensuring financial reporting and accountability for the deployment and use of
public resources and in improving the effectiveness and efficiency of public expenditure
programmes for effective service delivery
In the above conceptual framework the success or failure of IFMIS in ensuring financial reporting
effectiveness is dependent Budget preparation, Transaction process, and Financial Report
Preparation and moderating variable like operating environment also contribute to the success of
- Budget preparation
- Transaction processing
- Report Preparation
- Operating Environment
- Timeliness
- Accuracy
- Consistency
- Transparency
IFMIS Financial Reporting Effectiveness

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the system. By tracking financial events through an automated financial system, district
management is able to exercise improved control over expenditure and to improve transparency
through reporting in the budget cycle as a whole (Diamond & Khemani, 2006), (Rozner &
Gallagher, 2008).
In conclusion this chapter provides background information on integrated financial management
information systems, trends and implementation issues underpinning financial reporting
effectiveness in Wakiso District Local Governments. The chapter discusses the problem and raises
the research questions. Further, it provides the scope and explains the significance of the study.

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CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter presents the research design and techniques that were used in collecting and analyzing
data towards the achievement of the stated objectives. These include; area of study, study
population, sample size, study variables, sources of data collection, data collection methods, data
analyses, ethical consideration and the limitations of the study.
3.1 Research Design
Descriptive Case study research design was adapted for the study. This refers to an empirical
inquiry that investigates a single phenomenon within its real-life context; when the boundaries
between phenomenon and context are not clearly evident; and in which multiple sources of
evidence are used. It was used because case study research design allows the examination of the
data is most often conducted within the context of its use, that is, within the situation in which the
activity takes place (Zainal, 2007).
Descriptive case study research design was used because of its ability to provide a real situation of
the current state of affairs and the major variables to be studied include: financial budget planning,
financial transaction processing and financial report preparation and the research was both
qualitative and quantitative approaches and it was interactive with a number of departments in the
district (Zainal, 2007)
3.2 The Target Population
The target population were employees of Wakiso Districts Local Government in department that
includes finance, internal audits, and at Public works department where the financial system is in
use. According to Auditor General report, (2015) Wakiso district has about 150 staffs. The
researcher ascertained this population with the human resource department of the district council
on the possible number of employees in each of the department under study.
3.3 Sampling Size and Sampling Technique
The sample size in this study was 108 respondents determine using Krejcie and Morgan table
(1970) which was obtained from the target population.

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Table 1: Showing the Sample size
Department Population Sample size Sampling strategy
Finance 16 15 Systematic
Audit 18 16 Systematic
Procurement and Marketing 22 20 Stratified
Accounts 23 20 Stratified
Education 11 9 Systematic
Health 12 9 Systematic
Planning 13 11 Systematic
Administration 9 8 Systematic
Source: Krejcie & Morgan, (1970).
Both Stratified random sampling and systematic technique was used because the study population
is heterogeneous as it comprises of employees from different departments. After stratification of
the respondents, purposive sampling was used to select the sample elements from each stratum to
get the actual number of 108 respondents that represented the target population. This technique
also ensured fair and accurate representation of the general target population. In research, at least
30% of the target population is a recommended size to study the population (Kothari, 2014). A
sample size of 108 respondents therefore is enough to be studied in this study.
3.4 Data Collection Methods and Tools
The questionnaire was used to collect data and the questionnaire was structured in nature in order
to ensure data collection validity and reliability and deep insight on the statistical variables and it
was used to collect information from the rest of the respondent in the selected departments. In this
study, the questions sought answers to the research questions and the respondents were provided
with a list of close-ended questions based on each specific objective.
The questionnaire was divided into five sections. The first section sought respondents’
demographic profile such as gender, age, education, years of service at the district, among others.
The second section comprised of Likert Scale questions about the effect of IFMIS budget
preparation on financial reporting effectiveness in district local governments. The third section
comprised of questions about the effect of IFMIS transactions processing on financial reporting
effectiveness in district local governments. The fourth section had questions about the effect of

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IFMIS report preparation on financial reporting effectiveness in district local governments, and
the last section contained questions concerning the effect of IFMIS on financial reporting
effectiveness in district local governments. Structured interviews were also used
3.5 Data Collection Procedures
Upon the approval of the topic, the researcher wrote a proposal which was approved by the
supervisor and graduate school for data collection. The researcher obtained an introduction letter
from Graduate school which was presented to district authorities for permission to collect data.
Upon acceptance, the researcher begun to identify the respondents who are in this case employees
of the district. The researcher introduced himself to the respondent and explain how he/she was
selected to be part of the study. The researcher asked for consent from the respondent to participate
in the study. Upon respondent acceptance, the research administered a questionnaire to the
respondent or begun an interview with the respondent. Upon completion of the interview or filling
of the questionnaire, the researcher collected the questionnaires and thanked the respondents for
participating in the study
3.6 Data Quality Control
After the collection of raw data with the relevant research instruments, the researcher ensured that
he cross checked the questionnaires to ensure that also questions are answered before leaving the
field. This was coupled with supervision of the research assistants by the team leader in this case
the researcher during data collection to ensure that everything is done as planned
3.7 Reliability and Validity
3.7.1 Reliability
Reliability is the measure of the degree to which a research instruments yields consistent results
or data after repeated trials. A pilot study was conducted on a few personnel of Mukono district to
measure the validity and reliability of the research instrument. Those selected for piloting were not
selected again for the main study.
The reliability (internal consistency) of the collected data in this study was assessed by calculating
the Cronbach’s Alpha coefficient using statistical package for social sciences (SPSS). Although
several measures of reliability can be ascertained in order to establish the internal consistency of
an instrument, this method was considered to be the most general form of reliability estimation. In

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this method reliability was operationalized as internal consistency, which is the degree of inter
correlations among the items that constitute a scale. An alpha value of 0.895 was obtained hence
demonstrating internal consistency of new scales.
3.7.2 Validity
Content validity was used to determine the extent to which the items in the questionnaire provide
adequate coverage of the investigative questions. It was used through the judgments and guidance
that made by supervisors on the items included in the instrument. To measure this validity, this
formula was applied
CVI = Number of items rated relevant by all experts = 32 = 0.821
Total number of in terms in the instrument 39
The CVI was 0.821 and therefore the instrument was considered valid and was taken on for data
collection
3.8 Measurement of Variables
Budget preparation was assessed in terms of flexibility, realistic and ability to track expenses and
incomes. Transaction processing was measured in regard to rapid response, reliability, inflexibility
and controlled processing while Report preparation was measured in terms of straight forwardness,
structure and organised, relevancy, clarity, comprehensive and factual. And financial reporting
effectiveness was assessed in regard to accuracy, transparency, consistency, timeliness
Likert scale of measurement of 1-5 dimensions (Strongly Agree (5), Agree (4), Neutral (3),
Disagree (2) and Strongly Disagree (1)) was used to measure the opinions of on various aspects of
IFMIS on financial reporting effectiveness to draw conclusion on the study.
3.9 Data Analyses Methods
The procedure for data analysis began by first coding and entering the data in the Statistical
Package for the Social Sciences (SPSS), computer software used for analysing data. Coding, in
essence, entails the attribution of a number to a piece of data, or group of data, with the express
aim of allowing such data to be analysed in quantitative terms and the analysis was done using
SPSS at two levels. First, Descriptive summary of the findings was analysed and presented using
mean, standard deviation, maximum and minimum distribution and findings were presented in
tables.

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Secondly a multi-variant logistic regression was used to determining the net impact of independent
variable on dependent variable that IFMIS budget preparation, transaction processing and report
preparation on financial reporting effectiveness. This was because logistic regression has been
proven to be efficient in the analysis of data where response variable is categorical.
3.10 Ethical Considerations
The researcher sought the consent of the respondents before the information is collected from them
regarding the study objectives by making them aware of the type information required. The
researcher ensured confidentiality about the information to be obtained from the respondents.
3.11 Limitation to the Study
Because financial reporting effectiveness is a very sensitive subject. There was some resistance by
respondents to offer information which made data collection a challenge especially because
investigations in the system was misconstrued to be investigations on the users and managers of
the system. This was especially so in the wake of recently unearthed high profile financial
mismanagement cases that have earthed in many district of Uganda (Auditor General, 2015).
However the researcher minimised this by ensuring that the purpose of research and what the data
is intended for was explained to the respondents before the interviews commenced and
questionnaires administered to put the respondents at ease.

14
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF RESULTS
4.0 Introduction
The purpose of the study was to determine the effect of Integrated Financial Management
Information System on Financial Reporting Effectiveness of District Local Governments in
Uganda. This chapter presents the results and findings of the study. The chapter begins by
analysing the general information of the respondents, and then presents the analysis of the effect
of Effect of IFMIS Budget Preparation and Financial Reporting Effectiveness of Local
Governments. The chapter then presents the analysis of the effect of Effect of IFMIS Transactions
Processing and Financial Reporting Effectiveness of Local Governments and then ends with the
analysis of the effect of Effect of IFMIS Report Preparation and Financial Reporting Effectiveness
of Local Governments. The total number of questionnaires distributed were 108.
In this section, the general information/demographic characteristics of respondents such as gender,
age bracket, education level, the department the respondents worked in and period respondents
have worked the department was analysed. The section also analyses the frequency of the usage
of IFMIS in their departments.
4.1 Demographic Characteristics of Respondents
4.1.1 Gender of Respondents
The distribution of the staff according to their gender is as shown in table 4.2. The table shows that
50.9% of the respondents were of female gender while 49.07% of the respondents were of the male
gender. Therefore, both male and female respondents were adequately represented.
Table 2: Showing Gender of Respondents
Gender Frequency Percentage
Male 55 50.9
Female 53 49.07
Total 108 100.0
Source: Primary data

15
4.1.2 Age of Respondents
The distribution of respondents by age is shown in table. The table shows that 38.0% of the
respondents were in the 40-49 years age bracket while those over 50 years were 7.4% of the
respondents. The table also shows that the respondents in the 30-39age brackets were 23.1% whilst
those in the 18-29 age brackets were 31.5% of the respondents. Therefore, the majority (38.0%)
of the respondents were 40-49 years old.
Table 3: Showing Age of Respondents
Age category Frequency Percentage
18-29 34 31.5
30-39 25 23.1
40-49 41 38.0
50 and above 8 7.4
Total 108 100.0
4.1.3 Level of Education of Respondents
The distribution of respondents by their level of education is shown in table below. The table
shows that 82.4% of the respondents were undergraduates while 17.6% had done their Diploma
postgraduates and certificate holders were not there. Thus, the majority of the respondents were
University graduates.
Table 4: Showing Level of Education of Respondents
Level of Education Frequency Percentage
Certificate 0 0%
Diploma 19 17.6
Degree 89 82.4
Postgraduate 0 0%
Total 108 100.0

16
4.1.4 Department of Respondents
The respondents were asked to indicate the departments where they were working. The distribution
is shown in table. The table shows that 13.9% of the respondents were working in the Finance
department while 11.1% were working in the Audit department. Those who were working in the
procurement department were 18.5%, those working in Education department were 9.3%, and
those working in Health were 9.3%, respondents working in the Accounts department were 19.4%,
respondent working in planning were 11.1% while those respondents working in Administration
were 7.4%. Therefore, the majority of the respondents were working in the accounts and
procurement department.
Table 5: Showing Department of Respondents
Department Frequency Percentage
Finance 15 13.9
Audit 12 11.1
Procurement and Marketing 20 18.5
Accounts 21 19.4
Education 10 9.3
Health 10 9.3
Planning 12 11.1
Administration 8 7.4
Total 108 100.0
Source: Krejcie & Morgan, (1970).
4.1.5 Number of years spent in the Department
The respondents indicated their tenure as captured in table below. The table shows that 2.9% of
the respondents had worked for less than a year while those who had worked for 1-3 years were
32.4% of the respondents. The respondents who had worked for 4-10 years were 56.5% of whereas
those who worked for over ten years were 8.3%. Therefore, majority of the respondents worked
with the district for at least four years.

17
Table 6: Showing Period spent in the department
Period spent in the department Frequency Percentage
Less than 1 year 3 2.8
1-3 years 35 32.4
4-10 years 51 56.5
More than 10 years 9 8.3
Total 104 100.0
4.2 Frequency of IFMIS Use
The respondents were asked to indicate the frequency with which they used IFMIS. Table shows
that 49.1% of the respondents used IFMIS daily whereas 9.3% of the respondents used the software
weekly. The table also shows that 24.1% of the respondents used IFMIS monthly while 17.6% of
the respondents used the software quarterly and lastly, 0.0% of the respondents used IFMIS
annually. Therefore, the majority of the respondents used IFMIS daily.
Table 7: Showing Frequency of IFMIS Use
The level of IFIMIS usage Frequency Percentage
Daily 49.1 49.1
Weekly 10 9.3
Monthly 26 24.1
Quarterly 19 17.6
Annually 0 0%
Total 108 100.0
4.3 IFMIS budget preparation and financial reporting effectiveness of Local Governments
The study sought to assess the of IFMIS budget preparation on financial reporting in district local
government as an objective and the findings presented in the table below relates to this objective.

18
Table 8: Showing budget preparation and financial reporting Effectiveness (n=108)
Statement
Mean
Standard
Deviation
Min Max
It is easy to prepare a budget using IFMIS 4.56 0.636 2 5
IFMIS is realistic to resources available for spending easily 4.06 0.537 2 5
IFMIS ensures Equity and makes budget priorities easy 4.08 0.664 3 5
IFMIS enables us to determine budget costs so easily 3.43 1.172 2 5
IFMIS makes it easy to integrate all departmental budget together including
the ranking of their projects and activities for funding (flexible)
3.90 0.757 2 5
It enable public to offer budget guidance and proposals before approval 3.47 1.222 1 5
It easy tracks income and expenditure of the district using IFMIS 3.77 1.072 1 5
IFMIS enables the district to update its budget quickly 3.84 0.915 2 5
IFMIS makes presentation and discussion of the budget so convenient 3.82 1.155 1 5
IFMIS makes sharing of budget information so quick and easy 3.54 1.042 1 5
Authorization of the budget is quick 4.27 0.672 3 5
The study sought to assess the respondents’ views on whether IFMIS enabled them to prepare a
district budget with ease. Table 8 indicates that the mean support on this view was 4.56 which
implies that the majority of the respondents supported that the view that IFMIS eases budget
preparation process. However 0.636 of the respondents deviated from the mean on the view that
IFMIS eases budget preparation process. The minimum response rate on whether IFMIS enabled
easy budget preparation was 2 and the maximum was 5. This therefore means that, majority of the
respondents were in support of the view that IFMIS helped them to easily prepare a district budget.
About whether IFMIS is realistic to available resources for spending, table 8 indicates that the
mean support on this view was 4.06 which expressed that the majority of the respondents supported
that the view that IFMIS is realistic to available resources for spending. 0.537 of the respondents
deviated from the mean of 4.06 on the view that IFMIS is realistic to available resources for
spending. The minimum response rate on this view was 2 and the maximum was 5. This picture
therefore implies that, majority of the respondents were in support of the view that IFMIS is
realistic to available resources for spending.

19
The study sought to examine the respondents’ views on whether IFMIS ensures equity in budget
priorities. Table 8 indicates that the mean support for this view was 4.08 and this is far away from
the real mean which indicated that the majority of the respondents supported that the view that
IFMIS ensures equity in budget priorities. However 0.664 of the respondents deviated from that
mean on the view that IFMIS ensures equity in budget priorities. The minimum response rate on
this view was 3 and the maximum was 5. The results therefore shows that, majority of the
respondents were in support of the view that IFMIS ensures equity in budget priorities.
The study sought to analyse the respondents’ views on whether IFMIS determines budget costs.
Table 8 indicates that the mean support on this view was 3.43. This mean show that the majority
of the respondents supported that the view that IFMIS determines budget costs. The results. The
findings also reflected 1.172 of the respondents deviated from the mean on this view that IFMIS
determines budget costs. The minimum response rate on this view was 1 and the maximum was 5.
These results therefore means that, majority of the respondents were in support of the view that
IFMIS determines budget costs.
The respondents were also asked about whether IFMIS integrates and ranking departmental
budget. Table 8 results indicates that the mean support for this view was 4.56. This mean is
stretching to 5 which showed that the majority of the respondents supported that the view that
IFMIS integrates and ranking departmental budget. However 0.636 of the respondents deviated
from that mean on the view that IFMIS integrates and ranking departmental budget process but
this is too low. The minimum response support rate was 2 and the maximum was 5. The results
therefore means that, majority of the respondents were in support of the view that IFMIS integrates
and ranking departmental budget.
The study aimed at examining the respondents’ views on whether IFMIS makes quick budget
authorization. Findings from table 8 showed the mean support of 4.27 which show that the majority
of the respondents supported that the view that IFMIS makes quick budget authorization although
0.672 of the respondents deviated from the mean on the view that IFMIS makes quick budget
authorization. The minimum response support rate was 3 and the maximum was 5. These results
therefore implies that, majority of the respondents were in support of the view that IFMIS makes
quick budget authorization.

20
Table 9: Linear regression of Budget preparation and financial reporting effectiveness
Model Summary
R R Square
Adjusted
R Square
.325(a) .106 .097
a Predictors: (Constant), Uses IFMIS to prepare Budget
Coefficients (a)
Mode Coefficients Sig.
Constant .975 .000
Uses IFMIS to prepare Budget .325 .001
a Dependent Variable: Financial Reporting Effectiveness
Findings from the model summary 1 above, indicate that there is a significant and positive
correlation between IFMIS budget preparation and financial reporting effectiveness (r=0.325**
p=0.001) and the extent to which this variable affect the financial reporting effectiveness is
𝑟2
=0.106 which is below 0.01 (p<0.01). The finding show that there is a significant relationship
between budget preparation using IFMIS and financial reporting effectiveness. These results have
often been experience with the introduction of IFMIS in local government which was one of the
objective of IFMIS in Ugandan district.
The study sought to assess the effect of IFMIS Budget preparation on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in preparing budgets are
0.325 times more likely to be effective in reporting financial matters than those departments that
used IFMIS to prepare budgets. The findings also show a significance level of 0.001 meaning that
departments that used IFMIS to prepare budgets lead to effective financial reporting in the district.
The results therefore show that there is significant effect of IFMIS budget preparation and financial
reporting effectiveness in the district. These results were are attributed to the strict follow of the
budgeting rules

21
4.5 Transactions Processing and Financial Reporting Effectiveness of Local Governments
The study sought to analyse the of IFMIS transaction process on financial reporting in district local
Table 10: Showing Transactions Processing and Financial Reporting Effectiveness (n=10)
Statement Mean
Standard
Deviation
Min Max
All district’s transactions both receipts and payments are processed through
IFMIS
4.42 0.569 3 5
IFMIS offers rapid and quick response to the concerned parties 4.26 0.483 3 5
Only budgeted activities and authorized ones for funding is processed 4.13 0.654 3 5
IFMIS detects the error in process of authorization so quickly 3.59 1.137 1 5
IFMIS organizes and structure information about spending of the district 3.62 1.232 1 5
Only captured and validated transactions are allowed for processing 3.76 1.102 1 5
IFMIS allows only factual information to be processed 4.19 0.966 1 5
IFMIS makes it to trace all stages of transaction processing in the district 4.15 0.498 3 5
IFMIS allows timely sharing of transaction information to all concerned
parties in the district
3.92 0.844 2 5
IFMIS makes bank reconciliation automatically and offers information 3.71 0.982 2 5
IFMIS makes transaction process participatory in the district 3.77 1.184 1 5
IFMIS keeps the transaction and database information for reference. 4.12 0.910 2 5
The study sought to examine the respondents’ views on whether IFMIS processes all transaction
receipts and payments of the district. Table 10 indicates that the mean support on this view was
4.42. This mean support indicates that the majority of the respondents supported that the view that
IFMIS processes all transaction receipts and payments of the district. The findings also indicates
0.569 of the respondents deviated from the mean on the view that IFMIS processes all transaction
receipts and payments of the district. The minimum response support rate was 3 and the maximum
was 5. These finding therefore indicated that, majority of the respondents were in support of the
view that IFMIS processes all transaction receipts and payments of the district.

22
The study sought to analyse the respondents’ views on whether IFMIS offers rapid and quick
response of the transaction. Table 10 indicates that the mean support on this view was 4.26. This
mean was stretching next to greater 5 which show that the majority of the respondents supported
that the view that IFMIS offers rapid and quick response of the transaction, although there were
about 0.483 of the respondents deviated from the mean on the view that IFMIS offers rapid and
quick response of the transaction. The minimum response support rate was 3 and the maximum
was 5. The results therefore indicated that, majority of the respondents were in support of the view
that IFMIS offers rapid and quick response of the transaction.
The study sought to establish the respondents’ views on whether IFMIS allows only budgeted
activities are processed for funding. Table 10 indicates that the mean support was 4.13. This mean
if great which show that the majority of the respondents supported that the view that IFMIS allows
only budgeted activities are processed for funding. But 0.654 of the respondents deviated from the
view that IFMIS allows only budgeted activities are processed for funding despite high support for
the view. The minimum response support rate was 3 and the maximum was 5. This therefore means
that, majority of the respondents were in support of the view that IFMIS allows only budgeted
activities are processed for funding.
The study sought to determine the respondents’ views on whether IFMIS quickly detects errors in
the authorization process. Table 10 indicates that the mean support was 3.59 which show that the
majority of the respondents supported that the view that IFMIS quickly detects errors in the
authorization process. 1.137 of the responses from the respondents deviated from the view that
IFMIS quickly detects errors in the authorization process. The minimum response support rate was
1 and the maximum was 5. This therefore means that, majority of the respondents were in support
of the view that IFMIS quickly detects errors in the authorization process.
The study sought to examine the respondents’ views on whether IFMIS organizes and structures
information about district spending. Table 10 indicates that the mean support was 3.62. This mean
is great which show that the majority of the respondents supported that the view that IFMIS
organizes and structures information about district spending. However 1.232 of the respondents
deviated from that mean on the view that IFMIS organizes and structures information. The
minimum response support rate was 1 and the maximum was 5. This therefore means that, majority

23
of the respondents were in support of the view that IFMIS organizes and structures information
about district spending.
The respondents were also asked about whether IFMIS organizes and structures information about
district spending. Results in table 10 indicates that the mean support on this view was 3.62 which
show that the majority of the respondents supported that the view that IFMIS organizes and
structures information about district spending. However 1.232 of the respondents deviated from
the mean on the view that IFMIS organizes and structures information. The minimum response
support rate was 1 and the maximum was 5. These results therefore implies that, majority of the
respondents were in support of the view that IFMIS organizes and structures information about
district spending.
The views of the respondents were also sought as to whether IFMIS processes only captured and
validated transactions. Results in table 10 indicates that the mean support on this view was 3.76
which showed that the majority of the respondents supported that the view that IFMIS processes
only captured and validated transactions. The findings also indicated 1.102 of the respondents who
deviated from the mean on the view that IFMIS processes only captured and validated transactions.
The minimum response support rate was 1 and the maximum was 5. This therefore means that,
majority of the respondents were in support of the view that IFMIS processes only captured and
validated transactions.
The opinions of the respondents were also sought as to whether IFMIS allows only factual
information to be processed. Table 10 indicates that the mean is 4.19 which show that the majority
of the respondents supported that the view that IFMIS allows only factual information to be
processed. However 0.966 of the respondents deviated from the view that IFMIS allows only
factual information to be processed. The minimum response support rate was 1 and the maximum
was 5. This therefore means that, majority of the respondents were in support of the view that
IFMIS allows only factual information to be processed
The study sought to establish the respondents’ views on whether IFMIS can trace all the stages of
the transaction processed. Finding from table 10 indicates that the mean support on this view was
4.19 which show that the majority of the respondents supported that the view that IFMIS can trace
all the stages of the transaction processed. However 0.966 of the respondents deviated from the
view that IFMIS can trace all the stages of the transaction processed. The minimum response

24
support rate was 1 and the maximum was 5. These results therefore means that, majority of the
respondents were in support of the view that IFMIS can trace all the stages of the transaction
processed.
About whether IFMIS can trace all the stages of the transaction processed. Results from table 10
indicates that the mean support on this view was 4.15 which is close to greater 5 indicating that
the majority of the respondents supported that the view that IFMIS can trace all the stages of the
transaction processed. However 0.498 of the respondents deviated from the view that IFMIS can
trace all the stages of the transaction processed. The minimum response support rate was 1 and the
maximum was 5. These findings therefore means that, majority of the respondents were in support
of the view that IFMIS can trace all the stages of the transaction processed
The study sought to analyse the respondents’ views on whether IFMIS allows timely sharing of
the transaction information. Findings from table 10 indicates that the mean support on this view
was 3.92 which show that the majority of the respondents supported that the view that IFMIS
allows timely sharing of the transaction information. However 0.844 of the respondents deviated
from the view that IFMIS allows timely sharing of the transaction information. The minimum
response support rate was 2 and the maximum was 5. This therefore means that, majority of the
respondents were in support of the view that IFMIS allows timely sharing of the transaction
information
The study sought to examine the respondents’ views on whether IFMIS makes automatic bank
reconciliation. Table 10 indicates that the mean support on this view was 3.71 which show that the
majority of the respondents supported that the view that IFMIS makes automatic bank
reconciliation. However 0.982 of the respondents deviated from the view that IFMIS makes
automatic bank reconciliation. The minimum response rate was 2 and the maximum was 5. This
therefore indicated that, majority of the respondents were in support of the view that IFMIS makes
automatic bank reconciliation.
About whether IFMIS makes the transaction process participatory. Table 10 indicates that the
mean is 3.71 which show that the majority of the respondents supported that the view that IFMIS
makes the transaction process participatory. 0.982 in this respect shows responses of the
respondents deviated from the mean on the view that IFMIS makes the transaction process
participatory. The minimum response rate was 1 and the maximum was 5. These finding indicated

25
that, majority of the respondents were in support of the view that IFMIS makes the transaction
process participatory
The study sought to establish the respondents’ views on whether IFMIS keeps transaction and
database information for reference. Table 10 indicates that the mean support was 4.12 which is
close to the 5, this indicated that the majority of the respondents supported that the view that IFMIS
keeps transaction and database information for reference. However 0.910 of the respondents
deviated from the view that IFMIS keeps transaction and database information for reference. The
minimum response rate was 2 and the maximum was 5. This therefore implies that, majority of the
respondents were in support of the view that IFMIS keeps transaction and database information
for reference.
Table 11: Linear regression of Transaction processing and financial reporting effectiveness
Model Summary
R R Square
Adjusted
R Square
.537(a) .289 .282
a Predictors: (Constant), Used IFMIS for transaction processing
Coefficients (a)
Constant .571 .000
Used IFMIS for transaction processing .545 .000
The findings indicate that there is a great effect between IFMIS transaction processing and
financial reporting effectiveness r=0.537** p= 0.000, and the extent to which IFMIS transaction
processing affect the financial reporting effectiveness is 𝑟2
= 0.289 which p<0.01). These finding
therefore indicated that when using IFMIS in any transaction in the district paves higher chance of
being effective in reporting financial matters.
The study sought to establish the effect of IFMIS Transaction Processing on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in processing transaction are
0.545 times more likely to be effective in reporting financial matters than those departments that

26
did not use IFMIS in processing transactions in the district. The findings show 0.000 significance
level which implies that departments that used IFMIS to process transaction were effective in
reporting financial transactions in the district. The findings in the regression 0.000 significance
level implying that there is a significant effect of IFMIS Transaction processing on financial
reporting effectiveness in the district. This great effect is attributed to the fact that after the
information has been fed into the system it is easier to monitor and quickly process any transaction
using the system so the system can only release what has been fed in it for a particular item.
4.7 Report Preparation and Financial Reporting Effectiveness of Local Governments
The study sought to examine the of IFMIS report preparation on financial reporting in district local
Table 12: Showing Report Preparation and Financial Reporting Effectiveness (n=108)
Statement Mean
Standard
Deviation
Min Max
It is easy to prepare a financial report using IFMIS 4.23 0.937 1 5
It is easy to organize and structure a report using IFMIS 4.20 0.597 2 5
The system produces a report timely and friendly for the user 3.64 0.775 2 5
IFMIS help to derive the specific information required to carry out duties 3.73 0.895 2 5
Reports produced using the system are straight forward and facilitates
analysis
3.75 0.693 2 5
IFMIS presents reports in a purposeful way as required by the district 3.75 0.983 2 5
IFMIS ensure release of comprehensive but compact report for the 3.80 1.028 2 5
Factual and accurate reports are prepared through IFMIS 4.02 0.945 2 5
IFMIS reports accurately discloses the financial position of the district 4.39 0.793 2 5
The report prepared with IFMIS is clear and relevant to the district 4.26 0.557 2 5
Respondents were asked whether IFMIS ease budget preparation. Findings on table 12 indicates
that the mean support on this view was 4.23 which show that the majority of the respondents
supported that the view that IFMIS ease budget preparation. However 0.937 of the respondents
deviated from the view that IFMIS ease budget preparation. The minimum response support rate
was 1 and the maximum was 5. This therefore, means that majority of the respondents were in
support of the view that IFMIS ease budget preparation

27
The study also sought whether IFMIS organizes and structures financial report. Table 12 indicates
that the mean is 4.20 which show that the majority of the respondents supported that the view that
IFMIS organizes and structures financial report. However 0.597 of the respondents deviated from
the view that IFMIS organizes and structures financial report. The minimum response rate was 2
and the maximum was 5. This therefore, means that majority of the respondents were in support
of the view that IFMIS organizes and structures financial report
The views of the respondents was sought as to whether IFMIS produces timely and friendly reports
to the user. Table 12 indicates that the mean is 3.64 which show that the majority of the respondents
supported that the view that IFMIS produces timely and friendly reports to the user. However
0.775 of the respondents deviated from the view that IFMIS makes the transaction process
participatory. The minimum response rate was 2 and the maximum was 5. This therefore, means
that majority of the respondents were in support of the view that IFMIS produces timely and
friendly reports to the user
The opinion of the respondents was sought as to whether IFMIS helps to derive at specific
information in the report for duties. Table 12 indicates that the mean is 3.73 which show that the
majority of the respondents supported that the view that IFMIS helps to derive at specific
information in the report for duties. However 0.895 of the respondents deviated from the view that
IFMIS makes the transaction process participatory. The minimum response rate was 2 and the
maximum was 5. This therefore, means that majority of the respondents were in support of the
view that IFMIS helps to derive at specific information in the report for duties.
The study sought to determine the respondents’ views on whether IFMIS produces straight forward
reports which enable analysis. Table 12 indicates that the mean is 3.75 which show that the
majority of the respondents supported that the view that IFMIS produces straight forward reports
which enable analysis. However 0.693 of the respondents deviated from the view that IFMIS
makes the transaction process participatory. The minimum response support rate was 2 and the
maximum was 5. This therefore means that, majority of the respondents were in support of the
view that IFMIS produces straight forward reports which enable analysis.
The study sought to determine the respondents’ views on whether IFMIS reports only purposeful
reports required by the district. Table 12 indicates that the mean is 3.75 which show that the
majority of the respondents supported that the view that IFMIS reports only purposeful reports

28
required by the district. However 0.983 of the respondents deviated from the view that IFMIS
reports only purposeful reports required by the district. The minimum response support rate was 2
and the maximum was 5. This therefore means that, majority of the respondents were in support
of the view that IFMIS reports only purposeful reports required by the district
The opinion of the respondents was sought as to whether IFMIS releases comprehensive and
compacted financial reports. Table 12 indicates that the mean is 3.80 which show that the majority
of the respondents supported that the view that IFMIS releases comprehensive and compacted
financial reports. However 1.028 of the respondents deviated from the view that IFMIS releases
comprehensive and compacted financial reports. The minimum response support rate was 2 and
the maximum was 5. This therefore showed that, majority of the respondents were in support of
the view that IFMIS releases comprehensive and compacted financial reports.
The study sought to determine the respondents’ views on Whether IFMIS prepares only factual
and accurate reports. Table 12 indicates that the mean is 4.02 which show that the majority of the
respondents supported that the view that IFMIS prepares only factual and accurate reports.
However 0.945 of the respondents deviated from the view that IFMIS prepares only factual and
accurate reports. The minimum response support rate was 2 and the maximum was 5. This picture
reflected that, majority of the respondents were in support of the view that IFMIS prepares only
factual and accurate reports.
The study question also sought to determine whether IFMIS accurately discloses financial position
of the district. Table 12 indicates that the mean is 4.39 which show that the majority of the
respondents supported that the view that IFMIS accurately discloses financial position of the
district. However 0.793 of the respondents deviated from the view that IFMIS accurately discloses
financial position of the district. The minimum response support rate was 2 and the maximum was
5. This therefore revealed that, majority of the respondents were in support of the view that IFMIS
accurately discloses financial position of the district.
About whether IFMIS whether IFMIS prepares clear and relevant financial reports for the district.
Table 12 indicates that the mean is 3.75 which show that the majority of the respondents supported
that the view that IFMIS prepares clear and relevant Financial reports for the district. However
0.693 of the respondents deviated from the view that IFMIS prepares clear and relevant financial
reports for the district. The minimum response rate was 2 and the maximum was 5. This therefore

29
means that, majority of the respondents were in support of the view that IFMIS prepares clear and
relevant financial reports for the district.
Table 13: Linear regression between Report preparation on financial reporting effectiveness
Model Summary
R R Square
Adjusted
R Square
.539(a) .291 .284
a Predictors: (Constant), Used IFMIS for report preparation
Coefficients (a)
(Constant) .685 .000
Used IFMIS for report preparation .582 .000
About the effect of IFMIS financial report preparation on financial reporting effectiveness, the
results indicate that there is a significant positive relation between the two variables with
r=.0.539**, and the extent to which financial report preparation affect the reporting effectiveness
was 0.29 (𝑟2
= 0.29) 𝑤𝑖𝑡ℎp=0.000 which p<0.01. This findings shows that there is an
improvement of financial reporting effectiveness when districts use the system to prepare financial
reports. This means that if district can fully use the system in all it financial business, there will be
limited loss of money hence effective service delivery in the district.
The study sought to examine the effect of IFMIS Report preparation on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in preparing financial report
were 0.582 times more likely to be effective in reporting financial matters than those departments
that did not use IFMIS in preparing financial reports in the district. The findings show 0.000
significance level which implies that departments that used IFMIS to preparing financial reports
were effective in financial reporting in the district. The findings in the regression tables therefore
implies that there is a significant impact of IFMIS financial report preparation on financial
reporting effectiveness in the district and significant 0.000 were constant variable or unexplained
figures in the study. Because is already with information that is required to prepare a financial

30
report, it is easy prepare a report which increases the system’s effectiveness in reporting financial
matters.
4.9 IFMIS and Financial Reporting Effectiveness
The study sought to determine the impact of IFMIS on financial reporting in district local
Table 14: Showing IFMIS and Financial Reporting Effectiveness (n=108)
Statement
Mean
Standard
Deviation
Min Max
IFMIS is consistent in reporting District financial matters 3.30 1.013 1 5
Reports prepared using IFMIS are accurate/systematic 4.19 0.986 1 5
IFMIS ensures timely reporting of the transaction made as required 4.39 0.674 3 5
The system is transparent when reporting financial matters 4.23 0.727 2 5
IFMIS reports on required information asked by the user 4.32 0.579 3 5
The study sought to examine the respondents’ views on whether IFMIS produces complete and
self-explanatory financial reports. Table 14 indicates a mean of 3.30 which show that the majority
of the respondents supported that the view that IFMIS produces complete and self-explanatory
financial reports. However 1.013 of the respondents deviated from the view that IFMIS produces
complete and self-explanatory financial reports. The minimum response rate on this view was 1
and the maximum was 5. The findings therefore shows that, majority of the respondents supported
view that IFMIS produces complete and self-explanatory financial reports.
About whether IFMIS is consistent in reporting district financial matters, Table 14 indicates that
the view attracted much support with a mean of 4.19 which implies that the majority of the
respondents supported that the view that IFMIS is consistent in reporting district financial matters
although the same table 9 shows that 0.986 of the respondents deviated from the view that IFMIS
is consistent in reporting district financial matters. The minimum response rate on this view was 1
and the maximum was 5. This therefore implies that, majority of the respondents supported the
view that IFMIS is consistent in reporting district financial matters which is a very important
component of financial reporting effectiveness.

31
The study also sought to determine the respondents’ views on whether IFMIS prepares accurate/
systematic financial reports of the district. Table 14 indicates that the mean was 4.39 which show
that the majority of the respondents supported that the view that IFMIS prepares accurate/
systematic financial reports. In this respect 0.674 responses of the respondents deviated from the
view that prepares accurate/ systematic financial reports. The table also shows a minimum
response rate of 3 and the maximum was 5. These findings therefore implies that, majority of the
respondents were in support of the view that IFMIS prepares accurate/ systematic financial reports.
The study also sought to analyse the respondents’ views on whether IFMIS ensure timely reporting
of the transaction made in the district. Table 14 indicates that the mean is 4.23 which show that
the majority of the respondents supported that the view that IFMIS ensure timely reporting of the
transaction made in the district while 0.727 of the responses deviated from the view that ensure
timely reporting of the transaction made in the district. The minimum response rate was 2 and the
maximum was 5. This therefore means that, majority of the respondents were in support of the
view that IFMIS ensure timely reporting of the transaction made in the district.
The study sought to analyse the respondents’ views on Whether IFMIS is transparent when
reporting financial matters. Table 14 indicates that the mean is 4.32 which show that the majority
of the respondents supported that the view that IFMIS is transparent when reporting financial
matters. However 0.579 of the respondents deviated from the view that IFMIS is transparent when
reporting financial matters. The minimum response rate was 3 and the maximum was 5. This
therefore, means that majority of the respondents were in support of the view that IFMIS is
transparent when reporting financial matters.
The study sought to assess the respondents’ views on whether IFMIS reports on information as
asked by the user. Table 14 indicates that the mean is 4.16 which show that the majority of the
respondents supported that the view that IFMIS reports on information as asked by the user.
However 0.860 of the respondents deviated from the view that IFMIS reports on information as
asked by the user. The minimum response rate was 2 and the maximum was 5. This therefore
showed that, majority of the respondents were in support of the view that IFMIS reports on
information as asked by the user.

32
Table 15: Summary table of Regression of Financial Reporting Effectiveness and IFMIS
Budget Preparation, Transaction Processing and Report Preparation
Variables R Coefficient Significance
IFMIS budget preparation .325 .325 .001
IFMIS transaction processing .537 .545 .000
IFMIS report preparation .539 .582 .000
The study sought to assess the effect of IFMIS Budget preparation on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in preparing budgets are .325
times more likely to be effective in reporting financial matters than those departments that used
IFMIS to prepare budgets. The findings also show a significance level of 0.001 meaning that
departments that used IFMIS to prepare budgets lead to effective financial reporting in the district.
The results therefore show that there is significant effect of IFMIS budget preparation and financial
reporting effectiveness in the district. These results were are attributed to the strict follow of the
budgeting rules
The study sought to establish the effect of IFMIS Transaction Processing on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in processing transaction are
.545 times more likely to be effective in reporting financial matters than those departments that
did not use IFMIS in processing transactions in the district. The findings show 0.000 significance
level which implies that departments that used IFMIS to process transaction were effective in
reporting financial transactions in the district. The findings in the regression tables implies that
there is a significant impact of IFMIS Transaction processing on financial reporting effectiveness
in the district. This great effect is attributed to the fact that after the information has been fed into
the system it is easier to monitor and quickly process any transaction using the system so the
system can only release what has been fed in it for a particular item.
The study sought to examine the effect of IFMIS Report preparation on Financial Reporting
Effectiveness. The findings indicate that departments that use IFMIS in preparing financial report
are .582 times more likely to be effective in reporting financial matters than those departments that
did not use IFMIS in preparing financial reports in the district. The findings show 0.000
significance level which implies that departments that used IFMIS to preparing financial reports

33
were effective in financial reporting in the district. The findings in the regression tables therefore
implies that there is a significant impact of IFMIS report preparation on financial reporting
effectiveness in the district and significant 0.000 were constant variable or unexplained figures in
the study. Because is already with information that is required to prepare a financial report, it is
easy prepare a report which increases the system’s effectiveness in reporting financial matters.
In conclusion, the findings show that IFMIS has great effect on financial reporting effectiveness
in the district given the fact that the budgeting follow the law and rules that guide budgeting in the
district and therefore the system is an asset in improving financial reporting of the district and
achieve value for money.

34
CHAPTER FIVE:
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter discusses the findings, makes conclusions and recommendations. This chapter starts
with a simple summary of the study. The chapter then proceeds to discuss the study findings
according to the set objectives. Conclusions are then drawn in view of the discussion under each
objective and finally, the chapter makes recommendations for improvement in financial reporting
effectiveness of the district as well as suggestions for future study.
5.2 Summary
The purpose of the study was to assess the effect of IFMIS on the financial reporting effectiveness
of district local governments in Uganda. The three specific objectives of the study were: to assess
the effect of Budget Preparation on Financial Reporting Effectiveness of District Local
Governments, to establish the effect of Transaction Processing on Financial Reporting
Effectiveness of District Local Governments, and to examine the effect of Report Preparation on
Financial Reporting Effectiveness of District Local Governments.
Descriptive case study research design was employed due to its ability to provide a snapshot of the
current state of affairs. The study population were staffs of Wakiso district local government. The
sample population comprised of 108 staff working in the finance, accounts, procurement and audit
departments, Health, community based and office of the Chief Administrative Officer and
Stratified and purposive sampling technique were used. Questionnaire and non-structured
interview schedule were used to collect the data and the response rate of 100% was recorded. The
data was analysed using SPSS for descriptive and linear regression and the findings were presented
in tables.
5.3 Discussions
The discussion in this section related to the objectives of the study that include; the effect of IFMS
budget preparation on financial reporting effectiveness, effect of IFMIS transaction processing on
financial reporting effectiveness, and the effect of IFMIS report preparation on financial reporting
effectiveness. The discussion was expresses in terms of description and regression in relation to
the literature advanced about the system in ensuring financial reporting effectiveness in district
local governments as seen below;

35
5.3.1 The Effect of IFMIS budget preparation on Financial Reporting effectiveness
The study findings indicate that many of the respondents were of the view that IFMIS budgeting
enabled them to ensure equity in budgeting and being realistic to resources available for the district.
These findings indicate that the IFMIS budgeting system improve the reporting effectiveness of
financial matters in the district. These findings were also reflected in the positive correlation
between the IFMIS budget preparation on financial reporting effectiveness (r=0. 325**, p=0.001
which p<0.01). This offer a consensus agreement with the views of Hendricks (2012) who argue
that IFMIS allow a more standardized and realistic budget formulation across government, while
promoting better control over budget execution through the full integration of budget execution
data. The findings informs that IFMIS improves financial reporting effectiveness of the public
sector specifically local governments. It also allow for the decentralization of financial functions
and processes under the overall control of the Ministry of Finance, enhance financial discipline
and control operating costs by reducing administrative tasks and civil servants’ workload. In line
with this argument, the findings show that majority of the respondents (73%) agreed that it is very
simple to tracksincome and expenditure of the district using IFMIS asseenin appendix 3. These findings
were in line with Braggs (2013) who suggested that Budgeting system plays an important role to
Organisation management, especially in decentralized agencies and that company/District needs
budget to translate all the company's strategies into short-term and long-term plans and objectives.
These results do not differ from the observations of one the respondent who reported that
“Because thesystem’s operation is linked to computer technology, it has a provision which
you click after all the budget details has been captured to prepare a full budget and the
whole budget will be summarized in a few hours as long as the systems network is strong”.
Another respondent from the accounts department reported that
“As long as the environment is conducive with no interruption from anywhere the system
is the best to use in budgeting because if programmed and follow the budgeting rules and
regulations, it improve the information generation financial matters which later we use in
financial reporting for any financial decision to be made”
Following the discussion and interaction with officials in the district, there is a clear picture that
IFMIS is appreciated and what the district need to do to make the system more fruitful is capacity
building of the staff that use the system.

36
The respondents were also asked about whether IFMIS integrates and ranking departmental
budget. Table 8 results indicates that the mean support for this view was 4.56. This mean is
stretching to 5 which showed that the majority of the respondents supported that the view that
IFMIS integrates and ranking departmental budget. However 0.636 of the respondents deviated
from that mean on the view that IFMIS integrates and ranking departmental budget process but
this is too low. The minimum response support rate was 2 and the maximum was 5. The results
therefore means that, majority of the respondents were in support of the view that IFMIS integrates
and ranking departmental budget. These findings agree with Allen and Tommasi (2011)
description of the system as to openness, communication and accountability. When transparency
is achieved in budget reports, the reliability of information is enhanced; in turn financial reporting
is improved. This disagreement may associated to the fact that the system is new in districts and
the respondents have not been trained on how to use it effectively. The study findings also showed
that majority of the respondents 74.0% agreed that using IFMIS make it easy to integrate all
departmental budget together including the ranking of their projects and activities for funding as
in in appendix 3. This was obtained from finding that the IFMIS was effective in improving district
financial budgeting and ranking. These findings were also reflected in the positive correlation
between the IFMIS budget preparation on financial reporting effectiveness (r=0. .291**, p=0.003
which p<0.01).
The findings were consistent with the views of Dener and Young (2015) that the system allocates
resources fairness is referred to the extent in which a firm identify allocating resources policy and
procedures with emphasizes on equity and transparency principles. Transparency can be defined
as "the essential condition for a free and open exchange whereby the rules and reasons behind
regulatory measures are fair and clear to all participants”. The study also showed that majority
73% of the respondents agreed that IFMIS enabled them to tracks income and expenditure of the
district easily as reflected in appendix 3. This corresponded to positive correlation between the
effects of IFMIS on improved financial reporting and IFMIS enabling them to tracks income and
expenditure of the district easily, which implied improved financial reporting effectiveness in
districts by the system.
Similarly, findings showed that majority of the respondents supported that the view that IFMIS is
realistic to available resources for spending. 0.537 of the respondents deviated from the mean of

37
4.06 on the view that IFMIS is realistic to available resources for spending. The minimum response
rate on this view was 2 and the maximum was 5. This therefore implies that, majority of the
respondents were in support of the view that IFMIS is realistic to available resources for spending.
Appendix 3 indicate that majority of the respondents 63.0% agreed that IFMIS provides real time
sharing of budget information so quick and easy. The results were consistent with the observation
put forward by Wamuyu (2013) that making budget data publicly available is necessary to enable
transparent reporting of the government’s financial intentions and of its use of taxes. The study
also found that majority 92.3% of the respondents agreed that it easy to make a district budget
based on resources available using IFMIS and presents the budget in a way that enable analysis.
This agrees with the views of Karatsi (2015) who argued that IFMIS can facilitate timely and
accurate reporting.
These findings move hand in hand with the response made by one of the respondent who
commented that
“The system is so reliable because when a transaction is made, it provides a notification
message to the concerned parties and the amount is has released. This message comes
immediately the transaction is made. So it gives quick update of the amount paid”.
Results from the regression indicate that using IFMIS for budget preparation may lead to effective
financial reporting. The regression findings also show a significance level of 0.002 meaning that
departments that used IFMIS to prepare budgets are more likely to achieve effective financial
reporting in the district. The finding therefore shows that there is significant effect of IFMIS budget
preparation and financial reporting effectiveness in the district and 0.705 in this respect means the
level of error that was cited in the data. These results are attributed to the fact that the system
follow rules and regulation during the budgeting process which positively affects the system’s
performance in ensuring financial reporting effectiveness. These findings are supportive with
views of Karatsi (2015) who argued that IFMIS can facilitate timely and accurate reporting.
5.3.2 The Effect of Financial Transactions Processing on Financial Reporting Effectiveness
The study established the majority of the respondents supported that the view that IFMIS processes
all transaction receipts and payments of the district. These findings agree with the observation
sighted by Diamond and Khemani (2005) who emphasized that it was essential that both receipts

38
and payments are processed by the FMIS, including the payroll payments to ensure that the budget
and accounts are comprehensive. The implication of these results is a reduction in wastage and
irregular/illegal payments which makes the correlation coefficient (r=0.521**, p=0.000) which
p<0.01) significant. This indicate that the system has helped to reduce instances of unauthorized,
unnecessary or irregular expenditure, suggesting that public money was being appropriately
managed through IFMIS which improves financial reporting effectiveness.
The research findings show that the majority of the respondents supported that the view that IFMIS
offers rapid and quick response of the transaction, although there were about 0.483 of the
respondents deviated from the mean on the view that IFMIS offers rapid and quick response of the
transaction. The appendix table 4 about frequencies also indicate that majority of the respondents
98.1% agreed that the system is good at providing rapid and quick transaction responses to the
concerned parties in the district. These findings were in line with the benefits outlined by
proponents of automation cited by Simon et al. (2011). The mean support of 4.13 on this view
showed that the majority of the respondents supported that the view that IFMIS allows only
budgeted activities are processed for funding. The study also study established that majority of the
respondents 84.6% agreed that IFMIS allows only authorized budgeted activities and projects for
funding. This means that the IFMIS encourages due diligence in its users which is consistent with
sound financial reporting principles as emphasized by Moeti, Khalo and Mafunisa (2007) the
system offers rapid response and this has to do with quick information available to the public. The
system said to be responsive if we can produce the maximum and quick amount of financial
information for a given and fixed transaction or payment made.
The study established that the system quickly detects errors in the authorization process and that
majority of the respondents supported that the view that IFMIS quickly detects errors in the
authorization process. This was not different from the findings indicated in the frequency results
in appendix 4 which indicate that majority of the respondents 67.3% agreed that there were inbuilt
analytical tools within IFMIS that detects the error in process of authorization so quickly. This
suggest that the objective of better financial reporting as outlined by Isidore (2012) was fulfilled
through IFMIS. In terms of transaction processing, it is expected that the automation and
interlinking of procurement processes such as requisition, tendering, contract award and payment
has yielded dividends for districts. One of the issued that manifests in the finding which showed

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