EFFECT OF INTERNAL CONTROL MECHANISMS ON FINANCIAL MANAGEMENT IN LOCAL GOVERNMENT COUNCILS OF PLATEAU STATE

Abstract

This study set out to examine the effect of internal control mechanisms on financial management within the local government councils of Plateau State, Nigeria. The review focused on the four key internal control components adopted in this study: Segregation of Duties (SoD), Authorization and Approval (AAP), Compliance Monitoring (CMT), and Information and Communication (IAC). The study adopted a quantitative research design and was underpinned by a positivist research philosophy. The sample size of the study was 400 respondents drawn from selected local government councils in Plateau State, out of which 391 valid responses were obtained through a structured Google-based questionnaire. The study adopted a survey sampling procedure, and primary data were collected. The technique for data analysis includes descriptive statistics, correlation analysis, and multiple regression analysis. Finding from the regression model showed that segregation of duties, authorization and approval, and information and communication had significant positive effects on financial management, whereas compliance monitoring was not statistically significant on financial management in the local government councils of Plateau State, Nigeria. The study concluded that internal control mechanisms are indispensable for sound financial management in Plateau State local government councils. The effectiveness of these mechanisms directly determines the councils' ability to manage public resources responsibly, deliver services efficiently, and maintain public confidence. The study recommends that the Plateau State Government develop a comprehensive policy framework to institutionalize best practices in internal control systems across all local government councils. This policy should integrate segregation of duties, authorization and approval, information and communication, and compliance monitoring as mandatory standards for financial governance. To ensure sustainability, the framework should be backed by legislation, enforced by the Plateau State Ministry of Local Government and Chieftaincy Affairs, and periodically evaluated by the State House of Assemble.