Internal Audit Function and Budgeting Efficiency in Financial Institutions: A Case of Rwanda Social Security Board

Abstract

The main purpose of this research is to examine Internal audit function and budgeting efficiency in financial institutions in Rwanda specifically in Rwanda Social Security Board (RSSB). The research used descriptive research design with a mixed approach of qualitative and quantitative data. The formula developed by Taro Yamane was employed to determine the sample size (n=52). The findings showed that internal audit plan provides guidelines for auditors’ regular audits (mean 4.29); and internal audit reviews for budgets were made available (mean 4.32). It was also revealed that internal audit advised on budgeting (mean 4.25); internal audit provided assurance to the budgeting efficiency (mean 4.15); the internal audit assured budget management that there was an effective internal control for budgeting (mean 4.21); the internal auditor established audit objectives and scopes accordingly (mean 4.41); and internal audit prevented risks and fraudulent malpractices occurring when budgeting (mean 4.34). and those internal auditors follow up on the agreed management action plan based on audit recommendations (mean 4.24); internal auditors provide follow-up reports within a specified duration of time as guided by the organization’s policies for the exercise (mean 4.01); follow-up reports were shared (mean 4.61). According to the research, there is a strong positive correlation between RSSB's internal audit frequent review and budgeting efficiency (r= .713 r= .000); strong positive degree of relationship between internal audit recommendation and budgeting efficiency (r = .634, r = .004) and strong positive correlation between internal audit follow up and budgeting efficiency (r= .784; r = .000). The study concluded that internal audit, through regular reviews, provision of recommendations, and follow-up contributed to the efficiency of budgeting at RSSB. The study recommended that RSSB should strengthen its internal audit plan as a measure of ensuring that auditors are guided on the strategic follow-up plans to adopt and capture recommendations effectively. Key words: Internal audit, Budgeting efficiency, Public institutions, RSSB