Non-Governmental Organizations (NGOs) have played a key role in improving the social welfare of marginalized or underprivileged communities Tanzania. There has been an increase in the number of organizations receiving funding for the implementation of community development, economic relief, and health disaster relief among others. However, control mechanisms for the management of the funds have been wanting. This paper seeks to assess the effectiveness of financial management systems in NGOs in Arusha Region, Tanzania. The study employed descriptive research design method, and data was collected from 12 NGOs operating in Arusha using the questionnaire method. Data were analyzed using descriptive statistics, and the Pearson correlation was employed to measure the relationship between the variables. The study found that there were good financial management system practices in NGOs in Arusha, Tanzania. It was also found that NGOs applied financial management systems, implying that NGOs have applicable systems in place for financial management. The results further showed that organizational management plays a crucial role in ensuring implementation and supervision of financial management systems. The study further revealed that there was a positive correlation between the financial management system, organization management and the effectiveness of the financial management system. This, in turn, implied that the higher the score means on financial management system and organization management in finances the higher is the influence on effectiveness level of the finance department. The study concluded that NGOs in Arusha Tanzania have an effective financial management system.
Authored by:
David A. O. Aunga1, PHD
Musa O Nyakora2, Prof
Lameck Isaya3
