An Analysis of the Causes of Financial Irregularities in State-Owned Institutions in Zambia

Abstract

The aim of this study was to determine the predictors of the frequency of being cited for financial irregularities. This cross-sectional study employed a self-administered standard structured questionnaire. One hundred and eight respondents comprising directors and deputy directors, heads of accounting, budget and audit units. The findings are that sixty-four (59.3%) of the participants indicated that there institutions were cited frequently for financial irregularities as compared to n = 44 (40.7%) being cited always. There was, however, no statistically significant association between type of institution and the frequency of being cited for financial irregularities (Pearson Chi-Square obs = 0.917; df = 2        and p = 0.632). The Parliamentary Accounts Committee and the Institutional Audit Risk Committees did not perform oversight functions as the composite scores were below the thresholds. The causes of financial irregularities in State Owned Institutions and ministries show two of the predictor variables (a) Audit and Risk Committee and (b) The Parliamentary Accounts Committee have an effect on the institutions being cited for financial irregularities. However, the findings point to the fact that ongoing budget performance monitoring during the fiscal year (of a living and executed budget) in the public sector in these institutions should be done. It is concluded that the findings point to the fact that negative reports by the Auditor General are due to The Parliamentary Accounts Committee and the Board’s Audit and Risk Committee inability to undertake oversight functions. The findings may contribute to the further study of causes of financial irregularities in state owned institutions in Zambia and serve as a reference for policy makers and institutional managers in mitigating financial irregularities and reduce the frequency of being cited for financial irregularities.

Keywords: Oversight, Financial Irregularities, State Owned Institutions, Zambia

DOI: 10.7176/JLPG/123-01

Publication date:August 31^st 2022