Abstract
Efficient financial management is essential for the effective functioning of Universal Secondary Education (U.S.E.) schools in Uganda. However, many U.S.E. schools still face challenges related to fund mismanagement, weak accountability structures, and inadequate internal control mechanisms. Although internal control systems are widely recognised as essential for promoting financial accountability in public institutions, empirical evidence on how specific internal control components influence financial management in U.S.E. schools in the Ugandan context remains limited. This study examined the influence of internal control system components (control environment, risk assessment, and monitoring practices) on financial management in U.S.E. schools in Masaka City. The study was guided by Agency theory, which emphasises that because agents (school managers, head teachers, and bursars) may not always act in the best interests of principals (school owners, boards, or government), strong internal controls such as clear governance structures, risk assessment, and continuous monitoring are essential to guide their decisions, reduce opportunistic behaviour, and ensure that school resources are managed transparently and in alignment with the principals’ goals. This study adopted a quantitative approach with a positivist paradigm using a cross-sectional research design. Data were collected from 32 key financial personnel selected purposively from U.S.E. schools, using a structured questionnaire measured on a 5-point Likert scale. Data analysis was conducted using multiple linear regression, and the study findings revealed a very strong positive relationship between internal control components and financial management (R = 0.968). The model explained 94.3% of the variance in financial management (R² = 0.943). Monitoring practices emerged as the strongest predictor (β = 0.968, p < 0.05), followed by the control environment (β = 0.726, p < 0.05) and risk assessment (β = 0.260, p < 0.05). The findings indicated that enhanced monitoring systems, ethical leadership, organisational discipline, and comprehensive risk identification significantly improve financial accountability, transparency, and resource utilisation in U.S.E. schools. The study recommended that school boards and district education authorities strengthen internal monitoring structures while the Ministry of Education and Sports enforces financial control policies and supports capacity-building for school administrators to enhance accountability and effective resource utilisation.