Abstract:
The study about the Role of internal control in financial performance of fuel companies in Uganda;
a case study of Gulf Africa Petroleum Corporation. Gapco had being experienced several
challenges losing market share from 8% to 3.97%, and lastly selling 76% of share to Total (U)
Ltd, The study was guided following objectives (1) To examine how Gapco (U) Ltd has provided
an adequate control environment for effective operation (2) To examine how Gapco (U) Ltd has
established enhanced control activities to improve liquidity. (3) To examine how Gapco (U) Ltd
undertakes internal auditing for quality financial reporting. The study was guided Agency model
and stewardship models. The researcher adopted both positivism and phenomenological
approaches known as (combination approach), the study was longitudinal study , the duration is
from {2012-2017}.the researcher employed a case study strategy, the study used a population of
40 and the study used census. Data was collected using Questionnaires and Interview guide as
well as review of available documents and records. The study found that all the activities of the
company are initiated by the top level of directors and management where by directors approves
the overall business strategies and significant policies based on 85% agreed rate, and board of
directors establishes adequate and effective internal control systems and management implements
and develops based on 67%. That the internal audit department is not efficient, is understaffed,
based on 52.5% disagreed rate, internal auditors doesn’t conduct regular audit activities and
doesn’t produce regular audit reports based on 47.5% disagreed rate, although the few reports
produced by the internal audit department address weaknesses in the system. It was further
revealed that there is a clear separation of roles based on 77.5% agreed rate, weaknesses in the
system are addressed, and there is a training program for capacity building in the organization
based on 67.5% agreed. The investigation recommends competence profiling in the Internal Audit
department which should be based on what the company expects the internal audit to do and what
appropriate number staff would be required to do this job. Based on the findings of the study, it is
concluded that the Gapco (U) Ltd had an effective internal control system as supported by the
study findings of clear separation of roles, supervision, and training, However, there are challenges
in the implementation of controls especially considering that the audit function was not well, under
staffed, and were not produced regular report, and audit work was not extended to the upcountry
centers which clearly had affected their efficiency as revealed by this study.