COMPUTERISATION AND EFFECTIVENESS OF ACCOUNTING SYSTEMS IN LOCAL GOVERNMENTS : A CASE STUDY KISORO DISTRICT LOCAL GOVERNMENT.

BY

TUMWIZERE GAHUTU CHRISTOPHER

07/U/5340/EXT

A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL

FULFILIMENT FOR THE A WARD OF BACHELOR’S DEGREE IN COMMERCE

JULY, 2011

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DECLARATIONI, Tumwizere Gahutu Christopher, hereby declare that the work presented in this report is

completely original and has never been presented to any other University or Institution for the

award

…………………………………….. …………………..

Tumwizere Gahutu Christopher Date

i

APPROVALI certify that Mr. Tumwizere Gahutu Christopher carried out this research under my

supervision

…………………………………………. ………………………...

Mr. Ssajjabbi Vincent Date

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DEDICATIONThe entire piece of work is dedicated to my Late Father Mr. Paul Sebikari and my Late

Mother Hope Sebikari , my wife Lydia Tumwizere my son Paul Mbonye for the love they

showed me and the support they gave me.

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ACKNOWLEDGEMENTAbove all, I praise God Almighty who is the giver of all wisdom, Knowledge and

understanding, without whom I would not have been able to start on this piece of work.

Thank you Lord for your blessing.

Great thanks go to my brothers and sisters Dr Gerald Nizeyimana, Mr. Sabiti Gideon, and Mr.

David Ngirabakunzi, Mrs. Norah Nteziyaremye Miss Annah Nyirahagumimana for their

encouragement and sacrifice and being there for me. May God bless bless you abundantly.

To my supervisor Mr. Ssejjabbi Vincent who has been a parent. Being a busy person you still

spared time for me and without your parental and professional guidance, this research would

not be a success. May God Bless you.

I wish to express my appreciation to the officials of Kisoro District Local Government for

both financial support and the information they gave me while studying and when carrying

this research for they availed me with the relevant information that I needed to complete this

research.

I cannot forget my friends who have been a source of strength and confidence to me. All I can

say is that thank you for your encouragement.

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TABLE OF CONTENTS

DECLARATION.........................................................................................................................i

APPROVAL...............................................................................................................................ii

DEDICATION...........................................................................................................................iii

ACKNOWLEDGEMENT.........................................................................................................iv

TABLE OF CONTENTS............................................................................................................v

ABSTRACT...............................................................................................................................vi

CHAPTER ONE: INTRODUCTION.........................................................................................1

1.1 BACK GROUND OF STUDY.............................................................................................1

1.2 STATEMENT OF THE PROBLEM....................................................................................3

1.3 PURPOSE OF THE STUDY..............................................................................................3

1.4 RESEARCH QUESTIONS..................................................................................................3

1.5 SCOPE OF THE STUDY.....................................................................................................4

1.6 SIGNIFICANCE OF THE STUDY......................................................................................4

CHAPTER TWO: LITERATURE REVIEW..........................................................................5

2.0 INTRODUCTION..............................................................................................................5

2.1 COMPUTERIZATION.........................................................................................................5

2.2 ACCOUNTING SYSTEM...................................................................................................6

2. 3 ACCOUNTING PROCEDURES........................................................................................7

2.4 BENEFITS OF COMPUTERIZED ACCOUNTING SYSTEM..........................................9

2.5 PROBLEMS ASSOCIATED WITH COMPUTERISATION...........................................10

CHAPTER THREE: METHODOLOGY.................................................................................12

3.0 INTRODUCTION..............................................................................................................12

3.1 RESEARCH DESIGN......................................................................................................12

3.2 TYPE AND DATA SOURCE............................................................................................12

3.3. METHODS AND INSTRUMENTS OF DATA COLLECTION.....................................12

3.4 DATA ANALYSIS AND PROCESSING:........................................................................12

CHAPTER FOUR: PRESENTATION, INTERPRETATION ANS DISCUSION OF

FINDINGS................................................................................................................................14

4.0 INTRODUCTION..............................................................................................................14

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4.1 DEMOGRAPHICS.............................................................................................................14

4.1.1 GENDER.........................................................................................................................14

4.2.2 AGE OF RESPONDENTS.............................................................................................14

4.2.3 MARITAL STATUS.......................................................................................................15

4.2.4 EDUCATION LEVELS..................................................................................................15

4.2.5 WORKING EXPERIENCE.............................................................................................16

4.3 EFFECTIVENESS OF COMPUTERIZATION.................................................................16

4.4.1 LEVEL OF COMPUTERIZATION IN KISORO DISTRICT LOCAL

GOVERNMENT.......................................................................................................................17

4.4.2 IN YOUR OPINION, IS THE CURRENT LEVEL OF COMPUTERIZATION

APPROXIMATE?....................................................................................................................18

4.4.3 RESPONDENTS WHO SAID THAT THE LEVEL OF COMPUTERIZED

ACCOUNTING IS LOW WERE ASKED TO SATE WHAT SHOULD BE DONE TO

IMPROVE THE SITUATION.................................................................................................18

4.4.4 IS MANAGEMENT CONCERNED ABOUT THE PROBLEMS OF

COMPUTERIZED ACCOUNTING SYSTEM IN YOUR DISTRICT?.................................19

4.4.5 THOSE WHO SAID YES QUESTION 14 WERE ASKED TO SHOW THE

INDICATORS..........................................................................................................................19

4.4.6 ARE THERE CONSTRAINTS THAT LIMIT THE LEVEL OF COMPUTERIZATION

IN YOUR DISTRICT?.............................................................................................................19

4.5 RELATIONSHIP BETWEEN COMPUTERIZATION AND EFFECTIVENESS OF

ACCOUNTING SYSTEM.......................................................................................................20

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS..............22

5.0 SUMMARY........................................................................................................................22

5.1 RECOMMENDATIONS....................................................................................................22

5.2 SUGGESTED AREAS FOR RESEARCH........................................................................23

5.3 CONCLUSION...................................................................................................................23

REFERENCES.........................................................................................................................24

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LIST OF TABLES

Table 1: Gender of Respondents...............................................................................................14

Table 2: Findings on age distribution.......................................................................................14

Table 3: Marital stats of Respondents.......................................................................................15

Table 4Findings on educational level.......................................................................................15

Table 5: Findings on working experience.................................................................................16

Table 6: Findings on whether the local government operates a computerized accounting

system.......................................................................................................................................16

Table 7: Findings on package operated by Kisoro district local government...........................17

Table 8: Responses on whether computerized systems have solved accounting problems......17

Table 9: Findings on the level of computerization...................................................................18

Table 10: Findings on the appropriateness of the accounting system......................................18

Table 11: Findings on the concern of management on problems of computerized accounting

system.......................................................................................................................................19

Table 12: Findings on the relationship between computerization and effectiveness of

accounting system.....................................................................................................................20

Table 13: findings on the description of the relationship.........................................................20

Table 14: Findings on whether computerized accounting system has helped the district to

solve its problem.......................................................................................................................21

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ABSTRACTThis study was designed to find out the effects of computerization and effectiveness of

accounting systems in Local Government. It was specifically intended to establish the effects,

benefits and challenges of a computerized accounting system in the Local Government.

The researcher employed a descriptive research design. This was used to describe newly

generated information about computerized accounting and how it affects performance of the

District Local Government. The respondents included; Chief Administrative Officer, Chief

Finance Officer, Accountants in the accounts Department, Planning Unit and Heads of

Departments.

The data collection methods included use of questionnaires and interview guides to collect in

depth information; they contained open ended and closed questions and data was analyzed

using SPSS.

Computerization of the accounting system leads to improved performance. Other factors like

training staff in new packages, promotions to staff for good performance, increasing

communication among staff, acquiring new skills other than computerization of the

accounting system were also found to have an effect on performance. Employees should

therefore be trained to fit in the system, verify the accuracy of data input and interpersonal

relationships between employees and management should also be enhanced.

This study established that though most literature focuses on total transformation from manual

to a computerized system, given the risks and disadvantages associated with computerized

systems, there is need to use the two systems alongside each other.

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CHAPTER ONE: INTRODUCTION This chapter describes the background of the study, statement of the problem, purpose of the

study research questions, scope of the study and the significance of the study.

1.1 BACK GROUND OF STUDY. Before Computers came into existence prehistoric dwellers painted pictures on walls of their

caves and the incident Egyptians wrote on crude form of papers called papyrus, Whenever

they wanted to record and communicate data and information .2000 years later the abacus

came into existence . Since then, a variety of data processing tools and techniques were

developed until 1946 when the first electronic computer evolved through distinct generation

Which have affected the society in general? ,Nyira 1994,

According to Leliever, 1994, Computerization touches every part of the organizational

activities (Local Governments) whether in financial reporting or in accounting systems in

order to achieve certain goals like effective accounting system that is efficient and effective

collection, recording, analyzing and reporting information. Therefore all Local Government

use Computers. A Computer is a general purpose machine which can receive, store,

manipulate data and output data.

London, 2002, asserts that, Computerization will be imperative if fundamentally positive

achievement is to be realized `in a Local Government (organization) and the priority is to

have urgency in disseminating the right information with least delay.

With Computerization, the accounting system tend to be efficient and effective due to high

Degree of accuracy, a lot of data is handled and stored, editing data becomes easier and

Computers are versatile in nature becomes cost effective, With Computers one can easily

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access information from the website hence interconnectivity; Computers can easily

manipulate mathematical problems to present complete and timely reports.

Before the introduction of computerization in accounting systems many Local Government

used manual accounting systems which basically involved the use human hands in which

people collect the data, analyze it record it in the respective journals post to balance ledgers,

extract the trial balance and then balance sheet (Meigs., 1986).

Computerized accounting system involves computerization of accounting system, which is

established to facilitate decision making. In this, once the data into the computer is analyzed

recorded in respective journals, posted to ledgers. It is easy to extract a trial balance and the

balance sheet when they are needed. Therefore the revolution of computer technology has

introduced extensive changes in technical concept and communication of information this is

because the functions of computers have led to rapid changes in effectiveness of accounting

system. However some organizations (Local Governments) are not enjoying the benefits of

computerized accounting systems as they have continued to face problems as before.

As per European Union Audit Report by National Audit Organization 6th MAY 2003;

www.Nao.Org.

According to David, 1981, “There is efficiency at work place, faster access to information,

reduced storage space and better service delivery”. These strengths boost accountability in the

Local Government, motivate staff and minimizes risks. This assists the accounting system

with increased levels of accuracy, transparency, speed and control of financial information to

the stakeholders. Upon realizing the benefits of strengthening the accounting systems Local

Government have made the computerization of their accounting department a priority.

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1.2 STATEMENT OF THE PROBLEMIn today’s changing environment, the success of Local Government largely depend on

computerization among other factors. Computerization is responsible for increasing efficiency

and effectiveness of transforming inputs and outputs in Local Governments

Over the past years, there has been a tremendous advance in micro computer technology in

terms of process power. Many Local Governments including Kisoro District Local

Government have made varying investments in computer related information technology

hence increasing power of Local Government, In addition Kisoro District Local Government

has recruited skilled manpower, made regular workshops for the accountants and heads of

Departments, made necessary updates in systems. Despite all the above innovations Kisoro

Local Government have continued to raise many complaints about inaccurate figures delays

in report submission to the centre and Ministry of Finance and Economic Planning. Missing

of reports both at the District and at the Centre .Its therefore not clear what is the effect of

computerization on effectiveness of accounting systems in Local Governments.

1.3 PURPOSE OF THE STUDYThe purpose of the study is to investigate the impact of Computerization and effectiveness of

accounting system in Local Governments. Specifically the relationship between

computerization and accounting systems in Kisoro Local Government.

1.4 RESEARCH QUESTIONS(i) What is the nature of computerized accounting system?

(ii) What is the relationship between computerization and effectiveness of accounting

system?

(iii) What is the level of computerization in Kisoro District Local Government?

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(iv) What are other factors that affect effectiveness of accounting systems in Local

Government?

1.5 SCOPE OF THE STUDY Emphasis was put on computerization and accounting system Kisoro District Local

Government covering the accounts departments Chief Finance Officer Chief Administrative

Officer, Planning Unit and Other Heads of Departments within Local Governments.

1.6 SIGNIFICANCE OF THE STUDYThe findings will be used by Kisoro District Local Government in their accounting system,

May also be used by other Local Governments and at the same time a requirement for the

award of a Bachelor of Commerce Degree Makerere University, used by other researchers

who will further research on computerization and accounting system.

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CHAPTER TWO: LITERATURE REVIEW

2.0 INTRODUCTION This chapter presents a review of Literature about computerization and accounting system. It

reviewed different Authors on the subject as well the researchers own intrigue on the

available Literature.

2.1 COMPUTERIZATIONAccording to Bakabulindi, 1999, the aim of computerization was to reduce the risk of failure

to the exercise of consideration of cost. Some Authors suggest two options of changing from

manual system to a computer based system that is to say direct change over. In the former,

manual functions are dropped in favour of computerized process and the manual files being

directly converted, where as in the latter option , the present system continues to run

normally while the new system function fully around it.

Wood 1993, states that a computerized accounting system is a combination of computers,

people, facilities, media procedures and controls that are intended to maintain essential

channel of communication, process certain routine types of transactions and others to

significant internal events and provide information for decision making. The computer

system consists of hardware and software. Hardware refers to machine and related equipment

used in the system. It includes inputs, processing and output devices. Software refers to

materials used in selecting, installing and operating the system, it includes programs, which

are instructions given to the computer.

Obrien 1997, observes that an information system can be manual or computer based system.

Manual system is one in which n data processing activities are carried out by human beings,

aided by some calculating tools such as logarithms and side mile.

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Salemi., 1991, manual system is usually expensive and ineffective as far as human

management of information is concerned. Therefore to ensure efficiency of operations there is

need for computerization. Computerization is derived from the word computerize which

means to change from manual system to one that use computers. Computerization refers to an

action of introducing the computer system or changing from manual system to computer

system Collin 1996

Magara 1996, recognizes changed phase over as one of the option that an organization can

follow to change from manual to computer system. He adds that it involves the conversion

of manual to computer based functions in gradual manner throughout the whole system. It

may be done on a file by file or department by department.

According to Byaruhanga 2001, Asserts that before adopting a computer based system, there

should be a proper planning. He also recognizes the direct and parallel change other

procedures as probably the most important options of changing from manual to computer

based system.

In today’s world, Computers use has spread to every kind of work place, although some Local

Governments are still dominant investigators of computers based system (Wing1996).

However, in practice, the option of changing from manual to a computer based system may

vary from one Local Government to another.

2.2 ACCOUNTING SYSTEMAccording to Synder 2006, Accounting is the art of recording, Summarizing, Analyzing and

reporting of financial transactions. Accounting system can be a simple utilitarian check

register or as with micro soft small business accounting 2006, it can be a complete record of

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all activities of the business providing details of any aspect of business allowing the analysis

of business trends and proving insight into future prospects. Accounting is aback borne of

business (Local Government). Ethical and professional accounting forms a clear financial

image for a business (Local Government) and allows accounting financial managers to make

informed decisions helps Local Government have good and accurate accountabilities which

improves transparency in the Local Government.

The Institute of cost and management accountants U.K (CIMA), defines accounting as an

analysis , classification and recording of financial transactions ascertainment of how

transactions affect the performance of financial position of the business ( Local

Government) accountant Magazine 2001,

According to Omunuk.,1999, Accounting is a process of identifying, measuring and

communication of economic information to permit the informed and rational decisions to be

made. In general accounting system is a set of interrelated components that work together and

input financial transactions process and output financial reports.

2. 3 ACCOUNTING PROCEDURESBodnor,1993,defines accounting procedures as methods and ways established to identify ,

assembles, analyze and classify records and reports of organizations (Local Government)

transactions to maintain accountability for related assets and liabilities.

According to Boggs 1999, it is a collection of interrelated and independent elements that

work together , facilitate identify ,measure, compute and communicate information that

has been organized to achieve particular purpose like decision making.

Computerization and accounting system Wiki Answer.

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com@www.tymasystemcom(2010), stipulates the silent features of computerized accounting

systems. These include:

Computerized accounting is designed to automate and integrate all the departments in the

Local Government such as Education department, Health Department, Production

Department, Community Department, Finance and Administration department, Internal Audit

Department and Accounts Department. With computerized accounting system, accurate and

up to date records of Local Government are maintained information is literally at the fingure

tips of the accounting officicers.

Computerized accounting system has user definable attempts which provides fast

accurate data entry of transactions there after all documents and reports can be generated

automatically at the press of the button. Computerized accounting system gives Local

Government sufficient time to plan increases bargaining power from the central government

and promotes Local Government satisfaction. With Computerized accounting system , the

Local Government will have greater feasibility into the day to today’s operations and

access to vital information.

Computerized accounting system allows Local Government to enter data in various ways

which makes work pressure reduce. Computerized accounting system has the ability to handle

huge volumes of transactions with out compromising on speed and efficiency.

Computerized accounting system is highly integrated application that transforms the

business processes with its performance features which encompasses accounting inventory

reporting and statutory processes. This helps Local Government to access information faster

and take quicker decision responds quickly to needs from central Government. Computerized

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accounting system also guarantees real time of optimization of operations and promotes

communication to the Central Government.

Computerized accounting makes sure that the critical information is accurate controlled

send in time and safe from data manipulation along the way

2.4 BENEFITS OF COMPUTERIZED ACCOUNTING SYSTEMThe major aim of an accounting is to produce relevant information for decision makers and

stakeholders. This is due to the need and aim to produce reports at the right time to the right

people besides need for efficiency, speed and accuracy and free timely reporting which

becomes the important aim of the system (Meigs and Meigs,1986,)

The primary advantage of the computer is its incredible speed. Its noted that the time needed

for a computer to post a transaction is within a few millions of a second and also computer

system enhance increased levels of speed of financial information sharing among stakeholder

and that this system speeds up the processes of producing monthly and annual reports to the

centre pay rolls preparation which would have otherwise been time consuming and tedious.

Thus the Local Government with many employees finds it useful as pay roll system requires a

good deal of regular processing. Therefore it’s on this speed that several advantages accrue of

a computerization process over the manual accounting system.

http:h www.voluntallyarts.org March, 2010, States the benefits of having computerized

accounting system these include: Improved reporting to central government, Ministry of

Finance and Economic Planning. Many Local Government have more than one funding

source each with specific and different requirements for example the source of funds comes

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from the central Government , Donor agencies and local raised revenue where all the

accountability is needed,

Better keeping of records whilst human error can still corrupt your data for example

entering wrong data a good package will reduce this possibility and ensure that there is a

reference of all transactions for example for every cheque entered must correspond to the

claim. However this doesn’t eliminate all manual work, Vouchers, Invoices, receipts will still

need to be filed in logical manner and details of what was entered into the system should also

be recorded on paper. This will help when one want to track errors in the annual Audit.

Saving money even though there is immediate cost of the soft ware, you’re potentially saving

on the costs of UN necessary audits as well as employing many employees. There is quality of

work produced which even motivates the staff or the employees of the Local Government.

Information is easily transported to the central Government since all the information can be

taken on say flash or can be sent on e mail.

2.5 PROBLEMS ASSOCIATED WITH COMPUTERISATIONDespite the above advantages, researchers and professional bodies cite some weakness with

computerized accounting systems. Thus no matter how well designed and operated,

computerized accounting system can only provide reasonable assurance to management

regarding achievement of the entity’s objectives. The challenges are presented below:

Magara 1996, reported that, computers are costly in terms of hardware and personnel.

Procuring a new computer involves budgeting a lot of money which in most cases Local

Government don’t have that to say it involves committing huge sums of millions although this

depends on the type and model or make of the computer.

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Computers some times are attacked by viruses which may destroy the data that may be stored

on it and these viruses may also affect computer programmes, corrupting the files, corrupting

the memory of the computers.

Oliver and Chapman., 1996, assert that, the major consequence of higher level of

computerization is the increased use of computer based equipment to store large quantities of

the data about individuals. This is made possible by use of network which access data from

other sites. The problem however arises from the fact that some of the data is of particularly

private in nature and there is a natural concern that it should not be misused. There is also a

concern that individual may have personal information stored about them without their

knowledge or control and it may be hard or impossible to find out whether such information is

accurate.

Computerization has led to loss of jobs of most people since one computer can the work of

very many people with in a very short period of time hence leaving very many people jobless.

Computerization needs a lot of training of the staff about the use computers which may be

costly to the Local Government. Sometimes they are interrupted by power failure which is

common problem in most Local Governments.

The foregoing review of literature indicates how computerization impacts on accounting

system and decision of any Local Government. This implies that the motive behind

computerization accounting system differ from one Local Government. In line with research

objectives the case of computerization is subject to further investigations to ascertain to what

extent computerization affects accounting system in the Local Governments.

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CHAPTER THREE: METHODOLOGY

3.0 INTRODUCTION This chapter describes the methods that were used to collect data and its analysis. It basically

focuses on the research design, data collection procedures, study population the area of

study , targeted respondents, research instruments to be used , data analysis , data processing

and anticipated challenges.

3.1 RESEARCH DESIGN The study centres on various departments of Local Government. Therefore cross sectional

design and descriptive study design are regarded most appropriate to fulfill the objectives of

the study.

3.2 TYPE AND DATA SOURCE. The source of data used in the study is primary data and secondary data. Primary data were

collected from the staff of the Kisoro District Local Government by the researcher and

Secondary data was extracted from already existing records that was available/ journals and

text books.

The study uses a sample size of 5 Heads of departments, 10 senior accountants, 10 junior

accountants, 5 secretaries of various departments.

3.3. METHODS AND INSTRUMENTS OF DATA COLLECTIONPrimary data was collected by use of personnel interview and observation. Interviewer used

face to face with the Heads of Departments and other staff of the Local Government, use of

questionnaires which were filled by respondents.

3.4 DATA ANALYSIS AND PROCESSING: Raw data was obtained edited and then analyzed to produce meaning full information and

errors were eliminated, only correct and vital information was identified and used to draw

conclusion.

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The data was analyzed quantitatively using descriptive statistics. Qualitative data was

analyzed separately interpreted and compiled for preparation of reports on the finding of the

study.

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CHAPTER FOUR: PRESENTATION, INTERPRETATION ANS DISCUSION OF FINDINGS.

4.0 IntroductionThis chapter presents and discusses the results, the research findings were presented in

frequency distribution tables and percentages.

4.1 Demographics

4.1.1 Gender Table 1: Gender of Respondents.Gender Frequency Percentage (%)

Male 15 75

Female 5 25

Total 20 100

Source: Primary data

Table 1 shows that 75 percent were male while 25 percent of them were the majority was

however, males because most of the senior posts are held by the male as compared by females

because few females attain higher qualifications in the district as Girls removed from school

early.

4.2.2 Age of RespondentsTable 2: Findings on age distribution.Age Frequency Percentages (%)

20-30 2 10

31-40 6 30

41-50 8 40

51-above 4 20

Total 20 100

Source: primary data.

The findings from the table shows that 10 percent were between the ages of 20-30 years 30

percent were between the ages of 31-40 years. 40 percent had age of between 41-50 years

while 20 percent had the age of 51 and above years. The reason why majority was between

41-50 years was that the targeted population was of the senior posts where in most cases these

posts held by who have worked for very many years and are about to retire.

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4.2.3 Marital status.Table 3: Marital stats of RespondentsMarital status Frequencies

Percentages (%)

Single 2 10

Married 17 85

Widowed 1 5

Total 20 100

Source: Primary data.

The findings from the table shows that 10 percent were single, 85 percent were married and

only 5 percent was a window. All categories of the status were represented however; the

majority was married because most of these posts require one to have married.

4.2.4 Education levels.Respondents were asked to show their educational levels. The findings were as shown in the

table below.

Table 4Findings on educational level.Education Frequency Percentages (%)

Certificate 2 10

Diploma 4 20

Degree & above 14 70

Total 20 100

Source: Primary data

The findings from the table shows that 10 percent were certificate holders. 20 percent were

diploma holders while 70 percent were degree holders and above. All categories of people

who were given questionnaires were educated and expected to interpret the variables to give

reliable information for the research and because of higher levels of education the information

that was given correct information and can therefore be used to make recommendations.

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4.2.5 Working experience.Table 5: Findings on working experience.Working Frequency Percentages (%)

Less than 2 years 3 15

3-5 years 8 40

6-above years 9 45

Total 20 100

Source: primary data

Findings in the table indicate that 15 percent had experience of less than two years,40 percent

were between 3-5 years working experience and 45 percent had experience of 6 years and

above. This therefore implies that majority of the respondents were above 6

and above years of experience and were acquainted with the problems and benefits of

computerized accounting to give relevant information from the research study.

4.3 Effectiveness of computerization.Does your local government operate the computerized accounting?

Here respondents were asked to tell whether their local government operates a computerized

accounting system. The findings were as below.

Table 6: Findings on whether the local government operates a computerized accounting system.Responses Frequency Percentages (%)

Yes 20 100

No - -

Total 20 100

Source: Primary data.

Findings from the table show that all the 20 respondents who were given questionnaires all

agreed that their local government operates a computerized accounting system. This indicates

that all the respondents at least new about computerized accounting system to give reliable

information.

How has Kisoro district local government developed its accounting packages?

Here respondents were asked to indicate how the computerized accounting package that

Kisoro district operates. Findings more as in the table below.

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Table 7: Findings on package operated by Kisoro district local government.Responses Frequency Percentages (%)

Customized 4 20

Off the shelf 16 80

Others 0 -

Total 20 100

Source: Primary data.

From the table above, 20 percent said the district operates customized software; while 80

percent sad that Kisoro district operate off, the shelf software packages. Since the majority of

16 respondents were for the shelf, their views were relied on to make the conclusions.

Does the accounting package used by Kisoro district local government provides solutions to

its accounting problems?

Here respondent were asked to state whether the accounting system used provide solution to

its accounting problems. The findings were as follows.

Table 8: Responses on whether computerized systems have solved accounting problems.Strongly agree Frequency Percentages (%)

Agree 4 20

Not sure 3 15

Disagree 11 55

Strongly disagree 2 10

total 20 100

Source: Primary data.

From the above shows table shows that 20 percent agreed, 15 percent were not sure, 55

percent disagreed while 10 percent strongly disagree. Basing on the majority and the variables

not solved as a result of having computerized accounting system.

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4.4.1 Level of computerization in Kisoro district local government.How do you describe the level of computerization in Kisoro district local government?

Here respondents were requested to show the level of computerization of accounting system.

Findings were as in the table below.

Table 9: Findings on the level of computerization.Responses Frequency Percentages (%)

High 4 20

Medium 3 15

Low 13 65

Total 20 100

Source: primary data.

Findings from the table shows that 20 percent said the level of computerization is high, 15

percent said that its medium, while 65 percent said that the level of computerization is low.

Basing on the majority, it indicates that there are problems with the computerized accounting

system in Kisoro district local government.

4.4.2 In your opinion, is the current level of computerization approximate?Primary data.

Here respondents were asked to state whether the level or computerization is a appropriate,

the findings were as below.

Table 10: Findings on the appropriateness of the accounting system.Responses Frequency Percentages (%)

Yes 6 30

No 14 70

Total 20 100

Sources: Primary data.

Findings from the table show that 6 respondents by 30 percent agreed that the level of

computerization is appropriate while 14 respondents represented by 70 percent disagreed that

the level of computerization is not appropriate. Basing on the majority, it can be seen that

there are problems still with computerized accounting system.

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4.4.3 Respondents who said that the level of computerized accounting is low were asked to sate what should be done to improve the situation.The responses were.

Training in offices, introducing a customized software to increase efficiency, sponsoring

workers for refreshers course on computerized accounting system, basing on the responses it

implies that not only problems of computerized system of accounting contributed by the

computerized system alone but also be caused by inadequate skills to use computers.

4.4.4 Is management concerned about the problems of computerized accounting system in your district?Here, respondents were asked to sate the whether management is concerned with the

problems of accounting findings were as shown below.

Table 11: Findings on the concern of management on problems of computerized accounting system.Responses Frequency Percentages (%)

Yes 13 65

No 7 35

Total 20 100

Source: Primary data.

The findings with table show that, 65 percent agreed that management is concerned with

accounting problems while 35 percent disagreed. According to the majority, Kisoro district

management is trying to find solution to the problems of computerized accounting system.

4.4.5 Those who said yes question 14 were asked to show the indicators.The indicators that were given are.

Improvement on timely reporting

Some training of employees on accounting system. This implies that there are problems of computerized accounting system that are tried to be solved by management

4.4.6 Are there constraints that limit the level of computerization in your district?Here respondents were asked to show the constraints that limit the level of computerization

accounting system.

Inadequate computers

Inadequate training facilities

19

Inadequate trained staff

Old fashioned computers will low processing power.

4.5 Relationship between computerization and effectiveness of accounting system.Do you think there is a relationship between computerization and effectiveness of accounting

system?

Here respondents were asked to sate whether computerization and effectiveness of accounting

system are related. The findings were as in the table below.

Table 12: Findings on the relationship between computerization and effectiveness of accounting system.Responses Frequency Percentages (%)

Yes 15 75

No 5 25

Total 20 100

Sources: Primary data

Findings from the table above show that 75 percent said there is a relationship between

computerization and effectiveness of accounting system. Basing on the majority, it implies the

computerization is positively related with effectiveness of accounting system once

appropriately used.

Those whose coded yes in question 16 were asked to describe the relationship between

computerization and effectiveness of accounting system the responses were and below.

Table 13: findings on the description of the relationshipResponses Frequency Percentages (%)

Improving 17 85

Steady 2 10

Worsening 1 5

total 20 100

Source: Primary data.

From the table above, shows that 85 percent said the relationship is improving, 10 percent

said that it is steady and only 5 percent said that it’s worsening. This implies that the same

measures have been put in place to improve on the accounting system in the computerized

system.

The main objective of accounting system is accuracy, speed, timeless, proper storage,

security. Do you think in your opinion computerized accounting system has helped the district

to achieve those objectives?

20

Here, respondents were asked to show their responses on whether computerized accounting

system has helped the district to achieve those objectives. The responses were given as below.

Table 14: Findings on whether computerized accounting system has helped the district to solve its problem.Responses Frequency Percentages (%)

Yes 12 60

No 8 40

Total 20 100

Source: Primary data.

From the table above, shows that 60 percent agree that computerized accounting has helped

the district to achieve is objectives while 40 percent disagrees. This implies that much as there

are problem with computerized accounting system, it has helped the district perform to some

level.

Respondents who coded in question 19 were asked to state the causes. The findings were as

below.

18 respondents said that there is inadequate support from the government on computer

system.

3 respondents said that the cause is poor accounting packages to support the huge

transaction made.

In general, please comment on the role of computerization in improving the

effectiveness of accounting system.

Here, respondents were asked to show their opinion on the role of computerization on

effectiveness of accounting system. The responses were that; when computerized

accounting is fully employed there is;

Accuracy is reports there is.

There is speed of delivery of report

There is efficiency in performance of the district.

Competitiveness.

There is high out or workers.

Timely reports are produced.

21

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS.

5.0 SummaryThe accounting system produces relevant information for decision makers and stake holders

because it produces reports at the right to the right people besides need for efficiency, speed,

and accuracy for free timely reporting which becomes the important aim of the system. In

Kisoro district local government, the accounting system has enhanced a strong internal control

system in financial matter and uses various documents; books of accounts and authorization to

cross check various transaction their recording and examining among other reasons. With

major nations technology and the use of computers in particular, there is improved

performance in terms of savings, detection of fraud and necessary errors among others.

However, this study established that most literatures focuses on the total transformation from

manual to computerized system given the risks and the disadvantages associated with

computerized systems, there is need to use the two systems concurrently.

5.1 RecommendationsComputer technology will leave no stone unturned. The issue is to how to utilize technology

effectively so that local government operations and objectives are achieved effectively hence

improving its performance. It is therefore important that the following be considered so that

the computerized accounting system improves performance in Kisoro district local

government.

Training of staff the Local Government should offer shot term courses on computerized

accounting and at the same time workshops to its staff because this will reduce the cost

associated with hiring experts who are usually expensive and these training should be before a

new package is introduced.

Mandatory regulations to all Local Government. All Local Government should adopt

computerized accounting for uniformity and accuracy if they are to carry out the operations

effectively so as to improve on their performance.

Building relationship in order to do this Top Managers should avail good working relationship

to the employees and provide appropriate equipment and better pay to employees for better

performance.

22

5.2 Suggested areas for research.Further studies in the areas computerized accounting system should be carried out since this

study has not been sufficiently comprehensive in all the areas of study about the subject due

to exploit idle data to the maximum in regard the following subjects.

(i) The role of computerization of performance of local governments.

(ii) Effects of computerized accounting system on employee planning in the local

government.

5.3 ConclusionToday better performance in most local government is as a result of c computerization.

Computerization has a great impact on computerization that is to say it increases performance

and this explains why most local governments have computerized their functions.

The researcher found that computerized accounting system is speedy, accurate and timely. It

also detects errors and increase productivity hence improving performance. There are other

challenges associated with the system that need to be noted such as mistakes and errors,

training of personnel’s virus attacks power failures.

However, despite the above problems Kisoro district local government needed a computerized

accounting system and basing on the findings there is no doubt that the system had greatly

improved the local government’s operations.

The computerization process in the local government if properly handled lowers costs to the

local government and enhances or promotes the benefits of the accounting system.

23

REFERENCES.Accountant Magazine (2001) Computerized accounting.

Byaruhanga Robert (2001), Impact of computerization on the accounting 2nd Edition E.C

Oliver $ R.J Chapman (1996). Data Processing and Information Technology (8th Edition).

English Long Book Society. DP Publications.

Elisam K Magara (1996), data Processing and information system. Institute of statistics and

applied economics.

Freed. F. Bakabulindi (1999), Computerization and record keeping in an academic Institution.

Dissertation submitted to Makerere university.

French C.S (1996), Data Processing and Information Technology (10th Edition) Galgotta DP

Publications.

James Obrien (1997), Management Information system, (4th Edition) Galgotta Publications

PVT Limited, Mc Grow-Hill

Meiggs W.B & Meigs R.F (1990. Accounting, The Basis Business Decisions JB (199),

Fundamental Accounting Principles 1st Edition.

Saleemi, N.A Business Communication and Report Writing Simplified system. Dissertation

submitted to Makerere University Business School.

Waburoko E.S (2001), An introduction to Information technology. Department of Distance

education Makerere University.

Waburoko E.S, (2004) Applied Desktop Computing. Desktop Publishing.

24

MAKERERE UNIVERSITY

P.O BAX 7062

KAMPALA

Dear respondents,

I am Tumwizere Gahutu Christopher from Makerere University carrying out a study research

to establish the impact of computerization on accounting system in Kisoro District Local

Government. This information is purely for academic purposes and you are kindly requested

to respond with correct information which will be kept confidential.

Ticks only the correct answers, in case of an open question give your opinion.

Thank you for your time and cooperation. I sincerely appreciate your effort and your help.

Please kindly read instructions and answer the questions that follow;

i. Fill in the blank spaces provided.

ii. Where questions are of measurement attitude type, the following options shall be

provided each have classified weight as below;

a. Strongly agree.

b. Agree

c. Neither agree or disagree

d. Disagree,

e. Strongly disagree.

iii. Please tick where applicable.

25

SECTION 1

Department………………………………………………………………………………………

………………………………………………

Position/responsibility held…………………………………………………………….......

………………………

1) Gender

Male Female

2) Age

Under 20 years 20-30 years 40-50 years

Above 50 years

3) Marital status

Single Married Widowed Others specify

4) Education level

Certificate Diploma Degree others

5) How long have you been working for this Local Government

Less than 2 years 3-5 years Above 5 years

SECTION 2

26

1 2

1 2

4

3

21 3

41 3

1 2 3

2

Effectiveness of computerization.

6) Does your Local Government operate a computerized system of accounting?

Yes No

7) How does Kisoro District Local Government develop its accounting packages?

Customized Off the shelf others specify

8) If 1 is coded in question 7, does the District involve its workers in developing these

computerized accounting packages?

Yes No

9) Does the accounting packages used by Kisoro District Local Government provide solution

to its accounting problems?

Strongly agree Agree Not sure Disagree Strongly

disagree.

1 2 3 4 5

SECTION 3

Level of computerization in Kisoro Local Government

10) How do you describe the level of computerization in Kisoro District Local Government?

High Medium Low

11) In your opinion, is the current level of computerization in our District appropriate?

Yes No

12) If 3 was coded in question 10, what do you think should be done to improve the situation?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………..

13) Is management concerned about computerization in you District?

Yes No

14) If 1 was coded in question 13, what are some of the indicators that explain your answer.

…………………………………………………………………………………………………

……

15What are the constraints that limit the level of computerization in your District?

Yes No

16) If 1 was coded in question 15, please specify some of them.

27

21

21 3

2

21 3

21

21

21

21

1

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

SECTION 4

Relationship between computerization and effectiveness of accounting system.

17) Do you think there is a relationship between computerization and effectiveness of

accounting system?

Yes No

18) If 1 was coded in question 17, how would you describe the relationship between

computerization and effectiveness of accounting system?

Improving Steady Worsening

19) If 3 was coded in question 18, what do you think has made it worsen?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

20) The main objectives of account ting system are; accuracy, speed, timeless, proper storage,

security. Do you think in your opinion computerized accounting system has helped the

District achieve those objectives?

Yes No.

21). If 2 was coded in question 20, what do you think are the causes?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

……………..

22) In general, please comment on the role of computerization in improving the effectiveness

of accounting system.

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………………………………………………………………………………...........

Thank you for your cooperation

28

2

1 3

1

1

2

2

29