Internal Control Components and Fraud Prevention in Public Institutions in Rwanda A Case of Rwanda Revenue Authority (RRA)
Authors: Hakizimana Jean Paul , Rusibana Claude 
Published: February 2022

Public institutions in Rwanda face problems while preventing fraudulent activities due inefficient internal control systems in terms of control environment such as reliability and moral standards, the ability of staff, administration’s viewpoint, working styles and allocation of resources and tasks; control activities and monitoring activities. Due to persistence of fraudulent activities and inefficient internal control of RRA has only managed to recover only 13% of over 3.4 billion defrauded by companies due to poor setting of EBM. Hence, this study aims at investigating the contribution of internal control on fraud prevention in public institutions in Rwanda with specific consideration of RRA. The research design of this study was descriptive research design whereby the target population of this study comprised all 1412 employees of RRA. Researcher used sample size of 93 respondents who were determined using Yamane method and stratified sampling techniques. Structured questionnaires were used to collect the data from the field. Data analysis was done using both descriptive statistics and inferential statistics; derived with the help of SPSS 21.0 versions. The results of the study have revealed that overall mean of 1.966 implied that control environment helps in prevention of fraud in RRA to a very great extent. The overall mean of 4.445 tending to strongly disagree which imply that the employees of RRA strongly disagreed that they met control environment related challenges while preventing fraud in RRA. The overall mean of 1.310 implied that control environment practices enhance fraud prevention in RRA. The overall mean of 1.347 implied that control activities play a significant role in prevention of fraud in RRA. The overall mean of 4.404 implied that employees of RRA strongly disagreed that management issues need serious control activities in fraud prevention. The overall mean of 2.104 implies that monitoring activities affect fraud prevention to a great extent in RRA. The results of the study have revealed that there is a relationship between internal control and fraud prevention because the calculated significance level between the indicators has significance level which is lesser than 0.01 and positive Pearson correlation. For instance there is a positive correlation between control environment and Fraud awareness (p=.792 and sig=.000), between monitoring activities and fraud risk assessment (p=.878 and sig=.000), between fraud risk assessment and control environment (p=.867 and sig=.000), and between control activities and Fraud awareness (p=.735 and sig=.000). Basing on the findings of the study, the researcher would like to recommend the government to ensure that RRA has all the necessary tools to detect and prevent fraud before happening because it ruins the economy of the country. Rwanda revenue authority should create positive workplace environment by allowing employees to provide input in the development and updating of the code of conduct to foster loyalty and feelings of ownership. The taxpayers should be taught how to comply with rules and regulations concerning tax, demanding EBM invoices on purchases and issuing EMB invoices on sales in order to avoid fraudulent activities. In conclusion, the internal control system components have a positive and significant impact on fraud prevention in RRA.