Examining the Effect of Financial Management Practices on Financial Sustainability of Selected Local Government Authorities in Tanzania: The Moderating Effect of Good Governance

Abstract

The study examined how financial management practices affects the financial sustainability of Local Government Authorities (LGAs) in Tanzania, considering good governance as a moderating factor. Using an explanatory design and data from 330 respondents selected via simple random sampling, the research employed structural equation modeling to analyze the data collected through a structured questionnaire. The results revealed that financial planning; financial monitoring and financial control have positive and significant relationships with financial sustainability. Also, good governance fully moderating relationship between financial monitoring and financial sustainability. The study found out that effective financial planning, financial monitoring and robust financial control mechanisms are essential for sustaining financial health. The findings underscore the necessity for LGAs to adopt rigorous financial management practices and strengthen governance frameworks to enhance financial sustainability.