📈 economics

Assessing Public Sector Audit Effectiveness in Somalia: Examining the Role of Political Support, Regulatory Support, and Institutional Capacity.

Utilizing PLS-SEM analysis of data from Mogadishu, this study finds that institutional capacity, regulatory support, and political commitment are all significant positive drivers of public sector audit effectiveness in Somalia's fragile post-conflict environment, with institutional capacity emerging as the most critical factor.

Original authors: Abdirahman Hassan Ahmed, Dahir Abdullahi Mohamed, Omar Ahmed Ibrahim

Published 2026-10-07

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CC BY 4.0

Original authors: Abdirahman Hassan Ahmed, Dahir Abdullahi Mohamed, Omar Ahmed Ibrahim

Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). ✨ This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer

In the fragile architecture of a nation, few tools are as vital as the public audit. Imagine a government as a large household where citizens provide the money and officials manage the spending. For this arrangement to work, someone must check the books to ensure the money is used wisely and not stolen. This is the job of public sector auditors. They act as the independent eyes that watch over government finances, looking for mistakes, waste, or corruption. In stable countries, these auditors usually have strong laws backing them and plenty of resources to do their work. However, in nations emerging from long periods of conflict, where institutions are weak and trust is scarce, the ability to audit effectively becomes a critical test of whether a government can truly function. The question researchers ask is not just whether these auditors exist, but what actually allows them to succeed. Is it the laws on the books, the will of the political leaders, or the skills and tools the auditors themselves possess?

A team of researchers from SIMAD University in Somalia set out to answer this question by looking directly at the situation in Mogadishu. They focused on three main factors that they believed determined how well public audits worked: political support, regulatory support, and institutional capacity. Political support refers to whether the leaders of the country, including the president and parliament, genuinely back the auditors and enforce their findings. Regulatory support involves the strength of the laws and rules that give auditors the power to do their jobs without fear. Institutional capacity covers the practical side: the training, technology, and money the audit offices have to actually perform the work. To understand how these pieces fit together, the researchers surveyed 118 key people involved in Somalia's financial system. This group included government officials, members of parliament, and both internal and external auditors who know the system from the inside.

The researchers asked these experts to rate how strong each of these three factors was and how effective the audits had been. They then used a sophisticated statistical method to see which factor mattered most. The results were clear and decisive. All three factors were found to be essential; when any one of them was present, the effectiveness of the audits improved. However, the study revealed a hierarchy of importance. While having the right laws and the backing of political leaders is necessary, the single most powerful driver of success was institutional capacity. In other words, even if the laws are perfect and the politicians are supportive, the audits will fail if the auditors lack the skilled staff, the modern computers, and the training needed to find the problems. The data showed that the technical ability and resources of the audit teams had a stronger impact on success than the political or legal environment alone.

The study also confirmed that political support and regulatory support are not just helpful but statistically significant. When leaders actively protect the independence of auditors and when laws clearly define the auditors' powers, the system works better. Yet, the researchers found that these external supports cannot do the heavy lifting on their own. The audit teams themselves must be capable. The analysis showed that the combination of these three elements explained a large portion of why some audits succeed and others do not. Specifically, the model demonstrated that the skills and resources of the audit institutions were the primary engine driving effectiveness. This suggests that in a post-conflict setting like Somalia, rebuilding the technical muscle of the audit office is just as important as writing new laws or securing political promises.

For the people working to rebuild Somalia's governance, these findings offer a clear roadmap. It is not enough to simply pass a law that says audits must happen, nor is it enough for leaders to say they support the process. The study indicates that the most urgent task is to build the internal strength of the audit institutions. This means investing in professional training, ensuring auditors have the right software to analyze financial data, and providing the budget needed to hire qualified staff. Without this foundation, the legal frameworks and political will remain underutilized. The research concludes that for public sector auditing to truly work in Somalia, the country must focus on creating a tripartite foundation where strong technical capacity is supported by clear laws and genuine political commitment. Only when the auditors have the tools to do their job can the government ensure that public money is safe and that trust in the state can be restored.

Technical Summary: Assessing Public Sector Audit Effectiveness in Somalia

Problem Statement and Context
This study addresses the critical challenge of establishing effective public sector audit mechanisms within Somalia's fragile, post-conflict governance environment. While public sector auditing is recognized as a fundamental pillar of democratic accountability and public financial management (PFM), its implementation in post-conflict states faces systemic hurdles, including weak legal enforcement, severe resource constraints, and political volatility. Existing literature predominantly focuses on stable economies or relies on qualitative descriptions, leaving a significant empirical gap regarding the structural interrelationships between political commitment, regulatory frameworks, and institutional capacity in fragile states. The paper posits that translating legal mandates into tangible audit impact in Somalia is currently hindered by a lack of quantitative evidence on how these specific drivers interact to shape oversight outcomes.

Methodology
The research employs a quantitative, empirical design utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM). This method was selected for its ability to handle complex structural models with latent constructs and its robustness in environments where strict multivariate normality assumptions may not hold.

Data Collection: A cross-sectional survey was conducted between May and July 2026 in Mogadishu. The target population included key stakeholders in Somalia's public financial management ecosystem: internal and external auditors, financial controllers, parliamentarians, and senior administrators.
Sampling: Using a purposive and snowball sampling strategy, 150 questionnaires were distributed. After screening for missing values and outliers, 118 valid responses were retained, representing a highly experienced sample (76% male, 60% with Bachelor's degrees, and significant representation from policymakers and audit committees).
Measurement Model: The study utilized a 5-point Likert scale to measure four latent constructs: Political Support (PS), Regulatory Support (RS), Institutional Capacity (IC), and Public Sector Audit Effectiveness (PSAE). The model was rigorously validated for indicator reliability, internal consistency, convergent validity, and discriminant validity using Smart PLS 4.

Key Contributions
The paper makes three primary contributions to the public financial management and institutional theory literature:

Contextual Expansion: It extends audit effectiveness research beyond stable Western and emerging economies to a fragile, post-conflict state, providing empirical evidence from a context characterized by political instability and institutional weakness.
Structural Modeling: Unlike prior studies that often treat audit antecedents in isolation or use bivariate methodologies, this study simultaneously evaluates the direct contributions and structural interrelationships of political, regulatory, and institutional drivers using PLS-SEM.
Theoretical Integration: It integrates Institutional Theory, the Resource-Based View (RBV), and Agency Theory to explain how external governance support and internal technical capacities jointly shape audit outcomes in a fragile environment.

Results
The structural model assessment yielded robust statistical support for all proposed hypotheses, with the model explaining 68.4% of the variance in Public Sector Audit Effectiveness ( $R^2 = 0.684$ ).

Hypothesis 3 (Institutional Capacity): This emerged as the strongest predictor ( $\beta = 0.358, p < 0.001$ ) with a medium-to-large effect size ( $f^2 = 0.264$ ). The findings indicate that technical competencies, operational resources, and infrastructure are the paramount drivers for translating audit mandates into tangible outcomes.
Hypothesis 2 (Regulatory Support): This was the second most influential determinant ( $\beta = 0.312, p < 0.001$ ), confirming that clear, enforceable legislative mandates and statutory backing are essential for audit authority.
Hypothesis 1 (Political Support): This demonstrated a significant positive effect ( $\beta = 0.284, p < 0.001$ ), suggesting that executive commitment and political will are necessary to enforce audit recommendations and safeguard independence.
Model Validity: The measurement model exhibited strong reliability (Cronbach's $\alpha > 0.84$ , Composite Reliability $> 0.85$ ) and validity (AVE $> 0.68$ , HTMT $< 0.85$ ). Collinearity was not an issue (VIF $< 2.15$ ), and the model demonstrated high predictive relevance ( $Q^2_{predict} = 0.508$ ).

Significance and Claims
The paper claims that public sector audit effectiveness in Somalia depends on a balanced, tripartite foundation combining technical capacity, statutory backing, and political commitment. The study asserts that while political and regulatory frameworks provide the necessary "teeth" and legitimacy, they remain underutilized without the operational infrastructure and skilled human resources provided by Institutional Capacity.

The authors position the study as a contribution to institutional theory, demonstrating how structural drivers interact specifically within a fragile state context. The findings suggest that policy interventions must move beyond drafting legal provisions to actively expanding professional certification programs, strengthening legislative enforcement of audit findings, and safeguarding audit independence. The paper concludes that achieving meaningful oversight in Somalia requires a shift from symbolic mandates to substantive operational capacity, supported by unwavering political and regulatory backing.

Technical Summary: Assessing Public Sector Audit Effectiveness in Somalia

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