This study was based on internal audit and financial performance in local Government: a case study of Nagongera Town Council. It focused on critically establishing the relationship between internal audit and financial performance in local Government, with the following objectives. (i)To establish the relationship internal audit and revenue performance.(ii)To assess the relationship between internal audit and tax performance.(iii)To examine the relationship between internal audit and quality of financial statements. The researcher used both a descriptive cross sectional survey design which included both qualitative and quantitative method of data collection, the quantitative method was used to collect numerical data in form of numbers representing particular facts or measurements which helped the researcher to obtain information from respondents in depth. Findings revealed that majority of respondents agreed that there is a relationship between internal audit function and revenue performance, tax performance and quality of financial statements. From the findings of the study and conclusions drawn, the res~archer came up with recommendations like adherence to internal control systems, more professional training e.g. CPA, ACCA, for the staff who are in audit and finance department to enhance their knowledge of the subject to better manage the audit and finance department which are key in the preparation and production of financial and audit reports in Nagongera Town Council.
