A Dissertation Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration in Corporate Management (MBA-CM) of Mzumbe University. 2014The overall objective of the study was to examine the Public Sector Internal Audit Performance in the public sector organizations in Tanzania. The study was guided by five objectives; determine the qualification of Internal audit staff, examine the independence of internal audit unit in performing their duties, find out whether enough fund are allocated to enable it conducting its duties accordingly, establish whether the number of staff in the unit is proportional to the workload and find out what make the internal audit unit fail to detect existing weakness. Data was collected using questionnaires distributed to internal audit personnel, head of departments and head of sections, and during data collection sampling method was applied. Both qualitative and quantitative methodologies were used to analyse data as a sample of 100 respondents was used. The study found that there is a positive impact of internal audit function on the organization performance. The study results indicate that internal audit function ensures efficient and effective use of public resources ensures reliability and integrity of information for economics, management system of internal control among others. However the study also pointed out that lack of independence for the internal audit unit, insufficient fund allocated to internal audit unit to be factors of difficulties of the unit to discharge its responsibilities accordingly. Poor top management support and negative attitude towards the internal audit also were pointed out to be challenging factors to the internal audit unit performance in the public sector organization. The study recommends that internal audit skills and competence be raised through training, for the successful operation of internal audit effectiveness Audit effectiveness could be enhanced by ensuring consistency in documenting audit work to enable improved review of audit work; proper follow-up of the status of audit findings and recommendations; increased distribution of audit reports; and further improvement in the quality of reporting. The study also recommends that funds for the internal audit should not entirely depend on the organization to be audited, instead, there should come from external source of funds that will be given directly to the internal audit to enhance audit independence.