A Dissertation submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Science in Accounting (Msc-A&F) and Finance of Mzumbe University Dar es Salaam Campus College.The research centred on the use of auditing to improving public sector management using KIBAHA TOWN COUNCIL (KTC) in the Coast Region, as a case study. The main issue that guided this study was whether the internal audit department is discharging its responsibilities effectively. The objective of this study was to assess the effectiveness of internal audit as an instrument for improving the management in the public sector in Tanzania. In realizing its objective, the study has employed a case study design which has provided the opportunity to such techniques as questionnaires, interviews, observations and documentary review in the data collection process. The target population of this study targeted the KTC employees who formed 69 respondents. The data obtained in this research provided descriptive statistics and narrations. The study also used a multivariate regression analysis to determine the relationship between the independent variables and the dependent variable. The study found that management support had the greatest effect to the internal audit department as an instrument towards improving management practices at Kibaha Town Council. This factor is followed by risk monitoring and on the other hand the internal controls were found to have the least effect. The study recommends that in order for the council to be effective in its operation and service delivery it needs to pay attention to the contribution of internal auditing on its operations. This should go hand in hand with instituting risk mitigation in council’s internal auditing operation. Staffing of the internal audit should be considered critical for the effectiveness of the council internal audit department.