Dissertation (MA Public Administration)The study has intended to investigate the implication of inter-governmental relation, on the effectiveness of employees in Local Government Authorities (LGAs) in Dodoma Municipal Council, Tanzania. The study objectively, aimed at determining the types of relation existing in the local government authorities and examine the functioning of the decentralization by Devolution (D by D) policy a well evaluate the fiscal factors, affecting the functional competency and administrative control of employees in Dodoma Municipal Council. The study guided by System and Power Theories. A sample of 81 respondents were selected which include 72 employees from departments of DCC and PORALG, 5 Head of Departments (HoD) from DCC and 4 Head of Division (HoDv) from PORALG. Data were collected through questionnaires (open and closed ended), interview (semi-structured) and documentary review, then analyzed both qualitatively and quantitatively with the support of Statistical Package for the Social Sciences (SPSS) version 21.0. The study has found out that, adoption of financial management system in Dodoma Municipal Council was directly linked from central government. The study also, revealed applicability of laws and by-laws in the study area was by (88.89%) in governing the roles of employees in Dodoma Municipal Council. Moreover, among the higher claimed challenges faced the financial management system in the LGAs within Dodoma Municipal Council were inadequate commitments and accountability by (55.6%) of the respondents, in the accomplishment of the daily responsibilities, such as working out for claims, conflict resolutions, and revenue collection. Corruption was also an alarming agenda in the study area as revealed by (18.1%) of the main respondents and (36%) of the key informants.