Financial scandals in some local government authorities in Tanzania and the effectiveness of internal audit in mitigating such scandals have become an area of interest for both policy makers and the professions. This study assessed the setbacks for the Effectiveness and Efficiency of Internal Audits in Local Government Authorities in Tanzania; the case of Morogoro Region. Data was collected from 200 respondents in six District Councils from the departments of administration, procurement, planning, finance and auditing. The study employed a sampling method in gathering data. Data was descriptively analysed by SSSP and multiple data were analysed by Regression analysis in determining the association between the effectiveness and efficiency of the internal audits in local government authorities and four main factors. Results reveal that internal audit effectiveness and efficiency is hindered by; lack of independence of internal audit, lack of competence of internal auditors, little management support to internal auditors, and lack of relationship between internal auditors and external auditors. The study further indicates size and mixture of professions of internal auditors is the determinant that hinder the effectiveness and efficiency of internal audits in local government authorities in Tanzania. The study contributes to existing body of knowledge in internal audit literatures by providing useful information to both professionals and academicians who are eager in identifying setbacks for the internal audit effectiveness and efficiency in local government authorities in Tanzania