Current business trends have made it imperative for almost all organization to maintain anrninternal control system. Internal control system is one of the important functions of everyrnbusiness enterprise to detect accuracy & reliability of financial reporting, misuse of assets,rnensuring efficiency of operations and adherence to rules and regulation. Micro financerninstitutions have a critical role on the growth and development of a country by providingrndifferent financial services to the poor and low income people in both rural and urban area. Thernprevious studies on micro finance institution showed that the main problem of micro financerninstitution were weakness of their internal control system. This study focused on assessment ofrnthe internal control system in the micro finance institution to identify the possible areas ofrndeficiencies in the system. The population for the study was made of the nineteen (19) micrornfinance institutions in Addis Ababa of which three (3) of them was selected as a sample using arnpurposive sampling techniques based on the year of establishment and the number of branchrnthey have in Addis Ababa. The study used survey method of data collection throughrnquestionnaires to employees of the institution and semi-structured interview with the institutionrnmanagement. The data gathered from the respondent was analyzed and interpreted by the help ofrnSPSS software program with the help of bar frequency table, minimum & maximum value, meanrnand standard deviation. The result indicated that internal control in the institution isrnsatisfactory. Though risk assessment elements with the average mean value of 3.81 is better inrnthe institution, there is adequate control environment, control activity, information &rncommunication and monitoring activity components in the institution.rnHence, it needs commitment from both the institution management and responsible authority tornimprove those specific areas of deficiencies in the internal control elements indicated in the finalrnchapter of the studyrnKey word: internal control system, micro finance.