APPRAISAL OF BUDGETING AS A TOOL FOR EFFECTIVE CONTROL IN PUBLIC SECTOR
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APPRAISAL OF BUDGETING AS A TOOL FOR EFFECTIVE CONTROL IN PUBLIC SECTOR
Chapter one
INTRODUCTION
1.1 Background of the Study
Increasing competition is constantly forcing organisations to adopt more efficient methods and smaller margins. Highly capitalised industries must ensure that their resources are employed most efficiently.
At the same time, firms must adapt to quickly changing client demands and supply chain dynamics. The key to attaining operational excellence is effective and adaptable resource management, which includes optimising and scheduling people, processes, vehicles, equipment, and materials to maximise utilisation while meeting corporate objectives.
Rowden (1995) defines resource management as the practice of utilising a company’s resources in the most effective manner feasible. These resources can include actual products and equipment, as well as financial and labour resources like personnel.
Resource management can involve notions such as ensuring that there are enough physical resources for one’s business but not an oversupply so that items are not used, or ensuring that people are given to jobs that will keep them busy and prevent them from having too much free time.
Human resources have a significant role in determining an organization’s wealth. Human effort is an invaluable resource for every organization’s production, efficiency, and effectiveness.
This capacity building, establishing and sustaining well-trained, competent, experienced, and quality human resources to carry out the organization’s diverse tasks, becomes an important concern.
One of the most significant barriers to organisational development is a lack of appropriate and effectively managed human resources. It was not surprising, then, that the third national development plan of the Osuji 1975-1981, as aptly documented by Zahradeen (1980), echoed that successful implementation of a development plan,
whether at the organisational or national level, depends not only on the availability of financial and other capital input, but more importantly on the adequacy of well-trained and managed human resources in various occupations.
According to Ugbana (1986), the majority of public and commercial organisations are beginning to recognise the importance of material management. Most organisational balance sheets show that materials account for the majority of total expenditure, accounting for approximately 70% of organisational resources
while cash accounts for 20%, and other forms of organisational expenses account for 10%. Surprisingly, most organisations prioritise currency over materials in terms of security, despite the fact that cash accounts for the majority of organisational resources.
This should not be the case; materials that account for the majority of organisational resources should be adequately secured and maintained by qualified and efficient personnel (Ammer 1996).
At the end of the twentieth century, many organisations recognised the importance of materials, and most material activities were carried out by autonomous departments such as purchasing, storage, stock control, and distribution, which created challenges.
In Nigeria, there have been a succession of changes in managerial competencies and activities related to financial management in recent years, with the most notable developments being complicated.
Eminent Nigerians of various calibres have addressed the failure trend in financial management of Nigerian enterprises from various perspectives.
For example, the banking industry has faced a variety of issues, including fraud and mismanagement of funds, which leads to poor overall performance. There were other issues that contributed to financial management deficiencies.
Some analysts have described these problems in a variety of ways as barriers to proper financial management and success in Nigerian privately owned businesses.
As development progresses and the structure and organisation of the economy become more complicated, failures in financial management ensure growing complexity.
As more elements are uncovered, the researcher will be able to investigate how and why these causes have emerged. What are the requirements for effective financial management?
Against this backdrop, the researcher studies the impact of resource management on organisational development.
Brief History of Power Holding Company of Nigeria (PHCN) Plc.
Electric power development in Nigeria began in the late nineteenth century, when the first generation plant was installed in the city of Lagos in 1898.
From that point forward, until 1950, the pattern of electricity development was established in various towns, some of which were under the jurisdiction of the Federal Government, others by the Native Authority, and one or two large municipal authorities.
Electricity Corporation of Nigeria 1950: In order to unify and make power development more effective, the government approved Ordinance No. 15 of 1950. This regulation consolidated all electrical projects under public departments with those under Native Authority or municipal ownership and administration.
The energy Corporation of Nigeria, or ECN, became the statutory organisation in charge of generating, transmitting, distributing, and selling energy to all Nigerian consumers and customers.
Niger Dams Authority
In 1962, Parliament passed an Act establishing the Niger Dams Authority. The Authority was in charge of the construction and maintenance of dams and other works on the River Niger and elsewhere to generate electricity through water power, improve navigation, and promote fisheries and irrigation. Construction of the Kainji Dam began in March 1964 and was completed on time in December 1968.
Nigerian Electric Power Authority
In September 1969, the Federal Military Government decided to combine the Electricity Corporation of Nigeria and the Niger Dams Authority into a single entity.
A year later, a Canadian consulting firm called “Shawment Lurruted” was hired to look at the technological aspects of the merger. The report was filed in November 1971 by Decree No. 24 of June 27, 1972 (which became effective on April 1, 12972).
The Electricity Corporation of Nigeria (ECN) and Niger Dam Authority (NDA) united to form the National Electric Power Authority (NEPA).
The real merger did not take place until January 6, 1973, when a general manager was chosen. According to the decree, the authority is responsible for developing and maintaining an efficient, coordinated, and cost-effective electrical supply system for the entire federation.
Prior to the privatisation programmes implemented by the rule of former President Chief Olusegun Obasanjo, the corporation was privatised, and its name was changed to Power Holding corporation of Nigeria Plc.
1.2 Statement of the Problem
Most organisations have faced challenges that have jeopardised their ability to develop and achieve their goals. This is due to fundamental challenges with insufficient and inefficient acquisition, utilisation, and maintenance of its human resources.
The underutilization of human resources in the PHCN has gravely jeopardised the organisation since the human aspect is improperly managed.
Mismanagement is another severe issue confronting our organisation today, and it has reduced it to nothing since people are no longer connected to their work and are unwilling to accept responsibility for critical resources in the organisation.
Both public and private organisations frequently struggle to successfully manage their material resources, beginning with purchase and progressing to stores, issuance to user departments, and eventually finished items. These material resources are few and must be used wisely for proper assimilation.
The reasons that contributed to or are accountable for the demise of various companies present varied issues. Financial resource management is neglected and has caused most organisations to lose a significant portion of their funds through these enterprises because of fraudulent acts, indiscriminate financing, poor management, lack of zealousness and experienced personnel, and inability to utilise its financial potentials, etc.
Poor quality and low quantity of product have revealed that the quality of human and material resources in place in organisations does not meet expectations, reducing firm productivity.
1.3 Object of the Study
The goal of this study is to evaluate the impact of resource management on organisational development. The precise aims include:
1. To determine the necessity of implementing an employee programme in an organisation.
2. Determine the influence of material resource management on organisational development.
3. To identify the sources of inadequacy in financial resource management.
4. To identify and determine some of the difficulties posed by materials management in an organisation.
5. To investigate the issue of increasing employee productivity and efficiency.
1.4 Significance of the Study
The study’s significance highlights the importance of an organization’s ongoing development of resource management methods for organisational development.
The importance of the study includes the following:
a. It will aid managers in determining the requirement for human resource training and development, as well as ensuring that the appropriate number of skilled/trained employees are available for employment at all levels of the organisation at the appropriate time.
b. The study will have a favourable impact on the rate at which resources are properly utilised and how they can lead to increased productivity in the organisation.
c. Students who want to be material executives in the future regard this study as an opportunity to delve deeply into the subject of human, material, and financial resource management and understand the problems that lie ahead.
d. It also expects that the findings will help future scholars understand resource management and how it might contribute to organisational development.
1.5 Statement of the Hypothesis
For the goal of this investigation, the following hypothesis is developed:
Ho: Resource management does not play an important part in organisational development.
Hello: Resource management is an important part of organisational development.
1.6 Scope and Limitations of the Study
The study aims to evaluate the impact of resource management on organisational development. The study would be limited to Power Holding Company of Nigeria plc.
An organization’s resources include people, materials, money, and machinery. This study will not cover all of PHCN’s resources, thus it will focus on human, material, and financial resources.
Data were collected and used based on records obtained from the organisation, and they only covered records from previous years because relevant information that should have been obtained based on recent and current events was not provided due to problems arising in the organisation in the form of machine breakdowns, mismanagement, fraud, and so on.
Other materials, such as textbooks, journals, magazines, and internet browsing, will be used as secondary sources of data for the research study.
The study’s scope has constrained the research activity, and any research project is bound by specific limits. The limitations of this study work include the following:
a. Financial limitation: This is considered the researcher’s first constraint. This prevented students from gathering all of the necessary data for this study project.
This did not help matters because, as a student, one had limited funds at their disposal, which was one of the elements that discouraged the researcher from going any further. This extent in obtaining all of the necessary data from this study work.
A common example is a fund for travelling to various locations to gather knowledge and purchasing appropriate literature text books that are not available in the school library.
b. Available data: Incomplete and erroneous data make it difficult to conduct this research. In fact, most senior staff were either too busy with their official responsibilities to give the researcher the necessary time to gather information, or they were unwilling to do so, though some did cooperate.
c. Time constraint: This was the most significant constraint faced by the researcher because combining rigorous institutional drilling, i.e. lectures, assignments (both individual and group), tests, and carrying out the research work made it nearly impossible to devote all of the time required to carry out this research work.
1.7 Definition of Terms
To avoid any ambiguity in the terminologies used in this research, the following are offered optional definitions:
-Human Resource Planning (HRP): This is the process of placing the appropriate amount of qualified people in the right jobs at the right time.
Productivity is a measure of how effectively resources are brought together in organisations and used to achieve a set of goals. Productivity means achieving the best level of performance with the least amount of resources.
Organisation is the process of separating work into convenient tasks or duties, arranging such obligations in official posts, delegating authority to each post, and appointing trained workers to ensure that the work is completed as intended.
Motivation refers to the instructional and logical processes by which people seek to meet their underlying desires, perceived needs, and personal goals that drive human conduct.
Forecasting is the process of estimating the amount of individuals needed in the future, as well as their skills and competencies.
Material management is defined as the grouping of all or some of the activities involved in the organisation and use of materials from the point of need to the storage of produced commodities.
Purchasing is described as the action of obtaining by legal means the goods, suppliers, and equipment essential for the running of a business.
Sourcing is the process of investigating and evaluating potential sources of supply and providers.
Negotiation is a process of planning, receiving, and analysing utilised by both buyers and sellers to reach an acceptable agreement through mutual understanding.
Expediting is the process of ensuring that items get at their destination on time.
A purchasing requisition is a form that is typically used when a department or store needs to purchase items.
Issue: The issue is the withdrawal of items and the delivery of some of the user’s authorised documents.
Quality control is the practice of examining goods and services to ensure that they meet predefined criteria.
Obsolescence refers to materials that are no longer in demand due to a superior substitute, lack of use, or fashion trends.
Stocktaking is the comprehensive process of evaluating the quality balance of the entire merchandise held in the store.
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