BUDGETING AND BUDGETARY CONTROL AS TOOLS FOR ACCOUNTABILITY IN GOVERNMENT PARASTATALS
ABSTRACT
This investigation was an investigation into the application of budgeting and budgetary management as instruments for government accountability Government-owned corporations (A case study of Enugu State Housing Development Corporation).
Budgetary control is a numerical expression of a plan of action prepared ahead of time for the period in question. The organization is dealing with a fiscal dilemma when it comes to planning and controlling its activities. The study’s goal is to see if budgeting and financial management have an impact on the quality of services provided by government parastatals.
The study also intends to see if financial control helps to increase management efficiency and productivity. The information was gathered from both primary and secondary sources. Textbooks, periodic articles, and journals were used as secondary sources of information.
Personal interviews with functional and departmental heads were undertaken in addition to the distribution of questions. Bowley’s proportionate allocation formula was used to select a sample size of 60 from among the number of departments/sections.
Tables and basic percentages were used to examine the data, and chi-square statistics were used to test the hypothesis. We discovered that budgeting and budgetary control had an impact on the quality of service delivery in government parastatals, among other things.
Budgeting and budgetary control, it was also shown, contribute to increased management efficiency and productivity. In light of the foregoing, we recommend, among other things, that budget planning and preparation become a corporate responsibility of unit heads in collaboration with heads of departments, that laws be improved, and that realistic budget targets be set. Top management should adhere to the budgetary provision.
CONTENTS TABLE OF CONTENTS
Page 1: Title
Page of approval…………………………………………………………….i
Dedication……………………………………………………………………ii
Acknowledgement.………………………………………………………iii.
Abstract.……………………………………..…………………….………………..…iv
Table of Contents…………………………………………………………….v
THE FIRST CHAPTER:
1.0 Introduction and key words
……………………………………………………1
1.1 Background of the research
……………………………………………………1
1.2 The problem is stated.
…………………………………………….…………4
1.3 The research’s main goal.
………………………………………………………4
1.4 What is the research question?
……………………………………………………..……5
1.5 The research hypothesis.
……………………………………….……………5
1.6 The significance of the research
………………………………………..……………6
1.7 Scope and limitations.
……………………………………………………..…7
1.8 Terms and their definitions
…………………………………………………………8
TWO-THIRD CHAPTER
2.0 Review of the relevant literature
……………………………….………………10
2.1 Budgeting and financial planning
……………………………….……………………10
2.2 Current ideas and models literature
……………………………….……..19
2.3 Empirical research
……… …………………….…….……..21
2.4 Budget characteristics
… ……………….……..23
2.5 Budgetary Control…………………………………………37
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2.6 Budget zero-based budgeting is an area where innovation is needed (Z.B.Z)
…….……42
2.7 Benefits of zero-based budgeting
……………………………………..44
2.8 Negative aspects of zero-based budgeting
………… ……..44
THIRD CHAPTER:
3.0 Methodology of Research
.………………… ………..…..48
3.1 Research design……………………………………..48
3.2 Information source
………………… ………………………..49
3.3 The study’s sample size.
……………… ……….………………50
3.4 Technique for collecting samples.
……………… …………..…..51
3.5 Data gathering instrument
………… ……………………..53
3.6 Research instrument reliability and validity
………… …………54
3.7 Data Analysis Methodology
……… ………………………….…54
3.8 Validation of hypothesis decision criteria
………………………55
FOURTH CHAPTER:
4.0 Data Visualization and Analysis
…………………………56
4.1 Data Presentation……………………………………………………….56
4.2 Hypothesis Validation
…………………………………..………75
FIVETH CHAPTER:
5.0 Findings Summary / Conclusion and Recommendation ……..……….87
5.1 Conclusions and Recommendations
…………………………………………………….87
Conclusion…………………………………………………………………………….88
5.3 Recommendation……………………………………………………….53
References…………………………………………………………91
Appendix 1……………………………………………………………………..93
…………………………………………………………………………..
vi
THE FIRST CHAPTER
INTRODUCTION (1.0 MINUTES)
1.1 INTRODUCTION TO THE STUDY
The efficiency and efficacy of a company’s operations
In practically any corporate organization, there are multiple activities going on at the same time, such as producing, purchasing, distributing, selling, and financing a product, depending on the control accessible to management. These are intertwined in such a way that they have an impact on the organization’s objectives.
Budget is defined by the Institute of Cost and Management Accountants (ICMA) as a financial or quantitative statement made and approved prior to a specific period of time of the policy to be pursued during the period for the aim of achieving a given goal. Income, expenditure, and employment capital may all be included.
As a result, in order to meet these aims or goals,
The organization must conserve resources and find ways to achieve these objectives. These objectives can only be achieved if the property’s intended use of available resources is successfully controlled and coordinated. As a result, a system for operating a firm that involves forecasting several variables
activities and putting a financial value on each projection becomes critical. These predictions
Are directed by information and the implementation of a planned system, such as budgeting procedures, variance analysis, and so on.
Pandy (2008) defines budgeting control as the creation of a departmental budget that binds the executive’s responsibilities to a policy’s demand, as well as the ongoing comparison of actual budgeted results with individual actions. The goal of such policy is to establish a solid foundation for future revisions.
Budgeting, according to Osisoma (2000), is a systematic and codified technique to completing management’s planning, coordination, and control tasks.
It is the process of drafting a brief statement of plans articulated in quantitative terms in advance of the time to which it refers, which, if used with sophistication and good judgment, would help an organization achieve its goals.
A budget is a plan that is quantified in monetary terms and is produced and authorized ahead of time for a specific period of time, usually detailing expected income and/or expenditure for that period, as well as the capital to be used to achieve specific goals.
Lacey (2002) defines a budgetary control as a numerical manifestation of a plan of action prepared in advance of the period to which it refers. Budgets can be made for the entire company or for specific departments.
Departments, for operations like sales and manufacturing, or financial and resource issues like cash, capital expenditure, labor, purchasing, and so on. The process of drafting and agreeing budgets is a way of turning the organization’s general objectives into particular, achievable plans of action.
As a result, it is appropriate to state that the priority placed on this strategy and the work put forth in controlling finances varies each organization. Once the goals are determined, which must be founded on a rigorous feasibility analysis within the content of the political and social value, the plans will allow it to work toward its attachment.
When these plans are implemented, conditions frequently occur that lead to deviations from the plan, and corrective steps are always required to get the firm back on track. Budgeting and budget control were part of the procedure as it was implemented.
And, to bolster goal congruence, appropriate strategies should be employed to specific areas that require special attention; hence, the importance of comparing budgeted with real to arrive at the finance cannot be overstated. If the budgeted estimate compares favorably to the actual, a company is said to be on the right track. The little that has been said about this initiative has covered every angle in which the subject can help.
4
It should be viewed as a guidance for people rather than a management decision.
Business.
1.2 DEFINITION OF THE PROBLEM
The business’s growth is hinged on, or better expressed, rests squarely on units.
As a result, budgetary control systems or procedures are seen as critical instruments in any corporate circumstance. The goal of this research is to measure and evaluate the extent to which budgetary control has been a tool for any organization’s growth and global realization.
Due to a lack of budgeting in planning and management, funds intended for more feasible activities have been used indiscriminately. Many firms’ inability to plan and achieve budget targets can be traced back to their inability to implement controls to their budget system.
Budgetary objectives are not met due to a lack of understanding of the budget system among middle and lower-level management personnel. Stock shortages and shutdowns are also issues. These are only a few of the issues that arise from a lack of financial management.
THE STUDY’S OBJECTIVE (1.3)
The study’s main goal is to accomplish four things. They consist of the Following
i. Determine whether budgeting and budgetary control have an impact on the quality of service delivery in government parastatals.
ii. To see if there is a link between the sort of budget used and its actual performance.
iii. Determine whether budgetary restrictions, as a management instrument, help to improve management efficiency and productivity.
iv. To determine whether budgetary restrictions are used as an assessment parameter for evaluating managers’ budgets.
1.4 QUESTIONS FOR FURTHER RESEARCH
i. Do budgeting and budgetary controls have an impact on the number of services provided by government parastatals?
ii. What is the relationship between the budget type implemented and the actual performance?
iii. How can budgetary control as a management tool help improve management efficiency and productivity?
iv. How may budgetary control be utilized to evaluate the budget of the manager?
1.5 THE STUDY’S HYPOTHESIS
1. H0: In government parastatals, budgeting and budgetary management have no effect on the number of services delivered.
H1: Budgeting and budgetary control influence the amount of money available.
Government parastatals provide services.
2. H0: Budgeting and budgetary control do not help to boost management efficiency and production.
H1: Budgeting and budgetary control aid in management efficiency and production.
3. H0: The manager’s budget is not assessed using budgeting and budgetary control.
H1: The manager’s budget is assessed using budgeting and budgetary control.
4. H0: The type of budget implemented has no bearing on actual performance.
H1: There is a link between the sort of budget used and the actual results.
1.6 THE STUDY’S IMPORTANCE
Budgeting and budgetary control are crucial functions for any business. It is not just unique to manufacturing companies, but also important for government service.
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