CHALLENGES AND PROSPECT IN BUGGETARY SYSTEM IN PUBLIC SERVICE IN NIGERIA
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CHALLENGES AND PROSPECT IN BUGGETARY SYSTEM IN PUBLIC SERVICE IN NIGERIA
Chapter one
INTRODUCTION
1.1 Background for the Study
Budgeting is a fundamental idea that applies to any organisation (Schadone 2012). In very general terms, Igbara, Tordee, Nwadike, and Abuba (2016, p.1) defined the budget as the distribution of resources (most commonly money) for specific goals, and because the word can be traced to mean “pouch” or “purse,” a budget is what is in the pouch.
To these authors, a budget is a quantitative embodiment of a strategy over a set period of time. It may consist of planned sales volumes and revenues, resources, quantities, expenditures and expenses, assets, charges, and cash flows.
It expresses the strategic plans of government, business units, organisations, and actions or events in concrete terms. Igbara, Tordee, Nwadike, and Abuba (2016, p.3) also highlighted:
“A budget gives governmental agents the authority to collect taxes, fees, penalties, and fines. It also authorises officials to spend public funds as specified in approved allocations and in conformity with financial regulations.
The authorization by the legislature promotes the concept of popular sovereignty. It also acts as an important tool for calculating total spending vs total revenue. A budget is a scientific method of quantifying and measuring services in terms of cost within a specific period.
Budgeting originated in the public sector. According to Igboeche (2017, p.52), the name “budget” comes from the old English word Bougett, which refers to a sack or pouch. It was a leather bag from which the British Chancellor of the Exchequer extracted this paper to Parliament, the government’s financial plan for the coming year.
According to Omolehinwa (2005), Malgwi and Unegbu (2012, p.1) described the same historical backdrop of budget origins as follows: The word ‘budget’ comes from the French word bougette, which means little sack.
In Britain, the term referred to the leather bag that the Chancellor of the Exchequer used to take to parliament, containing a declaration of government needs and sources.
Following multiple rounds of consensus, the budget became the document contained in the bags that represented government plans stated in monetary terms and submitted to the legislature for approval.
According to Sachdeva and Sogani (1980) in Ekhator and Chima (2015, p.2), the budget in modern times refers to a financial strategy, statement, or document that comprises estimates of revenue and expenditure for a given year.
Ekhator and Chima (2015, p.2) emphasised: This means that a budget is a declaration of the expected revenue and spending for the coming year, together with a financial plan based on it.
However, these days, a budget is more than just a projection of revenue and expenses. It has evolved into an elaborate financial management system that includes not only a plan for public revenue and expenditure, but also the entire material finances disclosed in ministerial statements presented to the legislature, as well as the orderly administration of the government’s financial affairs.
According to Bhattacharya (2000) in Ekhator & Chima (2015, p.2), a budget is more than just revenue and expenditure estimates; it also includes reports on how the government managed affairs the previous year, the state of the public treasury
a plan of work for the coming years, and how such work should be funded. As a result, Ekhator and Chima (2015, p. 2) identified the following budget characteristics:
i. A clear identification of all actions to be carried out within the budget term.
ii. An accurate estimate of the resources needed to carry out the activities outlined;
iii. Funds are allocated among competing departments and activities based on preset priorities;
iv. Develop suitable policies to govern and promote budget execution.
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