BUDGET AND BUDGETARY CONTROL AS A TOOL FOR ACCOUNTABILITY IN GOVERNMENT PARASTATALS
(A CASE STUDY OF ENUGU STATE HOUSING DEVELOPMENT AUTHORITY)
ABSTRACT
Government and private establishment prepare estimates of income and expenditure which are planned by an organization for a specific period.
Consequent upon this, we aim at finding out how budgets both organized private sector and in government are prepared, used/or applied for effective decision making and for enhancement of profit maximization so to say.
In a bid to achieve good result from the study, it became necessary to work in chapters.
Chapter one: introduction, the research work stated the problem associated with budget and budgetary control in government parastatals, listed the objective, significance of the study, its scope and limitation implying on the study.
Chapter two: reviewed the existing literature in relation to budgetary and budgets.
Chapter three: presented the sources of data used by the researchers.
Chapter four: presented various data collected and their analysis. The hypothesis was listed using CHI-SQUARE METHOD.
Chapter five: presented the summary of finding, made certain conclusion and suggested various recommendations and measures to improve the budget and budgetary control in government parastatals.
This research work will help in studying how a private establishment prepares estimates of income and expenditure for a specific period. With a particular reference to Enugu State Development Authority to find out how budget both in organized private sector and in government are prepared. For effectiveness decision making and for enhancement of profit maximization, questionnaires will be prepared and also will be given to senior staff officers heading various departments and sector in the office.
Chapter one will contain general discussion of budget and budgetary control in the government parastatals, both the problems, objective of the study, scope and its limitation.
Chapter two will help to review related literature as it relates to the budgetary and budgets.
Chapter three, will deal with the design of the study, the methods being used in collecting relevant data. It will also deal with way of which the questionnaires will be distributed and the treatment of data.
Chapter four shows the various data collected and their analysis and show how it will be interpreted.
Chapter five will also contain the summary and the presentation of findings, conclusion and recommendation which will be made by the researcher.
CHAPTER ONE:
1.1 Background
1.2 Objective of the study
1.3 Significant of the study
1.4 Statement of the problem
1.5 Hypothesis formulation
1.6 Scope and limitation of study
1.7 Definition of terms
CHAPTER TWO:
2.1 Budgeting and Budgets
2.2 Typology of budgets for planning and control
2.3 Features of Budgets
2.4 Fundamentals of Budgeting and Budget Administration
2.5 Preparation of Budgets
2.6 Budgetary controls
2.7 Innovation in the area of budget
Zero-Based Budgeting (ZBB)
Historical Background
CHAPTER THREE:
3.1 Source of data
3.2 Research Population
3.3 Sampling method used
3.4 Questionnaire Design
3.5 Description of respondents
3.6 Method of data analysis in the questionnaire
3.7 Analysis of Hypothesis
CHAPTER FOUR:
4.1 Presentation of data
4.2 Analysis of questionnaires
4.3 Testing of Hypothesis
CHAPTER FIVE:
5.1 Discussion of findings
5.2 Conclusion
5.3 Recommendation
Bibliography
CHAPTER ONE
1.1 BACKGROUND:
The efficiency and effectiveness of the operations of a business depends on the control available to managements in almost every business organization, there are a number of activities going on at the same time such as producing purchasing, distributing, selling and financing a product. These are interrelated in such a way that they affected the attainment of the organization goals.
The Institute of Cost and Management Accountant (ICMA) defined budget as a financial or quantitative statement prepared and approved prior to defined period of time of the policy to be pursued during the period for the purpose of attaining a given objectives. It may include income, expenditure and the employment of capital.
Therefore, in order to achieve these objectives or goals, the organization must economize resources and discover the means of achieving these goals. These goals can only be realized when the properly planned use of available resources are controlled and co-ordinated effectively. Thus a system of managing a business by making forecasts of the different activities and applying a financial value to each forecast becomes imperative. These forecasts are guided by the formulation and adoption of planned systems such as techniques in budgeting, variance analysis, etc.
Tubbi, J. A. 1982 defined budgetary control as the establishment of departmental budgets relating the responsibilities of the executives to the requirement of a policy, and the continuous comparison of actual with budgeted results either to secure by individual action the objective of that policy or to provide a firm basis for its revision.
It is therefore, germane to say that the level of importance that is attached to this plan and effort made in controlling the variance differ in organizations. Once the goals are set, which must be based on the detailed analysis of feasibility within the content of the political and social value then the tactical plans will enable it to strive towards its attainment.
Often than not when these plans are put into operation, conditions prevail which tends to cause deviation from the plan and corrective measures are always taken to steer the business back on the right track. The process already mentioned as it is applied entails budget and its control. And to lend credence to goal congruence suitable techniques should be applied to specific areas that need special attention hence the measurement of budgeted with actual to arrive at the variance cannot be over-emphasized. A business is said to be on the right tract if the outcome of the budgeted estimate is favourable as against the actual. The little that is said concerning this project has not encompassed all avenues in which the subject can aid management decision, rather it should be seen as a guide for people in business.
The primary purpose of this study is four fold. These are:
This report is significant in that it will:
(a) Determine whether budgeting and budgetary controls play any significant role towards ensuring profitability and efficient rendering of service.
(b) Evaluate the role played by top management in the budgetary process and whether they ensure the act to budget.
(c) Determine the roles of budget as a tool for effective and efficient management of resources.
This study will be a guide to scholars; researchers or writers who may wish to carry further study on budget and its control apparatus.
The growth of any business hinges, or better put, rests squarely units budgetary control system or techniques – hence they are considered as a vital tools in any business situation. This study then is aimed at assessing and evaluating the extent to which budgetary control has been a tool for the growth and goal realization of any organization.
Lack of budgets in planning and control has resulted in the indiscriminate use of fund meant for more viable activities. Again, the inability of many companies to plan and accomplished budget goals is traceable to their inability to apply controls in their budget system.
Budgetary goals are not realized also due to low level of understanding of the budget system by middle and low level management staff. Other problems are shortage of stocks and shutdown. These and many more are some of the problem of lack of budgetary control.
H1: Budgetary control is an essential tool in management decision-making.
HO: Budgetary control is not an essential tool in management decision-making.
H1: Budgetary is used as bases for cost control.
HO: Budgetary is not used as bases for cost control.
H1: Budgets are effective means of planning business activities.
HO: Budgets are not effective means of planning business activities.
This study is aimed at finding out the impact of budget and budgetary control in Enugu State Housing Development Authority. The limiting factors is that of availability of data which might be difficult to obtain following the trend of the attitude of Nigerians with regards to giving out information. Time constraint is also a limiting factor in undertaking this study. The available time and the short period of study made it difficult for the researcher to carry out a wider and more thorough work on the issue, and at the same time carry out academic activities.
Also literature on the topic as it relates to government parastatals is very few.
BUDGET: Simply put budget means estimate of income and expenditure, which are planned by an organization for a specified future period. In Britain, it means the annual statement made to the House of commons by the chancellor of the Exchequer, giving details of the governments financial plans for the coming year.
BUDGET: In a short term, financial plan which guide managers in achieving the objectives of a firm. A budget may be defined as a comprehensive and coordinated plan, expressed in financial terms, for the operations and resources of an enterprise for some specific period in future. Alternatively, a budget is a formal expression of managerial plans in quantitative and financial terms encompassing different phases of business operations, and aimed at assisting management in attaining the organizational objectives.
BUDGETARY CONTROL: This means a system of managing a business by making forecasts of the different activities and applying of financial value to each forecast. Actual performance is subsequently with the estimates.
VARIANCES: This is the difference between the estimates and actual result.
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