BUDGETING AS AN INSTRUMENT OF ADMINISTRATIVE CONTROL OF PUBLIC AGENCIES IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Budgeting and budgetary control will continue to play a significant role in public organizations in Nigeria, considering the need to compete favorably with other organizations (both public and private) and make sure the organization as a going concern, most government agencies have adopted budgets and budgetary control techniques to effectively and efficiently allocate resources and achieve stated goals. Every Business-oriented organization is aimed among others at making profits as high as possible.  All efforts, therefore are diversified at an effective planning process with a maximum cost involvement in its decision making the drive towards achieving the desired objectives, management often provides a basic guideline which are quantified in financial terms and its mineral values. Budgeting is required to achieve many deferent aims within an organization if not only aid in planning, co-ordinations and communicating the activities of the organization, but also as control and motivating devices in the management of the organization. Budgeting calls for effective monitoring and controlled by the head of the organization since budget animates from different sections departments and all the branches of a company in which no company is an exception so as to guarantee its reliability and also minimize deviation from plans. Budgeting starts with the setting out of the objectives of the organization by the management for the budget year according to the government’s fiscal and monetary guidelines and policies. The top management staff must communicate the policy affect the long term plan to those who are responsible for preparing the current year budget.  The manager prepares the minimal budgets for that area for which they are responsible and submit it to their supervisory officer while the budget is examined and summarized into the master budget which consists of budgeted profits and loss accounts, balance sheets and the cash statement.  The approval of the master budget constitutes authorities of the manager countered in carrying out the plants while they are contained in each budget.  For management to provide adequate control over the budget of an organization, It should coordinate all the various phases of the firm’s activities and the collaboration of the responsible parties in achieving the actual results with a budget to establish the variance.  It should trace the variances to where it arose so as to control the various effects.

 

1.2   STATEMENT OF THE PROBLEM

The decision as to how to distribute limited financial and non-financial resources, in an effective and efficient manner, is an important challenge in all organizations. In government agencies, this task would be nearly impossible without budgeting. Without an effective budget analysis and feedback about budgetary problems, many organizations and government agencies would become bankrupt. Some of the problems arise from inadequate data to formulate and implement a proper budget; and nonexistence of well-defined structure, which leads to overlapping of duties. These deficiencies can, therefore, be addressed through the use of budgeting instrument. Therefore, this study traces the extent by which budgeting can use as a good planning and controlling tool in the Ministry of Finance, Uyo.

 

1.3   OBJECTIVES OF THE STUDY

The main aim of the study is to examine budgeting as an instrument of administrative control of public agencies in Nigeria. Specific objectives of the study are:

To find out whether budgetary aid effective planning and control in the Ministry of Finance, Uyo. To examine whether budgeting control is used as an instrument for enhancing organizational performance. To examine whether budgetary control affects the working performance of employees in the Ministry of Finance, Uyo. To determine whether budgetary control has contributed to the success of the Ministry of Finance, Uyo.

1.4   RESEARCH QUESTIONS

In order to guide the study and achieve the stated objectives for the study, the following research questions was formulated:

Does budgeting aid effective planning and control in the Ministry of Finance, Uyo? Does budgetary control use as an instrument for enhancing organizational performance? Has budgetary control contributed to the success of Ministry of Finance, Uyo? Does budgetary control affect the working performance of employees of the Ministry of Finance, Uyo?

1.5   RESEARCH HYPOTHESES

HYPOTHESIS 1

H0:  Budgetary does not aid effective planning and control in Nigeria in the Ministry of Finance, Uyo.

HYPOTHESIS 2

H0:  Budgetary control does not use as an instrument for enhancing the organization.

 

1.6  SIGNIFICANCE OF THE STUDY

The addition of knowledge is basically the aim of every research and this research work seeks to achieve just that. More importantly, this research is necessary for understanding how budgetary control is established, and also how it affects organizational performance.  It is a tool that measures managerial performance of an organization and promotes good morale and harmony in the organization. It enables the organization to verify whether or not the plans of the organization are understood by all members, and put into effect corrective measures where deviation or under deviation is occurring.  Since a budget is a tool for planning, and financial planning is of almost significance to a businessman, it enables the organization to project the future consequences of present decisions in order to avoid surprises and understand the link between the present and future decisions.

 

1.7   SCOPE OF THE STUDY

The study examines budgeting as an instrument of administrative control of public agencies in Nigeria, using the Ministry of Finance, Uyo as a study area.

 

1.8   LIMITATION OF THE STUDY

The study limitation was the inability of management to divulge certain information which they consider sensitive and fear of publication which might be detrimental to their operation.

Distance and its attendant cost of travel in order to obtain information on which to write this study was also a major limitation. Another limitation to the study is short time factor which did not give time for thorough research work, hence gathering adequate information becomes very difficult.

Finally, the lack of materials on the topic; this is new in the area of budgeting as an instrument of administrative control of public agencies in Nigeria. Therefore, the researcher resolved to seek a friendly approach in order to obtain the needed materials or information from the organization under study through the administration of the questionnaire.

 

1.9   DEFINITION OF TERMS

BUDGET: The chartered institute of management Accountants (CIMA) defines budget as “a plan quantified in monetary terms, prepared and approved prior to a defined period usually one year, showing planned income to be generated and expenditure to be incurred during that period, and the capital to be employed to attain that objective.
BUDGETARY CONTROL: This is the establishment of a budget relating the responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted results either to secure the individual actions with the objective of that policy or to provide a basis for its revision.
PLANNING: This is the establishment of objectives, and the formulation, evaluation, and selection of the policies, strategies, tactics, and action required to achieve these objectives.

CONTROL: This s the process of ensuring that a firm’s activities conform to its plans and that its objectives are achieved.
VARIANCE: this is the difference between planned (budgeted) and actual results.
Favorable VARIANCE: This is excess of the budgeted result over the actual result, in the case of cost.  But in the case of revenue, it is the excess of that result over the budgeted.
Unfavorable VARIANCE: this is the excess of the actual result is the budgeted in terms of cost and vice-versa in terms of revenue.
BUSINESS: Any establishment which has profit motive or maximization as its major objectives.
ORGANIZATION: All establishment whether government or privately owned

₦5,000.00 – DOWNLOAD FULL PROJECT DOWNLOAD FULL PROJECT Added to cart

---

---

---

---

Related Project Topics :