A CRITICAL ANALYSIS
OF BUDGETARY CONTROL: ITS EFFECTIVENESS
AND EFFICIENCY IN A NON PROFIT MAKING ORGANIZATION
(A CASE STUDY OF N.C.R.I BADEGGI)
TABLE OF CONTENTS
Title page
Approval
page
Dedication
Acknowledgement
Propose
Table
of contents
CHAPTER ONE: Introduction
1.1
Purpose of the study
1.2
Statement of the problem
1.3
Objective of the study
1.4
Scope of the study
1.5
Research question
1.6
Research hypothesis
1.7
Limitation of the study
1.8
Definition of terms
CHAPTER TWO
LITERATUREE REVIEW
2.1
Budgetary control in a non
profit organization
2.2
Background information
2.3
Mgt. And administration of
budgetary control
2.4
Budget preparation
2.5
Budget implementation and
control process
2.6
Reasons for production of a
budgetary control system
2.7
Problems associated with the
budgetary control system
2.8
Organization structure
CHAPTER THREE
RESEARCH METHODOLOGY
3.1
Research design
3.2
Area of the study
3.3
Population of the study
3.4
Sample and sampling procedure/
technique
3.5
Instrument for data collection
3.6
Validation of the instrument
3.7
Reliability of the instrument
3.8
Method of data collection
3.9
Method of data analysis
CHAPTER FOUR
PRESETATION OF DATA AND
ANALYSIS
4.1
Presentation and analysis of
data
4.2
Testing of hypothesis
4.3
Summary of result
4.4
Interpretation of results
CHAPTEWR FIVE SUMMARY/
CONCLUSION AND RECOMMENDATION
5.1
Discussion of results and
findings
5.2
Conclusion
5.3
Recommendation
5.4
Suggestions for further
research
Bibliography.
QUESTIONNAIRE
FOR RESEARCH STUDY
I am a final year student of the Department of
Accountancy in the above named institution, undertaking a research on “The
Critical Analysis of Budgetary Control: it’s Effectiveness and Efficiency in a
non profit making organization”
Please, do study questionnaire and kindly supply all the
information required. All formation given would be appreciated and would be
treated as highly confidential.
Thanks for your co- operation
CHAPTER ONE
INTRODUCTION
The
essence of budgeting is to provide an essential element of control in an
organization in order to facilitate the
achievement of set objectives .The control process is the fundamental organization link
between the manager and the other people in an
organization in a non profit making organization output
various with the objective with which they were established. The objective of
public organization could be social and or development in nature
. however this
does not means that public organization can not make profit
if government policy changes to
privatizing or commercializing them. The main structural problem of
these type of organization is the sacrifice of the organization profitability for social efficacy which must
be achieved in research institute
Badeggi falls into this category.
With the use
of budget as a control tool, there is Ned for planning a the performance of an
organization. Planning as
defined by C.I.M.A is an the
establishment of objective and the
formulation evaluation and selection of the formulation of the policies
strategies tactics and action required
to achieve these objective, by planning activities in advance more economical
use is made of the organization resource and facilities and a
fairly accurate estimates of it s future resources requirement can be
determined.
One of the
outstanding features of budgetary control is that policy plans resource s and
activities of the organization are coordinated integrated and controlled to achieve the desired
objectives.
Budgetary
control is a means of providing some centralizing control where activities and
also responsibilities are decentralized.
It is also the
use of budget for assigning responsibilities planning and controlling
performance and guiding managerial and other activities of the firm towards the
achievement of organizational objectives. It involves, setting out clearly
defined forgets of output , income and
expenditure for each section of the organization .Embodying these forgets of
performance in sectional divisional and departmental budgets co0mpariing these budget standards
with actual performance .identifying deviations or variances from the budget
and taking corrective action or bringing performance in line with budget
targets .this is because all the heads of departments in the organization are
involved in the preparation and implementation of budgets, while management5
control the whole activities of the organization.
Budgets are prepared as a
result of committee work .Each cmmittee constituting of representatives of
various departments and functions to be controlled .the heads of departments
are responsible for the respective department
budget
Each executive
or manager can then fully appreciate his responsibilities ,as they are
reflected in his department budget .Any deviation of the actual result from the
estimate and forecast are traced back to
the department head or manager.
1.1 PURPOSE
OF THE STUDY
Most of the non_ profit making
organization in Nigeria are governmental
in nature, this is because they are mainly set up for social and developmental
purposes, this usually leads to a poor planning and control measures. The
purpose of this study is to critically analyze the budgetary control system as
a planning tool in non_ profit making organization using National cereals Research
institute as a case study. This research work intend to bring about
clearer understanding of the need for an effective and efficient budgetary
control in a nonprofit making
organization which will also be of
benefit to other similar
Organization
leading to an improvement in government owned organization budgetary control
system.
1. 2
STATEMENT OF PROBLEMS
public sector and other nonprofit making organization are
often noted for inefficiencies and poor
management, which is as a result of poor
planning through repetitive budgeting. Recent studies in the area of
budget and resources allocation have shown lack of proper analysis. There is a
general lack of the concept of why we have a budget at all. This issue calls
for immediate investigation of budgeting
as a tool for resources planning and performance control and to recommend how
it can function properly.
1.3.
OBJECTIVE OF THE STUDY
The
main objective to be achieved
from this research work is that, it will; serve as a means of measuring the
output or the work performed and to compare it with the cost of input. This
comparison provides a basis for indicating efficiency and effectiveness.
The process of comparing actual results
with planned and evaluating variance if any set a control frame works which
help expenditure to be kept within an agreed limit. If this deviations are noted, so that action
can be taken to correct this in the future.
1.4 SCOPE OF
THE STUDY
The study intend to cover budgetary
control as it affect National cereals Research institutes {N.C.R I} . it
will examine its budgeting control as a measure
of performance.
1.5
RESEARCH QUESTIONS
The followings are the research questions of the study.
1.
Historical Background
A Was there any Decree /Act by Government
that established the institute? (If any, quote with date.)
B What are the objectives of the Federal
Government in establishing the institute?
C How does the institute relates with the
ministry?
D What
is the organization structure of the institute like?
E Looking at the organization structure,
what are the function of this department?
2.
Funding / Expenditure
A How do you budget for the institute / or
what are the Department that participate in the preparation of budget and
disbursement of the fund to Department etc?
B Do you have a budget committee for the
preparation of budget. What does it comprise of?
C It is understood that Federal Government
plays a major role in funding, what are the other sources of fund, with regard
to sponsorship, loans, etc. Take a look at three consecutive financial fear.
3.
Budgetary Control
A How does the management control the
activities of the institute with regards to administration of budget, in
respect of resources, personnel etc?
B Is there any external monitory agent from
the parent ministry that supervise the management? How is this carried out?
PROVISION FOR NO
2 ©
Funding /
Expenditure for a particular fiscal year
Sources of fund
Federal
Government Grant
Sales of
produced crops
Sponsorship
Loans
Budget
Actual
Variance
remark
EXPENDITURE
S/N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
14
Description
Staff salaries/ wages
Branch members allowance
Insurance and iciness
Rents
Electricity water and gas
Professional charges
Stationeries, printing
Admin/ establishment
Gener. expense
Advertisement
Board meeting expenses
Transport and travelling
Audit fees and expenses
Bank changes and
commission
Staff training and
conference
Research works:
–
Mechanical
–
Field work etc.
Budget
Actual
Variance remark
1.6 RESEARCH HYPOTHESIS
The
underlisted hypothesis from the framework for carrying out the study
HO:
Budgetary control effective and it s
efficiency is not facilitated by the financing inducing role of government.
HI:
Budgetary control effectiveness and its efficiency is facilitated by the
financial inducing role of government
HO:
Effectiveness and efficiency of budgetary control does not depend excessively
on the provision of basic infrastructures .
H1:
Effectiveness and efficiency of budgetary control expends excessively on the
provision of basic infrastructures.
HO:
Budgetary control are not the hallmark for development of the economy
H1:
Budgetary control are the hallmark for development of the economy.
1.5
RESEARCH
QUESTION
SECTION A
1.
How effective is the
financial inducing role of government towards non profit making organization by
the use of access to borrowing loans etc?
Very adequate Adequate
Very poor Poor
2
Does inadequate
infrastructure facilities like access good road telecommunication, electricity
etc. effect budgetary control in on profit making organization?
Very much Much Very low Low
3
Has establishment promotion
and development of non profit making organization been identified as a strategy
to tacking poverty and sustenance of economic development.
Totally agree Agreed Totally
disagreed Disagreed
4
Has the funding of
non-profit making organization contributed satisfactorily to budgetary control
effective in the development of the economy.
Highly satisfied Satisfied Highly Dissatisfied Dissatisfied
5.
Does non profit making
organization has the hall mark for development of economy
Yes
No Don’t know
SAMPLE QUESTIONNAIRE (STRUCTURED)
PROJECT TOPIC:
The critical Analysis of budgetary control, its
effectiveness and efficiency in a non profit making
organization. A case study of National cereal research institute, badeggi,
Instruction:
Kindly tick ( ) in the boxes provided or supply simple
answers where applicable.
1.7
LIMITATION OF THE STUDY
The
constraints include:
Time
factor, the period within which the research work is expected to be completed
is rather two short for any meaningful work to be done.
financial difficulty, considering the bad economy
situation in the country, effort to have
sufficient research material to be able to write extensively on the
Subject matter proves abortive.
LACK OF ADEQUATE RESEARCH MATERIAL