Parastatals. (A case study of Enugu
State Housing Development Corporation). Budgetary control is a quantitative
expression of plane of action prepare in advance of period to which it relate.
The organization is face with the problem of lack of budgeting while planning
and controlling their activities. The objective of the study is to determine if
budgeting and budgetary control affect the quality of services delivery in
government parastatals. The research also aims at determining if budgetary control
contributes to the improvement of management efficiency and high productivity.
Data were collected from primary and secondary source. Secondary source of data
were collected from textbooks, periodic articles and journals. Questions were
distributed as well as personal interviews with functional and departmental
heads were conducted. The sample size of 60 were used and was chosen among the
number of department / section using Bowleys proportional allocation formula
Data were analyzed using table and simple percentage, hypothesis were tested
using chi-square statistics. We discovered among other things that budgeting
and budgetary control affect the quality of service delivery in government
parastatals. It was also revealed that budgeting and budgetary control
contributes to the improvement of management efficiency and high productivity.
In line with the above, we recommend among other things that the budget plan
and preparation should be a corporate duty of the unit heads with head of
department in the corporation, improving legislation, realistic budget target.
Adherence in the budgeting provision should be practiced by top management.
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TABLE
OF CONTENTS
CHAPTER ONE:
1.0 Key words / introduction
1.1
Background of
the study
1.2
Statement of
problem
1.3
Objective of the
study
1.4
Research
Question
1.5
Hypotheses of
the study
1.6
Significant of
the study
1.7
Scope and
limitation
1.8
Definition of
terms
CHAPTER TWO
2.0 Review of related literature
2.1 Budgeting and budgets
2.2 Current literature on theories models
2.3 Empirical study
2.4 Features of budgets
2.5 Budgetary control
2.6 Innovation in the area of budget zero –
based budgeting (Z.B.Z
2.7 Advantage of zero based budgeting
CHAPTER THREE:
3.0 Research Methodology
3.1 Research design
3.2 Source of data
3.3 Population of the study
3.4 Sample / sampling technique
3.5 Instrument for data collection
3.6 Reliability / validity of research instrument
3.7 Method of
data Analysis
3.8 Decision criterio validation of hypothesis
CHAPTER FOUR:
4.0 Data Presentation and Analysis
4.1 Data presentation
4.2 Testing Hypothesis
CHAPTER FIVE:
5.0 Summary
of Findings / Conclusion and Recommendation
5.1
Summary of
Findings
5.2
Conclusion
5.3
Recommendation
References
Appendix 1
Questionnaires
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CHAPTER ONE
1.0
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The efficiency and effectiveness of the operations of a
business
depends on the control available to management 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 affect the attainment
of the organization goals.
The institution 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 pursed during the period for the purpose of attaining a given objectives.
It may include income, expenditure and the employment 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 property planned use of available resource are controlled
and co-ordinate effectively. Thus a system of managing a business by making
forecast of the different
activities and applying a financial to each
forecast becomes imperative. These forecasts are guided by the information and adoption of planned system
such as techniques in budgeting, variance analysis. Etc.
Pandy (2008) defines budgeting
control as the establishment of departmental budget relating the
responsibilities of the executive to the requirement of a policy, and the
continuous comparison of actual budgeted result either to secure by individual
actions. The objective of that policy is to provide a firm basis for its
revision.
Osisoma, (2000) opined that
budgeting is a systematic and formalized approach for accomplishing the
planning, co-ordination and control responsibilities of management. It is a
process of preparing in advance of the period to which it relates a summary
statement of plans expressed in quantitative terms, which if utilized with
sophistication and good judgment, would enhance the attainment of an
organization’s objectives. A budget therefore, is a plan quantified in monetary
terms, prepared and approved prior to a defined period of time, usually showing
planned income to be generated and /or expenditure to be incurred during that
period, and the capital to be employed to attain a given objectives.
A budgetary control is described by lacey,
(2002) as a quantitative expression of a plan of action prepared in advance of
the period to which it relates. Budget may be prepared for the business as a
whole, for Departments, for functions such as sales and production, or
for financial and resources items such as cash, capital expenditure, manpower,
purchase. Etc. the process of preparing and agreeing budgets is a means of translating
the overall objectives of the organization into detailed, feasible plans of
action. It is therefore, germane to say that the level of importance that is
attached in this plan and effort made in controlling the finance 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
the plans will enable it to strive towards its attachment.
Often than not when these plans are
put into operation, conditions prevail which trends 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 entailed budget and
its control. And to lend credence to goal congruence suitable techniques should
be applied to specific areas that need special attention hence measurement of
budgeted with actual to arrive at the finance cannot be over emphasized. A
business is said to be on the right track if the outcome of the budgeted
estimate is favorable as against the actual. The little that is said concerning
this project has encompassed all avenues in which the subject can aid management decision,
rather it should
be seen as
a guide for
people
Business.
1.2
STATEMENT OF THE PROBLEM
The growth of the business hinges, or better put, rests
squarely units
Budgetary control system or techniques hence they are
considered as vital tools in any business situation. This study then is aimed
at assessing and evaluating the event to which budgetary control has been a
tool for the growth and global realization of any organization.
Lack of budgets in planning and
control has required 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 due
to low level of understanding of the budget system by middle and low level of
management staff. Other problems are shortage of stocks and shut down. These
and many more are some of the problem of lack of budgeting control.
1.3
OBJECTIVE OF THE STUDY
The primary purpose of this study is
four fold. They include the
Following
5
i.
To
determine if budgeting and budgetary control affect the quality of service
delivery in government parastatals.
ii.
To
determine if there is a connection between the type of budget implemented and
their actual performance.
iii.
To
determine whether or not budgetary controls as a management tools contribute to
the improvement of management efficiency and high productivity.
iv.
To
find out the use of the budgetary controls as an appraisal parameter for
assessing managers budget.
1.4
RESEARCH QUESTIONS
i.
Does
budgeting and budgetary controls affect the quantity of services delivery in
government parastatals?
ii.
What
are the connection between the type of budget implemented and their actual
performance?
iii.
How
can budgetary control as management tools contribute to the improvement of
management efficiency and high productivity?
iv.
How
can budgetary control be used for assessing Manager’s budget?
1.5 HYPOTHESIS
OF THE STUDY
1.
H0:
Budgeting and budgetary control does not affect the quantity of services
delivery in government parastatals.
H1: Budgeting
and budgetary control affect the quantity of
Services delivery in government parastatals.
2.
H0:
Budgeting and budgetary control does not contribute to the improvement of the
management efficiency and high productivity.
H1: Budgeting and budgetary control
contribute to the improvement of the management efficiency and high
productivity.
3.
H0:
Budgeting and budgetary control is not used for assessing manager’s budget.
H1: Budgeting and budgetary control
is used for assessing manager’s budget.
4. H0: There is no connection between
the type of budget implemented and actual performance.
H1: There is connection between the
type of budget implemented and actual performance.
1.6 SIGNIFICANCE
OF THE STUDY
Budgeting and Budgetary control is a
function that is very important and of great significant to any of
organization. It is not peculiar to only the manufacturing organization but
also necessary to service of the government.
The study will contribute towards
enhancing profits of the organization, business or an individual. It will help
to control one’s income.
Budgeting is necessary to make matters simple and hence life
easy to handle.
Budgeting guides
people towards the allocation of money in different sectors, such as food,
shelter, clothing, household expenses, medical care, utilities etc.
In case of an annual budget of a
nation budgeting makes a blueprint of the overall funds that the concerned
government will spend on various sectors, the kinds of tax that would be levied
and how the prices of essential commodities would increase or decrease in the
month ahead.
In summary, this study will be a
guide to scholars, researchers or writers who may wish to carry further study
on budget and its control apparatus.
1.7
SCOPE AND LIMITATION OF THE STUDY
This study is aimed at finding out
the impact of budget and budgetary control in Enugu State Housing Development
Corporation.
The limiting factors are 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
constraints are also a limiting factor in undertaking this study. The availability time and short
period of the study made it difficult for the researcher to carry out a wider
and more through work on the issue, at the same time carryout academic
activities.
Also literature on the topic as it relate to government
parastatals
is
very few.
1.8 DEFINITION OF TERMS
The following are defined in the work:
BUDGET: Budget simply means estimate of
income and expenditure, which are planned by the organization for a specific
future. In Britain, it means the annual statement made to the House of Commons
by the Chancellor of the Exchequer, giving details of the government financial
plans for the coming year.
BUDGETING
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 estimate.
BUDGETING
PERIOD: The
budget period coincides with accounting period. The period varies according to
different organization
THE
MASTER BUDGET:
This is a total budget package which effectively combines in one statement, the
sells, expenses, production and cash budget of an organization.
VARIANCE:
This is the difference between the estimates and actual
Result.