1.1 OVERVIEW OF
The origin of budgeting could be traced to the
cradle of civilization where Joseph according to the Bible (Genesis 41:33-36)
made a forecast (budget) of corn supplies and planned Pharoah's investment and
consumption policy in light of it budget was used in England as early as the
eighteenth century to control the King's power of taxation which provided the
revenues and to control governmental expenditures. The budget principles of
supply as well as the use of funds is still fully recognized in modern business
The idea of
government budgeting were brought into United States and carried by English
Immigrants. According to Horngreen and Foster (1987), Budgeting system are more
common in large companies, where formalized techniques often serve
management. Still, small concerns also use budget. All organizations whether incorporated
or unincorporated, public or private, religion or traditional, have some
objectives/or goals which it aims to achieve. The objectives could be the
maximization of profits or rendering of services. The realization of an organization's objective requires the
acquisition and utilization of both human and material resources. To achieve
these objectives, the organization tries to economize resources and change the
course or means of achieving its pre-determined goals. With these resources,
the organization determines the most effective way of achieving its goals.
Goals optimization is achieved only by the properly planned use of available
resources when the different activities are efficiently co-ordinated and the
various decisions are policy oriented or controlled.
Modem religious organizations require the use of
some technique in the formulation and adoption of planned and defined systems
include budgeting variance analysis, and budgetary control. The process of
setting goals or objectives to be achieved in some future time and determining
how these goals are to be reached is described as planning, translating this
planning into religion targets can be described as budgeting in religious
to Terry Lucey (1996) preparing a short term and detailed plan of activities of
an organization and so converting the strategic long term plan into action. The
degree of importance attached to this plan and the efforts made in controlling
the deviation from the planned performance differs among business
organizations. A budget can be defined as a quantitative financial statement
showing estimated incomes and expenditures of an organization for a specified
period of time. It is a predetermined statement of management policy during a
given period which provides a standard for comparison with results actually
process of establishing a budget is known as budgeting while the process of
assigning responsibilities for achievement of the budget, measuring actual
performance and comparing it with the planned performance is known as budgetary
budgetary control is a management function which includes the preparation of
budget and establishing responsibility, comparing actual performance with that
budgeted and acting upon result to achieve the described goal.
purpose of control is to ensure t at operation and performance conforms to
plans. The control aspect of budgetary activities is a management function
which involves taking action on adverse variance that are controlled.
According to Pogue (1989),
budget will control nothing as it is not on itself a control mechanism but a
yardstick by which actual results can be compared as and when they occur and
thus provide management with an aid to control cost. Budgetary control
therefore acts as guard on the executive capacity by controlling their scope of
expenditure. In a religious organization, it helps the budget committee or
church committee to control church expenditure. It aims at realistic approach
to project by management of an organization. Non profit making organization attached much
importance to budgeting. Thus budget is being controlled in each non profit
making organization. Like every other organization the realization of the
budget objective in Non profit making organization depends on the effective
control of management on the budget.
1.2 STATEMENT OF PROBLEM
research work is encouraged to help in highlighting the problems that militate
against the application and effective utilization of budgeting and budgetary
controls of Catholic Church in Delta State Asaba in Particular.
Specifically, the following problems are addressed:
The parish was
unable to accomplish budget goals.
variances between budgeted and actual performance in the parish.
committee members were unable to exercise control on the budget system because
of lack of adequate experience.
formulating master budget at parish level had been a problem and delayed
previous year’s budgets.
was unable to monitor both compliance with and deviation from budget's target.