Background of the study
Budgeting is essentially concerned with planning. According to
Hausen .O. (1990). Dr. Jones discovered, failure of plan, either
formally or informally, can lead to financial disaster. Careful
planning is vital to the health of any organization. If that is the
case, what role does budgeting play in planning and control? Simply
put, plans identify objectives and action needed to achieve them.
Budgets are the actions needed to achieve them. Budgets are the
quantitative expression of these plans. States in either physical or
financial terms or both. Thus a budget is a method for translating
terms. As a plan of action budgets can be used to control by comparing
actual outcome as they happen with the planned outcomes.
Furthermore, according to Professor Anya O. Anya April 28th 2006,
guarding newspaper, the universities and the challenge of a knowledge
is based on the economy (2) the said “we have seen that economic and
human development indices presently confirm that Nigeria is a very poor
country where otherwise immense resources and potentials have not been
realized as a result squander and poor management.
We have dedicated from the above points that planning budgeting
and control is very essential in all sphere of endeavor be it public or
private sectors. In other words, the necessary uncertainty and
complexity in the socio-political economic and public sectors of
Nigeria society have been made it very difficult for co-operate
entities irrespective of the nature of their business (profit oriented
or service oriented) coupled with the changes in social, economic,
technological and political system to achieve optimal result without
setting proper planned targets. With the trend of failure recently
witnessed in the financial sector, arising from factors both internal
external organizations and their management should ensure that they had
decision about their future.
The concept of economic scarcity of resources implies that
economic units including tertiary institutions, parastatals etc. must
stick to action satisfaction. There may be no reason for government to
establishment which the management are no strived to achieve viability
for optimal result such establishments should be deliberately abandoned
in order to pave way for release for the pursuit of other more
economically viable investments.
We should realize that abandonment is a key to innovation but
because, it frees the necessary measures and also it stimulates the
search for the new ones that will replace the old ones.
However, it is for the sake of avoiding such abandonment that the
researcher wanted to find out the impact of budget and budgetary
control as technique to managing the business dynamics to evolve long
term survival strategies of tertiary institutions.
1.1 STATEMENT OF THE PROBLEM
According to Cohn Drury .A. (1987). He stated that the actions
that follow managerial decisions normally involve several aspects of
the business. When the fail to do this, have is a danger that managers
may make decision that they believe are in the best interest of the
organization when in fact best interest of the organization when in
fact taken together, they are not.
Tertiary institution is a non-profit making organization in most
cases pays little or no attention towards the achievement of any set
goal. Give to the fact that they not for profit making purposes, for
proper, planning, budgeting and effective control system become an
illusion. This has resulted into financial crisis which culminated into
inadequate provision of learning infrastructural facilities, delayed /
non-payment of salaries, strike actions and lack of commitment to work
among staff members.
These institutions also cannot make—up even with the subventions
given to them by the government. This has been attributed to various
factors prominent among which is the ineffectiveness of budget and
budgetary control system in these institutions.
This research work is therefore designed to ascertain the impact
of the budget and budgetary control in tertiary institutions through a
case study of Imo state university.
1.2 SIGNIFICANCE OF THE STUDY
Budget and budgetary control is a tool for management control. As
with any other aspect of management, the budget process and budgetary
control may or may prove successful in assisting government or
individuals to achieve its goals. The use of budget is not a cure all
for all organizational problems. It is the purpose of this research
work to address the following:
- To avail the application of budget and budgetary control as a management technique in tertiary institution
- To determine the extent to which ill-defined goal would be a conduit pipe for siphoning government resources
- To find out whether budget and budgetary control serve as a control mechanism
- To find out what it takes for budgetary to be effective in management in tertiary institution
- To determine the extent to which budgetary provides.
1.3 OBJECTIVES OF THE STUDY
Budget and budgetary control, is intended to serve the management
as a constant reminder of the plan they have adopted. As such, it
provides a blue print they can consult from time to time as they work
to implement the sense, it serves as a set of general instructions of
the department / management and divisional management reflecting them
the actions they have agreed to take and to results they have agreed to
strive for. In summary of the following, budget and budgetary control
has the below mentioned objective:
- To examine the benefit of budgeting in the management of tertiary institutions.
- To know the level of implementation of budgeting in the administration of tertiary institutions
- To identify the challenges of budget implementation in tertiary institutions.
1.5 SCOPE OF THE STUDY
This work will be carried out through the study of impact of
budget and budgeting control in tertiary institution, university of
uyo. Furthermore, the research will make use of the school library and
also visit mar by institution. The scope of budget and budgetary
control is very diverse and broad. Any budget
which enables an organization to be conducted more efficiently is
regarded as budget and budgetary control. Budget is also psychological
device to obtain the result or the fix the responsibility and
constantly keep conscious check on the level of performance which
co-ordinates all the achievement of the tertiary institution.
1.6. Limitations of the study
Financial constraint- Insufficient
fund tends to impede the efficiency of the researcher in sourcing for
the relevant materials, literature or information and in the process of
data collection (internet, questionnaire and interview).
Time constraint- The researcher will
simultaneously engage in this study with other academic work. This
consequently will cut down on the time devoted for the research work.
1.7 Research Questions
He following research question have been formulated to act as a
framework for this study, so as to enable the researchers find out the
impact of budget and budgeting control in the performance of tertiary
- Does budget and budgeting control serve as a control mechanism?
- Does budgeting require active participation and management commitment?
- Does budgeting provide basis for comparison and enhancement of performance?
- Does budgeting significantly influence institutions management?
1.8. Research Hypothesis
H0: Budgeting does not significantly influence tertiary institutions management.
H1: Budgeting significantly influence tertiary institutions management.
1.8 Definition of Terms
Goal congruence: This means that, the
aims and objectives of all the workers in an organization should be
focus towards achieving the aims and objectives of the organization.
Tertiary institution: The tertiary institution includes all federal and state government owned universities, polytechnic and colleges of education.
Managerial effort: This is the physical and
mental exertion made by mangers towards set goals, managerial function
like planning, organizing, supervision, co-coordinating etc. these
tools and techniques are applied by managers of organization both
private and public on managerial effort to solve their business decision
Responsibility accounting: This is
based on the recognition of individual areas of responsibility as
specified in a firms structure. This implied that cost and revenue are
controlled as applicable by using responsibility accounting.
Management: This is also a series of activities
that a firm engages it managers to guide, plans and equally handle
responsibilities and changes that will be ahead.
Budget: A budget can be defined as a quantitative
expression of the operational plans for an organization for a future
Budgetary Control: It has been severally defined.
J. Batty says “budgetary control in its complete form involves a
predetermined plan in financial terms, to cover all phase of business
activities and the operation of that plan in such a way that
anticipated profit is, as near as possible, achieved.