ABSTRACT
This research work will be A very crucial study for non- – profit
making organization in Nigeria. The role of non – profit making
organization in any economy is indispensable. To give this effort proper
direction, it is identifiable that the key ingredient in translating
this dream into reality is to bring about a clearer understanding of the
need for an effective and efficient budgetary control in a non – profit
making organization. The research will be carried out through series of
oral interviews and distribution of questionnaire in collection of data
and relevant information to the employees of national cereals research
institute Badegi. The data collection will be analyzed as well as
interpreted by there researcher from the testing and proofing of
hypothesis. The researcher will be faced with the following
constraints:
- Insufficient time
- Poor response from the employees
- Insufficient money
inorder
for the company to achieve their objectives the researcher will
recommend that there should be budgetary control so that works will be
aware of the objective of the organization and sud- ordinates opinion
considered in the preparation of the company’s budget estimate.
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
1.5 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.
1.6.1 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
Many libraries visited offered little help as regard text books for the project.
POOR RESPONSE FROM THE EMPLOYEES
The employees are unable to disclose some information about the company which made some difficulty in writing the research work.
1.8 DEFINITION OF TERMS
Actual Performance – Is the real facts on how well or badly the targeted objective was achieved.
Budget – Is a statement showing how money will be spent over a period of time.
Critical – Expressing disapproval on the expected performance.
Efficacy – The ability to produce
Effectiveness – Ability to produce the intended or actual result being
efficacious and efficient.
Evaluation – Finding out or stating the value of something.
Forecast - To budget in advance what is likely to happen
HO - Null hypothesis
H1 - Alternative hypothesis Alternative hypothesis is what the researcher
thinks
most of the respondent will agree with in relation to the research
problem or the true description of the phenomena. Null hypothesis is not
and the opposite.
Hallmark – Mark to indicate standard.
Inducing – Persuade, bring in labour
Planning – Is the act or process of intending to achieve an objective in advance.
Variance – Is the amount which brings difference between the actual and the budgeted.