CHAPTER ONE
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-ordinated 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 forecast
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 lucey, (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.
The growth of the business hinges, or better put, rests squarely units
budgetary control system or techniques hence they are considered as a 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.
The primary purpose of this study is four fold. They include the
following:
H1: Budgeting and budgetary control affect the quantity of
services delivery in government parastatals.
H1: Budgeting and budgetary control contribute to the improvement of the management efficiency and high productivity.
H1: Budgeting and budgetary control is used for assessing manager’s budget.
H1: There is connection between the type of budget implemented and actual performance.
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 fact
in undertaking this study. The availability time and short period of the study made it difficult for the researcher to carryout 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.
THE 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.
Accounting/ Audit/ Finance Jobs
Administration/ Office/ Operations Jobs
Advertising/ Social Media Jobs
Copyright © 2024 All Right Reserved CVClue
A Subsidiary of EMINENT INFO TECH VENTURES