CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Expenditure control is part of management control process in every organization, both government establishment and private establishment. Expenditure control is defined as the process by which managers use productively and efficiently, the deficit resource in the accomplishment of the organisational goals. Looking at expenditure and control from different perspective. Expenditure is the total amount spent on the process of trying to achieve a specific organisational goal. Control means to order, limit, instruct, or rule something or someone’s actions. It is utilized by either government officials or organisation managers to put a line on wages increase immigrate credit, to mention but a few.
Many researches have conducted researches on the reason companies and organisation lack expenditure control process. A study of the ministry of finance, Enugu state and Innoson group, Enugu; this means a comparative study of non-profit making organisations, since ministry of finance is government owned while innoson group is privately owned as a category of profit making organisation. Non-profit making organisations are known by the following: a) there is neither a conscious profit motive nor an expectation of earning net income. b) No profit of any excess of revenue over expenditure is distributed to those who contributed support through taxes and voluntary donations. In profit making organisations, the reverse of these properties is the case, meaning that their primarygoal is to maximize profit and excess of revenue over expenditure.Government owned establishments pay more attention to services they render to the public, as their primarygoal is to provide services that satisfy. Privately owned establishmentsgo out of their way to render good and quality services to the public, they pay more attention to maximize of profit which is their key objective. Comparative study of expenditure control methods in Government and privately owned establishment which is the mainresearch question in this research work has to do with the different ways and methods by which expenditure is being controlled and managed in each of the establishments so that they will not run into deficit or liquidations. The management control concept which gulps the expenditure control are the same both in profit oriented and non-profit oriented organisations, but the impact of these concepts differ in important respect.
In most developing countries like the Nigerian government involvement in economic activity is usually one of a kind. One major way through which government has interposed in Nigerian economy is through the establishment of public and private enterprises and statutory bodies operating service of an economic or social character in the interest of the government. Since the 1960’s, Nigerian public and private enterprises have attested of a rapid growth unit. Howbeit, after a long period of increase in the economy starts intervention in the Nigeria economy through public, private enterprises, the 1980’s onwards had also attested for a reversed which has sometimes been dramatic in public opinion. This is caused by the continuous losses in enterprises. As a result of this, there has been an urge to carefully look at alternative policy strategies for the accomplishment of economic development. At the foremost part of these strategies is the minimization privatization of public enterprises. In Nigeria today, public enterprises are involved in a complete range of economic activities including agriculture, mining, construction, manufacturing, commerce and services. The division of public enterprises in Nigeria has been sectioned according to the diversities of standard by different authorities. It was discovered that the public service review commission sectioned public sector into; Public utilities Regulatory of service, body Financial institutions, Commercial and industrial enterprises. A firm known as private enterprises when it is founded and managed by an individual or a group of individual;these firms are considered to be registered in the local government from the area they operate. The reason for the institutions of private enterprises is numerous just like establishment of public enterprises. They involve; the provision of employment opportunities generating income for the founder of the enterprises, government interest in profit growth of the enterprises. The interest of general public is mostly in contribution which aids social enlistment which is shown to the environment in which the business is loaded.
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