The Project File Details
This research work is aimed at examining the use of budgeting and other form of fiscal discipline, that is taxation and other forms of government spending or expenditure in public corporations or parastatals. Data are collected through primary and secondary sources outfow of government funds.
Usually the procedure for raising and expending funds in the public corporation go through stages. The statistical tools used in the analysis of data include the simple percentage, weighted ranking techniques and chi-square test.
The findings of the research are that the major types of budget used are capital and recurrent budgets, fixed and flexible budgets, budgetary of planning, control and as a standard for performance measurement/evaluation. The finding shows that there is a positive relationship between budget estimates and actual expenditures.
Table of Contents
1.1 Background of Study
1.2 Problem Analysis
1.3 Research Objectives
1.4 Research Hypothesis for the Study
1.5 Scope of the Study
1.6 Relevance and Significance of the Study
CHAPTER TWO: LITERATURE REVIEW
2.1 Types of Budgeting
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 The Research Design
to Research Question
CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
1.1 BACKGROUND OF STUDY
Organizations are usually established with the aim of achieving certain goals or objectives. Most times, those in private sector of the economy are guided by the aim of maximizing profits and minimizing cost. The government organizations are for good towards achieving goals/ objectives as the provision of the necessary social, political and economic infrastructures for the general well being of its citizens.
Prior to the establishment of most of these organizations, intended goals and objectives are care fully planned as well as finance is been made by the authorized agencies, plans are executed and policies are implemented. Usually all of these are executed in an organized and control manner.
Thus, it becomes imperative that all government and non-governmental agencies should plan, control, organize, direct and implement their policies toward achieving desired goals and objectives. It is the basis that determines the success or otherwise of most firms.
As defined by Lucey (2004), budget is the expression or quantitative representative of the entire plan of action of an organization, as shown or represented in monetary terms. Stated otherwise, it is a thorough and detailed presentation of the entire plans of an organization and the set goals of such in a monetary or quantitative form.
Again as argued by Prof. Nathan Jones of the school of business in the University of Michigan It is a detailed financial statement that is prepared and approved by the authorized alms of government for a given or definite period of time. If the policies to be pursued within the period for the purpose of attaining specific goals or objectives”.
Basically in the iteming of goals and objectives there should be a corresponding display of the source and intended expenditure of funds that will be needed in pursuing these goals. In the display of most budgetary outlooks it is a fitting companion that is the source areas of needed expenditure authorization and other forms of control mechanism are embedded.
On the other hand, the execution or implementation of a budget or budgetary plans of action is known as budgeting. It was defined by Prof. Anao, in the journal of management (2002) as the implementation of budgetary plans as a budget”.
Here, much control is embedded and as constant review of policies and results are carried an in order to ensure compliance with intended results.
In the public or government sector of the economy, divergent interests are represented. Businessmen, students, politicians etc. are usually allowed to express opinions as regarding government policies based on the past, present and future revenue source and expeditions theory. This will show a detailed assessment of the benefit and cost of alternative uses of funds.
Budgets are usually prepared by the executive arm of governments and then submitted to the legislative arms for proper scrutiny debate and if agued upon, passing into law or asserted unto by the commander-in-chief before it becomes law and then authorization for spending issued.
It is a well recognized and acceptable fact that all enterprise, be it privately funded or publicly managed should be managed effectively and efficiently. All management irrespective of sector is adjudged efficient if it is able to accomplish the set objectives of an enterprise or firm with minimum cost and effect. Achieving this desires monitoring operations planning and comparing actual results with planned or budgeted result / outcomes.
All of these acts of imbibing control mechanisms in achieving goals and objectives are known as budgetary control system.
Budgetary control is argued for in order to ensure the appropriate co-ordination of scarce resources in achieving profitability.
Among the other forms of fiscal policies that may be used by the government in regulation and attaining goals and objectives is taxation and some firms of internal controls.
According to Prof. Nduka (2006), of the University of Nigeria (NSUKA), budgetary control system is a system where set plans or goals of an organization is monitored and options are taken to review performance and to review goals that have become unrealistic.
Reviewing performance and comparing outcomes with budgeted ceiling necessary.
To ensure attainment of goals, limits should be set to which a firm confirms and acknowledge acceptable operating performances. These limit together with expected results are shown in the master budget of the firm and actual outcomes compared with expected results as the year progresses without budget such comparisms would be impossible and a firm (government or not) might find that it’s cost exceeded acceptable level.
As a way of lending a professional voice, the need for budgeting and fiscal control in expending funds in an organization the Institute of Certified Accountant of Nigeria (ICAN). The provision in 1997 is clearly stated in following manners:
The budgeting process serves several purposes which includes the fact that it provides a financial blue point that enable managers to project the outcome and adjust strategies where needed before operations begins, thus avoiding error.
Also, the budgeting process forces the managers to re-examine past performance, which may enable them to discover and correct inefficient and outmoded planning methods and operations.
Thirdly, budget enables manager to implement the planning and control functions. Some government organization see the preparation of formal budgets as time consuming and expensive, but the cost of not budgeting may be for greater and may ultimately lead to the company’s failure. The planning process of an enterprise would involve four fundamental processes:
1.2 PROBLEM ANALYSIS
Budgeting and fiscal discipline over the years, has since colonial era been used to control government expenditure but the application has not been filling effective in government administration. Budgeting and its application has not been effecting co-ordinated because, the money projected sometimes has not been accomplished or not have been used as it is required.
Problem that are associated with this budgetary system and the fiscal discipline includes:
Those questions which need to be addressed is traceable to the type or caliber of people handling the budgetary processes and on what basis are real sources of these finances used in achieving budgetary allocation.
1.3 RESEARCH OBJECTIVES
The main objectives of this study are synonymous with the research work/topic. It is to ascertain how the adoption and implementation of budgetary system and fiscal discipline apply in government ministries and parastatals in achieving goals.
1.4 RESEARCH HYPOTHESIS FOR THE STUDY
As defined by Dr. Ezeocha (2006), of the University of Ilorin, Hypotheses are tentative statement of fact
Otherwise stated, they are to be held and assumed not to be truth, until proven to be. In the course of this research work, the following hypothesis will be trusted.
H0: Budgeting help in effective planning, controlling and management of the financial activities of government ministries.
H1: Budgeting does not help in the effective planning, controlling and management of the financial activities of government ministries.
H0: Effective performance evaluation and review is sustained and encouraged as result of budgeting.
H1: Effective performance evaluation and review is not sustained and encouraged as a result of budgeting.
H0: In the long run, there is a positive relationship between budgeted estimates and the actual estimates.
H1: In long run, there is no positive relationship between budgeted estimates and the actual estimates.
1.5 SCOPE OF THE STUDY
This study is aimed at assessing the budgetary system and fiscal discipline measure/control as a tool of instrument of achieving government policies and objectives in some selected government ministries and parastatals. In the course of this study, the researcher intends to look at the importance of budgeting and fiscal discipline and other factors that can improve the economic and social performance in government ministries. Attention must be focuses on the fixed flexible budgets, incremental budgets, zero based budgets, production and administrative budgets, sales budget, master budget, partial and which budget e.t.c.
Consequently, the scope will encompass the following:
1.6 RELEVANCE AND SIGNIFICANCE OF THE STUDY
The importance of this study cannot be overemphasized. It is the opinion of the researcher that this study will be beneficial to the following: