BUDGET AND BUDGETARY CONTROL AS A TOOL IN MANAGEMENT DECISION (A CASE STUDY OF NIGERIA EDUCATION RESEARCH AND DEVELOPMENT COUNCIL (NERDC)
This present day role of an organisation is to ensure that its resources are used in an effective and efficient manner so as to derive its original set targets by adhering to some specific guidelines. This study therefore focuses alteration in the maintenance of budget and budgetary control relation to organisation achievement. For easy identification of the underlying concept of this write up, the project introduce the background of the study, which gives an insight into what the research is all about. It also discussed how the budget information could help the top executive of the organisation in the area of planning, controlling and decision making which of constitutes their basic functions in the running of the organisation. This provides the subordinates with clear view of what objectives of the organisation are, there by Harmonizing the efforts, of all forward achieving this. It further explains the characteristic of the budget and the various approaches to budgeting so as to give befitting round for peculiar circumstances.
TABLE OF CONTENTS
1.1 Background of the Study
1.2 Statements of the Problem
1.3. Objective of the Study
1.4 Significance of the Study
1.5 Scope of the Study
1.6 Statement of Hypothesis
1.7 Definition f Terms
2.1 Definition of Budget and Budgetary Control
2.2 Goals Achievement/ Management by Objective
2.3 Budget And Budgetary Control as a tool for Achievement
2.4 Aim and Objective of the Budget and Budgetary Control
2.5 Features of Budget and Budgetary Control
2.6 Types of Budget
2.7 Approaches to Budgeting
2.8 Budget Administration
2.9 Budget And Budgetary Control In Nigeria
Education Research and Development Council
3.1 Sources of Data
3.2 Data Collection
3.3 Sampling Size
3.4 Sampling Techniques
3.5 Statistical Tool
CHAPTER FOUR: Data Presentation and Analysis
4.1 Data Presentation Analysis
4.2 Test of Hypothesis
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1.1 BACKGROUND OF THE STUDY
All forms of modern organisation large and small, public and private undertake at least in some informal manner, in order to ascertain their stated goal or corporate objectives.
Budget is the financial statement or quantitative statement, prepared and approved prior to defined prior of time, of the policy to be pursed during that period for the purpose of attaining a given objective. According to (Trevoe motion page 101 of 1986), says budgets are concerned with planning and control. Planning involved drawing up a comprehensive and properly co – ordinate plan for the whole organization. Thus, each department head or managers will be presented with a budget as a guide. By checking actual performance and of is difference are emphasized, and it is this very feature identifying the questions to be asked and fixing responsibility for answering them is the essence of the budget and subsequent control.
1.2 STATEMENTS OF THE PROBLEM
In spite of the fact that budgets are maintained by organisation year in year out, it’s featured by general feature, though sometimes success is recorded. It therefore signifies defects or problems. This research will enumerate the problems as follows:
i. LACK OF FLECIBILITY: - The avenue for flexibility budget in order to meet up with unexpected situation. Some budgets are prepared without adequate flexibility to all unexpected situation which may arise during the recurrency of the budget. They are fixed and tight that they become an end in themselves, rather than a means to an end, there by running into unnecessary cost.
ii. RESISTANCE TO CONTROL:- According to (Ibitoye Page 7 - 8 of 1985), have his opinion that some managers regard budgeting control as unnecessary restrictive and an indirect ways of curtailing their authority, rather than seeing budget as a means of improving performance and achieving objectives. They regard budgeting as a means of hunting exercise.
iii. INABILITY TO FORECAST RELIABLE ESTIMATES:- Are those estimates being forecasted fairly reliable?
(in the book of Oshisomi and Dean, financial management in Nigeria public sector page 77 of 1984), asserted as the estimate committee was not equipped to handle the job of budget examination because its members did not have in dept knowledge of the programme under review as a result, the committee become requiring some what obituary costs, and padding their budget in anticipation of such cost.
1.3. OBJECTIVE OF THE STUDY
In organization, most managers have well defined the thoughts about what they want to accomplish and when they want to accomplish. Even though such organisation may ascertain a certain degree of success without budgets, they attain the bights and that could have been reach; an effectiveness of a control budget is measured solely by the result its produces, not by any relation to data it attempt to find from the filed, how effective a good or success of financial plans or otherwise. In addition to this, and in pursuant of finding solution to the problems raised in the preceding section 1.2, the researcher intends to co – ordinate relevant variable in a concise comprehensive study which concluded as “manager should have at their disposal, analysis that will allow reasonable accurate prediction of the affect a change in any of these factors would have an the profit picture, to control the performance where is profitable as they should have been.
The research will look into the area of budget in the organisation to bring to height, the elements involved in the success of otherwise of it towards enhancing efficiency in operations.
1.4 SIGNIFICANCE OF THE STUDY
This section of the research will highlights on areas of success and otherwise in relations to maintenance of a formalized budgetary system aimed by improving general performance. It will be base on three (3) prospective to the organizations, the researchers and the general public.
i. TO THE ORGANISATION:- In section 1.3 above, this avenue given the motive aims to the organization, the effective planning charts the course of the organisation towards its goal or objectives. Budget is a great reduction that requires managers to give it priority among their duties more over budgeting provides management with a vehicle for communicating their plans in an orderly ways research will also highlight that control is to be considered as one amongst many tools in an overall planning as observed by (Brion 1985page 104) budgeting control should be just one of the techniques used by management in planning all strategy control and development or organisation. “it is significant for the organisation to consider this and therefore implore other tools in addition to budgetary control.
ii TO THE RESEARCH:- A study like this reveals to the researchers the degree of importance needed to keep of budget of expenditure. It also provide with an ample opportunity of first hand information on having budget by the organisation.
iii. TO THE GENERAL PUBLIC:- This serves to the general public as a reference material on budgetary control.
1.5 SCOPE OF THE STUDY
As pointed out earlier, budgetary is undertaken by many organizations. It will rather concentrate on budget and budgetary control as maintained by Nigeria educational research and development council (NERDC) Suleja Abuja.
The study will take place in the budget revenue and the investment division of the finance and account department of Nigeria Education research and development council, Suleja Abuja will cover the selected staff of the said division.
1.6 STATEMENT OF HYPOTHESIS
In order to find solution to the problem stated 1.2 above, hypothesis have been formulated based on the researcher observation.
The hypothesis formulated is as follows:
i. Ho: Maintenance of budget does not lead to a goal achievement
Hi: Maintenance of budget leads to a goal achievement
ii. Ho: Budgetary policy has no effect on domestic organisation.
Hi: Budgetary policy has effect on domestic organisation.
iii. Ho: Budget is on more effective in promoting corporate
Hi: Budget is more effective in promoting corporate
1.7 DEFINITION OF TERMS
To make this research work easy for reader, the research has decided to define some of the terms that are contained in the research topic.
PLANNING:- This is the act of making plans for something.
FORECASTING:- Logical estimate of the future based upon a time understanding of pasts trends events.
VARIANCE:- This is the net different (Surplus or difficult) between the budget estimate against the actual performance in the control procedure.
EXPENDITURE:- This the amount of cash committed or expended.
BUDGET CENTRE:- A section can organization for which separate budgets can be prepared, controlled and exercised.