Problems of budgetary control as management tool for planning and control

Project Abstract

<p> The research on problem of budgetary control as a management tool for planning and control. Its source is mainly concentrated at Asaba capital city of Delta as a result of the lack o implementation of budget and management of budget in the financial industries and organizations. The objective is to identify the cause of poor performance in an organization also to examine the problem of inadequate allocation of resources to meet organizational goals, standard for prediction of past and present budget for future reference. The researcher examines this work by using primary and secondary data, personal interviews and questionnaire, the yaro yemen’s formula (n=N/ 1+n (e)2) was used. In the chapter four, the data was analysed by percentage and the findings were properly discussed. From the findings, he researcher observed that forecasting should be used in predicting the future budget, also lack of management of fund causes inadequate allocation of resources and equal relationship exist within the organization in conclusion. The research recommended that there should be equal relationship within an organization and forecasting should be used in prediction of future budget and finally, management auditors should be called in from time to time to make enquiry in reducing the stress and constrain involved in effective management. <br></p>

Project Overview

<p> </p><p><strong>1.0 &nbsp; &nbsp; INTRODUCTION</strong></p><p><strong>1.1 &nbsp; &nbsp; BACKGROUND OF THE STUDY:</strong></p><p>Fundamentally, management is the coordination of human effort that is art of accomplishment of goods by utilizing the effort of other people. The management process may be varied as the total management effort operating in a particular endeavor that include decision making, the application of selected techniques and producers and the motivation of individual and groups to accomplish specified objective. One of the most important approaches that have been developed for facilitating effective performance of management process is budget and budgetary control. As consequence, the concept has found wide acceptance in recent years in the better managed companies / organizations. A budget, according to Horgen et al (2013:59), as a qualitative expression of a plan of action and, an aid to coordination and implementation.</p><p>Every organization has an implicit and explicit objective, it hopes to achieve in a given period of time such objective is translated into plan through the formulation of policies and selections of programmes in other to check derivation from it, hence most organization normally use budget as an action plan, a budget is therefore a parameter, which measures actual achievement, Budgetary control as sample used to institute control for the plan, this is because budgetary control takes target of desired performance as its standard than systematically collected information relating to actual performance and identifies variance between targets and actual performance. Budgetary control is more than an administrative technique which aims to ensure the managerial function are in fact carried out a well organized and coordinated fashion hence budgetary control apart from being a longer system which involves setting objectives concerning alternative programmes and incorporating them into the formulating authorization and implementation of budget, accounting per and reviewing of findings to check deviation from actual plan in order for corrective measures to be taken on time.</p><p>Budget which is required to achieve different aims within an organization starts with the setting out of the objective of the organization by the management for the budgeted year according to government fiscal and monetary policies, guidelines and the approval of the management centered in carrying out the plans which are contained in each budget.</p><p>In conclusion, for management to provide adequate control over the budget of an organization, it could coordinate all the collaborated responsible parties in achieving the actual result with the budget to establish the variance, hence budget is therefore a primary tools for planning while the process of budgetary control is both planning and control device.</p><p><strong>1.2 &nbsp; &nbsp; </strong><strong>STATEMENT OF THE PROBLEM</strong></p><p>The main focus of the problem is based on problem of poor performance in an organization due to lack of effective and efficient budgets and budgetary control system.</p><p>Also problem of inadequate allocation of resources to meet organizational goals and maximize performance.</p><p>Further more studies on problem of reflecting data of the past and present and how to enable predictions and forecasts to be made out in the future.</p><p>The study also term to discover how banking industries in Nigeria can make use of prepared budget to achieve efficient result.</p><p>Also, looking into numerous pressures in the job may impose constraints upon managers which affect the qualities of information they collected in the organization.</p><p><strong>1.3 &nbsp; &nbsp; PURPOSE OF THE STUDY</strong></p><p>The purpose of this study is to know how budget and budgetary control serve as a managerial tool for planning and controlling specifically, the study aimed at achieving the following objective:</p><ul><li>To identify the case of poor performance in an organization.</li><li>To examine the problem of inadequate allocation of resources to meet organizational goals.</li><li>To provide standard on the past and present budgets in forecasting and predicting the future.</li><li>To identify how prepared budget can be used in achieving efficient result.</li><li>To under stand numerous pressure in job contraries on managers in budget preparation.</li></ul><p><strong>1.4 &nbsp; &nbsp; RESEARCH QUESTION</strong></p><p>* &nbsp; &nbsp; &nbsp; What relationship exists between budgetary control and organizational performance?</p><p>* &nbsp; &nbsp; &nbsp; What are the cause of inadequate allocation of resources in an organization?</p><p>* &nbsp; &nbsp; &nbsp; How can an organization use past and present budget in predicting the future?</p><p>* &nbsp; &nbsp; &nbsp; Does prepared budget has any impact in achieving organizational goals / result?</p><p>* &nbsp; &nbsp; &nbsp; Does numerous pressure in job constrain on managers affect budget preparations?</p><p><strong>1.5 &nbsp; &nbsp; SIGNIFICANCE OF THE STUDY</strong></p><p>The addition of knowledge is basically the aim of every research and this research work seeks to achieve more importantly, this research is necessary in understanding how the budgetary control affect organizational performance.</p><p>Also it is a tool which measures managerial performance of an organization in bring solution in allocation of resources and promote good morale and harmony in the organization.</p><p>The research apart from explaining the concept of budget and budgetary control looks into the comparison between the past and present budget in future prediction.</p><p>It will contribute immensely to the existing knowledge on the concept on how banking industry in Nigeria can part take in budget preparation in Nigeria in order to achieve an organizational goal.</p><p>In conclusion, numerous pressure that are mounted in job constrain to manager are reduced and more measures are taken in dressing the issues.</p><p><strong>1.6 &nbsp; &nbsp; SCOPE OF THE STUDY</strong></p><p>Element of a successful budget plan the success of the budgetary process in an organization depends on the following essential element on accurate forecasting of business activities and communicating the budget acceptance and cooperation reasonable flexibility. All in reference on first Bank Nigeria Plc Asaba Delta State.</p><p><strong>1.7 &nbsp; &nbsp; DEFINITION OF TERMS</strong></p><p>Budget: Budget is a plan that is usually expressed in monetary terms approved before the period of use and it usually covers one year.</p><p>Budgetary control: According to the chartered institute of management accountants (CIMA) Budgetary control is the establishment of budget relating to responsibilities of executive to the requirements of a policy and the continuous comparison of actual with budgeted results, either to secure by individual action of the objective of that policy or provided a basis for its revision.</p><p>Savings: This is an account opened by individuals who wants to save small account of regular basis and income after expenditure / expenses.</p><p>Current Expenditure: Is the expenditure that are repealed yearly, example salary of cookers, road repairs and other similar expenditure of reoccurring nature.</p><p>Capital Expenditure: This is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life extending beyond the taxable year. In the national budget is the expenditure of permanent nature, the expenses are on project that will last for more years example school, roads, hospitals bridges etc.</p><p>Investment: Is an acquiring in share, stock debenture of other companies, investment can be acquired by an individual on company by or investing other company.</p><p>Budget Balance: This means that planned government expenditure is equal to estimated government revenue.</p><p>Budget surplus: This means that proposed government expenditure is less than the estimated government revenue during a financial year.</p><p>Budget Deficit: It means that government planned expenditure is greater than its estimated revenue for one year.</p><p>Planning: This is the process of thinking about and organizing the activities required to achieve on objective. A process of making arrangements for in advance.</p> <br><p></p>