University of Nigeria
Research Publications NKWONTA, Nkechi C.
Aut
hor
PG/MBA/97/20744
Title
Government Budget and Budgetary Control System(a Case Study of Ministry of Finance and Economic Planning Awka,
Anambra State)
Facu
lty
Business Administration
D
epar
tmen
t
Management
Dat
e
February, 1999
Sign
atur
e
Government budge t and budge t n r y c o n t r o l
sys t em ( c a s e s t u d y o f Ministry of F i n a n c e
and Economic P l a n n i n g Awka, hnsxbra s t a t e )
Nkwonta Nkechi C.
PG/MD~/97/20744
lJepartmcn.t of Management;
F a c u l t y o f B u s i n e s s A d m i n i s t r a t i o n
U n i v e r s i t y of N i g e r i a
Enugu Campus
February , 1999
T I T L E I' A G E .
Government Budge t and budge ta ry ? o n t r o l sy:i t ~ m .
Case s t u d y of t h e M i n i s t r y of F i n a n c e and Econorni.~
P lannin l ; Awka , Anambra S t a t e .
~ k w o n t a ' Nkechi C. a p o s t g r a d u a t e s tudent ; i n t h e
d e p a r t m e n t of Management w i t h r ~ c i s t r a t i o n number
P ~ / ~ B ~ / 9 7 / 2 0 7 / 1 4 h a s s a t i s f a e t o r j l y cornpl e t e d t h e
r e q u i r e m e n t f o r t h e c o u r s e and r e s ea r ch f o r M a s t e r s
i n % s i n e s s A d m i n i s t r a t i o n (MBA).
T h i s d i s s e r t a t i o n i s an en~lorii .n~ent o f o r i g i n a l
work and hljs n o t been nubml t t :e i1 i n par t : or f u l l
f o r any o - t h e r d e g r e e of this U n i v e r s i t y .
(Head o f ~ e p a r t m e n t )
I d e d i c a t e t h i s work t o m y wonderful. h u s b a n d
Engr. V. Nkwonta and my two l o v e l y c h i l d r e n
Odinaka and Lotachukwu Nkwonta and above a l l t o
God a l m i g h t y who makes a l l t h i n g s p o s s i b l e .
I w i s h t o e x p r e s s my p r o f o u n d g r a t i t u d e t o my p r o j e c t
s u p e r v i s o r P r o f . Agwu Akpala who gave h i s t i m e a n 3
a d v i c e s e l f l e s s l y .
My s p e c i a l t h a n k s g o t o my husband Engr. V. 6.
Nkwonta f o r h i s c o n t i n o u s a t t e n t i o n , f i n a n c i a l l y ,
m o r a l l y and o t h t ~ r w i se.
F i n a l l y I e x p r e s s my g r 7 t i t u d e t o t h e t y p i s t who
h e l p e d i n g e t t i n g t h i s work t y p e d on t i m e , and most
o f a l l t o t h e Almighty Cod who makes t h e i m p o s s i b l e
t o be p o s s i b l e and by whose mercy and g r a c e 1 was
a b l e t o c o m p l e t e t h i s programme.
1 TABLE OF' CONTENT *...
. * .
1 ~ ~ ~ d ~ 6 t i ~ ~ : --------------------'-------
St a teuent of t h e Problem: .--------------- 1 Pur9osel of tkAe study: .................... I
Ob j e c t i y e s of the study:----------"-------
B u d g e t = ~ Control: ...................... buddetqry Control Process:--------------- .. budget; &ry Analysis :----------------------
E s s e n t i a l s of Budget pre~,aration:--------
Forecas t s and budgets coqared:----------
m a g e t .P lann ing and Implementatioq for k;iiec L i v e revenue generat ion :------------
PAGE i
ii
2.6 Government Accoun t ing and B u d g e t a r y Cont ro l - - - 2 8
2.6.1 The compos i t i .on of t h e B u d ~ e t : --------------- 29
2.6.2 Budget Implementation: ....................... 31
2.6.3 ~ u 6 ~ e - t f o r E f f e c t i v e Revenue gene ra t ion - - - - - - - 32
2.7 Management C o n t r o l i n P u b l i c S e c t o r : --------- 33
2 . 8 Summary o f L i t e r a t u r e Review: ---------------- 40
CHAPTFR FOUR
4.0 P r e s e n t a t i o n , A n a l y s i s and i n t e r p r e t a t i o n
5.0 ' Summary of f i n d i n g s , Recommendations and
I
A n a t i o n s f budget i s un economic i n s t rumen t of government . # . C
.rt p.L:tnxling f o r and c o n t r o l l i n g revapue accru ing t o and expen-
l i tu re emburked upon b j t h e execu t ive a i m of Government. The
ind comparisons between y l a u s and irnp.lementation. The succes s
)r Y ~ i l u r e of a budget is a f e t ~ t u r e of the r e l d A o n s t i p between
iru;llementation and p lans . Yhe c l o s e r t o y l e n s t h a t implementat&
ion succeeds i n beine;, tLe more s u c c e s s f u l a budget m q y deem t o
Large budget d e f i c i t s i n d i c a t e poor contirol and may be due *
t o d i r e c t r e s u l t of' poor ylannint;: and inadequti te budget
ioipl.eueutation procedures .
budget p l ann ing and e f f e c t i v e inkylementation ctln be a
viLa1 t o o l f o r revenue genera t ion . The acce ; ) t ab i l i t y of t h e
ag3roved budaets by o r g m i s a t ; i o n s make t h e m t o work towards t h e
acllievement; of t h e d e s i r e d pol.icy o b j e c t i v e w i th in ava i l t ib le
c o r i s ~ r a i n t s .
As a ruoni twing umeusure, t l ~ c r c dlould be r e g u l a r aud t imely
?.'r>t.;sration and submi.ssj.on of monthly budget r e p o r t s t o r e l e v a n t
au t t - lo r i t i es . Y t e ruontk~ly r e p o r t s should us a m a t t e r of
imy)or tmce f ipnc i fy R ~ ~ F J R wi t -k * t ' ~ t v o u ? ; ~ ~ b l o nnd adverso vc lr i t~r~cos
a s wel l a s r ea sons f o r t h e var iances . Th is management i n f o m a t -
ion ;)recess w i l l no doubt a s s i s t t h e r e l e g m t t i u t b o r i t i e s i n
t a k i n g t imely remedial a c t i o n s wi th a view t o ach iev ing t h o
d e s i r e d o b j e c t i v e s .
CHAPTER ONE
INTKODUCTI ON :
The management and c o n t r o l of p u b l i c e x p e n d i t u r e h a s been
a c o n s i s t e n t concern of t h e M i l i t a r y Government of N i g e r i a
s i n c e t h e Economic c r i s e s and t h e IMF l o a n of t h e mid 80s.
The need f o r r e s t r a i n t i n p u b l i c e x p e n d i t u r e i s now p a r t of
t h e economic c o n v e n t i o n a l wisdom of t h e day. According t o
P rof . Sam Aluko i n h i s p a p e r on Budget p l a n n i n g and implementa-
t i o n , t h e concep t of Budget p l a n n i n g i s a s o l d a s man. I n
H i s t o r y , we l e a r n t t h a t t h e e a r l y man h a s t o d e t e r m i n e whatever
he needed i n advance b e f o r e i t e v e n t u a l l y m a t e r i a l i s e d . T h i s
i s v e r y obvious i n t h e p r e s e n t days i n t h e l i v e s of i n d i v i d u a l s ,
a s t a t e o r a n a t i o n . A s a n a t i o n , p l a n s a r e ahead i n terms
of r evenue and e x p e n d i t u r e w i t h i n a s p e c i f i e d p e r i o d o f t i m e ,
s o an i n d i v i d u a l o r a s t a t e c o n c e p t u a l i s e s a n t i c i p a t e d revenue
and d i s b u r s e m e n t s w i t h i n a s p e c i f i e d p e r i o f of time.
Every e s t a b l i s h m e n t , be i t p u b l i c o r p r i v a t e f i n d s i t
n e c e s s a r y t o p r e p a r e budget and i n s t i t u t e budge ta ry c o n t r o l
f o r t h e purpose of t r a n s l a t i n g p o l i c i e s , c o - o r d i n a t i n g
a c t i v i t i e s a s w e l l a s f i n a n c i a l c o n t r o l s i n o r d e r t o a c h i e v e
t h e b e s t p o s s i b l e r e s u l t s .
Sound f i m a n c i a l management i s p r e s e n t e d by t h e M i l i t a r y
Government a s a n e s s e n t i a l e lement o f i t s economic s t r a t e g y .
The t h e o r e t i c a l b a s i s of t h e f i n a n c i a l s t r a t e g y i s a conglome-
r a t i o n of t h r e e a s p e c t s o f economic theory :
i.
ii.
Economic l i b e r a l i s a t i o n which a r g u e s from f i r s t
p r i n c i p l e s , t h e markers p r o v i d e t h e b e s t mechanisms
f o r i n d i v i d u a l s t o maximise t h e i r w e l f a r e .
Monetarism which a r g u e s t h a t government c o n t r o l of t h e
money supp ly i s t h e key t o t h e c o n t r o l of i n f l a t i o n .
iii. P u b l i c c h o i c e which a p p l i e s economic concep t s t o t h e
f u n c t i o n i n g o f democracy and bureaucracy.
The f i r s t two e lements a r e f a i r l y wide ly unders tood.
P u b l i c c h o i c e t h e o r y i s less w e l l known. B a s i c a l l y , i t
deve lops a p o s i t i v e model of p r o t o c o l and bureaucracy by
d e d u c t i o n th rough a b s t r a c t i o n from t h e g e n e r a l i t y of human
b e h a v i o u r , based on t h e assumption of n a t i o n a l ( t h a t i s
s e l f i n t e r e s t ) behaviour . Normally, c a v e a t s would be made
abou t t h e l i m i t a t i o n s o f such approaches. Thus t h e c a s e i s
t r e a t e d a s made and arguments f o r r e d u c i n g government
spend ing , t a x a t i o n and borrowing w h i l s t i n c r e a s i n g e f f i c i e n c y
i n t h e p u b l i c s e c t o r a r e s e e n a s t h e way ahead.
However, t h e r h e o t o r i c of sound f i n a n c e has n o t q u i t e
been matched by performance. On p u b l i c spending t h e r e s u l t
i s t h a t c o n t r o l l i n g t h e r a t e of i n c r e a s e r a t h e r t h a n c u t t i n g
i n r e a l t e r m s on t a x a t i o n . Income t a x cum have been achieved
th rough h i g h e r i n d i r e c t t a x a t i o n , on borrowing, t h e government
h a s been a lmos t keynessan i n approach, i n c r e a s i n g d e f i c i t s
i n t e rms of growths. On e f f i c i e n c y , t h e r e c o r d i s b e t t e r .
C l e a r s a v i n g s have been g e n e r a t e d and manag2ment p r a c t i c e s
improved. But a f t e r a decade of what i s o f t e n p r e s e n t e d a s
r a d i c a l r e fo rm, we have h i g h e r spend ing and t a x e s than i n
1979.
The above a d a p t a t i o n i s an e x t r a c t from I1publ ic f i n a n c e i n
A r i t i a n s t r a t e g y and performance i n t h e 198O1sI1 g i v e n by
P r o f e s s o r A r t h u r Midwinfer , Reader i n p o l i t i c s a t t h e U n i v e r s i t y
o f S t r a t h a j d g e , Glasgow on 7 7 t h November 1991.
Management c o n t r o l , i n i t s b r o a d e s t c o n t e x t i s t h e means
by which an o r g a n i s a t i o n o r government c a r r i e s o u t i t s o b j e c t i v e s
e f f i c i e n t l y . P u b l i c s e c t o r o r g a n i s a t i o n can g e n e r a l l y be
d i s t i n g u i s h e d a s hav ing h i e r a c h i c a l s t r u c t u r e s composed by
r e s p o n s i b i l i t y c e n t r e s , u n i t s , s e c t i o n s , Departments and D i v i s i o n s .
Except a t t h e u n i t l e v e l , each r e s p o n s i b i l i t y c e n t r e c o n s i s t s
of a g g r e g a t i o n s o f s m a l l e r r e s p o n s i b i l i t y c e n t r e s . The
f u n c t i o n of e x e c u t i v e management i s ' t h e r e f o r e t o p l a n , c o - o r d i n a t e
and c o n t r o l t h e work of r e s p o n s i b i l i t y c e n t r e s . Anthony H.N
and Young D.W 1954 i n management c o n t r o l i n Non p r o f i t o r g a n i -
s a t i o n a r g u e s , I t the b a s i c c o n t r o l concep t s a r e t h e same i n b o t h
prof i t - o r l . e n t e d and non p r o f i t o r g a n i s a t i o n s , b u t because of
t h e s p e c i a l c h a r a c t e r i s t i c s of n o n - p r o f i t o r g a n i s a t i o n s , t h e
a p p l i c a t i o r l of t h e s e c o n c e p t s d i f f e r i n some i m p o r t a n t r e s p e c t s .
The c o n t r o l of any o r g a n i s a t i o n c o n s i s t s by and l a r g e o f
a d e f i n i t i o n of t h e r e l a t i o n s h i p s between c o n t r o l l a b i l i t y and
r e s p o n s i b i l i t y o r more p r e c i s e l y a s p e c i f i c a t i o n o f where
managers a r e r e s p o n s i b l e f o r which r e s o u r c e s i n t h e o r g a n i s a + i o n .
Anthony and Young (1984) d e f i n e a programme a s some
d e f i n a b l e a c t i v i t y o r group o f a c t i v i t i e s t h a t t h e o r g a n i s a t i o n
c a r r i e s on , e i t h e r d i r e c t l y i n o r d e r t o accompl ish t h e
o r g a n i s a t i o n ' s o b j e c t i v e s o r i n d i r e c t l y i n s u p p o r t of o t h e r
programme e lements . Each programme i s o p e r a t e d by a group of
p e o p l e a l l workin[: towards some o r g a n i s a t i o n a l o b j e c t i v e and
headed by a manager o r head of t h e m i n i s t r y who i s r e s p o n s i b l e
f o r t h e i r a c l i o n s .
Anthony and Young (1984) s u g g e s t e d t h a t t h e r e a r e f o u r
p r i n c i p a l components t o a formal management p r o c e s s ; f o r
programming, Budget f o r m a t i o n , o p e r a t i n g (and measurement) ,
and R e p o r t i n g and Eva lua t ion .
The budget p r o v i d e s t h e e s s e n t i a l l i n k between t h e i m p o r t a n t
element of programming and o p e r a t i n g , i t i s a s t a t e m e n t t h a t
e x p r e s s e s f u t u r e p l a n s i n f i n a n c i a l t e r m s , t h e y become form
committment f o r which funds have been a l l o c a t e d . I t a l s o
p r o v i d e s a b a s i s f o r e v a l u a t i n g performance , Wildavs ty (1975)
i n Budgeting - a comprehensive t h e o r y of budge ta ry p r o c e s s e s ,
d e s c r i b e s budge ta ry a s a t t e m p t s t o a l l o c a t e f i n a n c i a l r e s o u r c e s
th rough p o l i t i c a l p r o c e s s e s t o s e r v e d i f f e r i n g human purposes .
Budgets a r e g e n e r a l l y of two t y p e s - t h e revenue budget
and c a p i t a l budget . Revenue budge t s a r e o f t e n r e f e r r e d t o a s
l i n e i t e m budge t s ; t h a t i s budge t s which f o c u s on expense
e lements such a s s a l a r i e s , m a t e r i a l s and o t h e r consumables
r a t h e r t h a n on t h e r e a s o n f o r t h e expend i tu re .
The t r a d i t i o n a l budget c o n t i n u e s t o s e r v e i t s o r i g i n a l
p u r p o s e s , t h a t o f e n s u r i n g compliance w i t h t h e c o n d i t i o n
se t o u t i n a p p r o p r i a t i o n . T r a d i t i o n a l l i n e item budge t ing
e x i s t s because:
i.
ii.
iii.
i v .
I t i s i d e a s mechanism f o r l i m i t i n g e x p e n d i t u r e t o t h e
amount and t o t h e i t ems voted f o r t h e a p p r o p r i a t i o n s .
I t p r o v i d e s f e a s i b i l i t y when a c r o s s t h e board c u t s have
t o be made f o r more economic purposes .
I t i s a f a i r l y uncompl ica ted system t h a t a v o i d s any
c o n f l i c t s abou t o b j e c t i v e s and t h e methodogy, a c h i e v i n g
them; p a r t i c u l a r l y when budget p r e p a r a t i o n f o l l o w s a
" t i g h t w t i m e t a b l e .
I t i s a d a p t a b l e ( s o i t s s u p p o r t e r s c l a im) , t o all
economic s i t u a t i o n s .
W h i l s t many new i d e a s have been promoted f o r b u d g e t a r y ,
r e fo rm, i t remains t h e c a s e t h a t t h e y halle g e n e r a l l y f a i l e d
t o g a i n g e n e r a l accep tance .
J o n e s and Pendlebury (1 984) s t a t e : The t r a d i t i o n a l l i n e
i t e m budget h a s t h e f o l l o w i n g d e f e c t s :
a. The budget. i s subd iv ided on t h e b a s i s of Departments
o r a c t i v l t y c e n t r e s , each of which may o p e r a t e s e v e r a l
programmes e i t h e r i n d i v i d u a l l y o r a s j o i n t v e n t u r e s . ,
be I t i s u s u a l l y drawn up on an annual b a s i s by comparing
t h e p r e v i o u s y e a r t s b a s i s by e x p e n d i t u r e and add ing
i n c r e a m e n t s o r p e r h a p s dec rease .
c. There i s a n a t u r a l t endency , when d e a l i n g wi th i n p u t s
on an i n c r e m e n t a l b a s i s t o f avour e x i r ~ tine; programmes.
New programme have t o compete wi . th each o t h e r f o r l i m i t e d
r e s o u r c e s , r e g a r d l e s s of t h e i r p r i o r i t y , and
d. C o n t r o l i s p r i m a r i l y e x e r c i s e d on t h e budget i n p u t s r a t h e r
t h a n on i t s o u t p u t s . Tha t i s , i t p r o v i d e s d a t a on what
government consumes r a t h e r t h a n a b o u t what government
does o r a b o u t t h e purposes f o r which money i s s p e n t .
Wildavely , A (1975) i n - ~ u d ~ e t i n ~ : A compara t ive t h e o r y
of budge t ing p r o c e s s e s s t a t e : I t I t i s n o t s o much t h a t
t r a d i t i o n a l budge t ing succeeds b r i l l i a n t l y on every
i n t e n t i o n b u t t h a t i t does n o t e n t i r e l y f a i l o r any one
t h a t i s r e s p o n s i b l e f o r i t s l o n g e r i t y .
Most p u b l i c s e c t o r o r g a n i s a t i o n s a t t e m p t t o make a c l e a r
d i s t i n c t i o n between i t e m s of a revenue o r r e c u r r e n t . n a t u r e ,
and i t e m s of a c a p i t a l n a t u r e . , The c h a r t e r e d i n s t i t u t e of
p u b l i c f i n a n c e and ~ c c o u n t a n c y ' s p u b l i c a t i o n l o c a l a u t h o r i t y 1 :
Accounting p r i n c i p l e s (1 985) proposes t h e f o l l o w i n g r u l e f o r
i d e n t i f y i n g c a p i t a l e x p e n d i t u r e . Any o u t l a y which i s of
v a l u e t o t h e a u t h o r i t y i n t h e p r o v i s i o n o f t h e s e s e r v i c e s
beyond t h e end of t h e y e a r o f a c c o u n t s t lould be r e c o r d e d a s
a c a p i t a l a s s e t , p r o v i d e d t h e r e i s no l e g a l c o n s t r a i n t
w h i l s t new c a p i t a l a s s e t , such a s b u i l d i n g s c l e a r l y p r o v i d e
b e n e f i t s beyond o n e f i s c a l y e a r , c e r t a i n s i t u a t i o n s can a r i s e
when s u c h a c l a s s i f i c a t i o n i s l e s s obv ious . E x p e n d i t u r e on
r e p a i r i n g and m a i n t a i n i n g c a p i t a l a s s e t s migh t m e r e l y e n s u r e
t h a t t h e a s s e t r e m a i n s a t i t s p r e s e n t s t a t e and s h o u l d
t h e r e f o r e be t r e a t e d a s r evenue .
On t h e o t h e r h a n d , t h e r e p a i r s and m a i n t e n a n c e migh t
r e s u l t i n improvement t o t h e a s s e t s o r even an e f f e c t i v e
r e p l a c e m e n t of t h e a s s e t and s o migh t p r o p e r l y b e t h o u g h t
of a s c a p i t a l . The f o u n d i n g o f c a p i t a l e x p e n d i t u r e i s u s u a l l y
s r e a d o v e r t h e y e a r s t h a t b e n e f i t w i l l o c c u r .
The c h a r t e r e d I n s t i t u t e o f P u b l i c F i n a n c e and Accountancy
(1977) r e s e a r c h r e p o r t , c a p i t a l b u d g e t i n g , h a s i d e n t i f i e d
t h e f o l l o w i n g o b j e c t i v e s o f c a p i t a l b u d g e t i n g :
1. To e x p r e s s i n f i n a n c i a l terms c a p i t a l works n e c e s s a r y t o
meet o b j e c t i v e s e x p r e s s e d o r impl i ' ed o f an o r g a n i s a t i o n
w i t h i n an a c c o u n t i n g p e r i o d o r p e r i o d s .
2 . To s e t o u t t h e a n r e e d p r i o r i t i e s o f c a p i t a l schemes
3 . To f a c i l i t a t e c o - o r d i n a t i o n o f p l a n s and r e s o u , r c e s by:
A l l o c a t i n g th'e f i n a n c i a l res 'ources between depar tments .
A s s i s t i n g i n t h e implementa t ion of c a p i t a l schemes ,
P r o v i d i n g a b a s i s f o r f o r e c a s t i n g c a p i t a l c a s h f lows and
f i n a n c i a l r equ i rements .
P r o v i d i n g a b a s i s f o r f o r e c a s t i n g revenue i m p l i c a t i o n s
P r o v i d i n g a b a s i s f o r budge ta ry c o n t r o l o f o u t - t u r n a g a i n s t
f o r e c a s t ; and
To s a t i s f y government c o n t r o l r equ i rements .
The c o n t r o l s t a g e s of t h e management p l a n n i n g and c o n t r o l
c y c l e begin w i t h t h e budget and a l s o i n c l u d e d c o n t r o l l i n g and
measur ing and r e p o r t i n g , a n a l y s i n g and feedback.
These s t a g e s a r e o f t e n r e f e r r e d t o c o l l e c t i v e l y a s
Budgetary Cont ro l . Budgetary c o n t r o l i s concerned w i t h
e n s u r i n g t h a t a c t u a l e x o e n d i t u r e i s i n l i n e w i t h budgeted
amounts and t h a t t h e o b j e c t i v e s and l e v e l s of a c t i v i t i e s
envisaged i n t h e budget a r e achieved. A c r u c i a l r o l e of
management a c c o u n t i n g i s t h a t o f i n t r o d u c i n g and m a i n t a i n i n g
a sound system o f budge ta ry c o n t r o l .
The f i r s t r equ i rement of a good system of budge ta ry
c o n t r o l i s t o s e t up a c c o u n t s f o r c o l l e c t i n g d a t a on i n p u t s
and o u t p u t s a t t h e l o w e s t d i s t i n c t l e v e l o f a c t i v i t y . These
a c t i v i t i e s a c c o u n t s a r e c a l l e d c o s t c e n t r e s .
9.
I n d i v i d u a l managers w i l l be r e s p o n s i b l e f o r one o r more
of t h e s e c o s t c e n t r e s and t o g e t such c o s t c e n t r e s from a
r e s p o n s i b i l i t y c e n t r e . The r e s p o n s i b i l i t y c e n g r e s a r e
aggrega ted t o form f u r t h e r r e s p o n s i b i l i t y c e n t r e s a r
tiherprogramme.
The r i g i d i t y o f t h e budge t s of any p u b l i c s e c t o r b o d i e s
can produce u n d e s i r a b l e e f f e c t s . I t i s o f t e n sugges ted t h a t
t h e budget r e s t r i c t s f l e x i b i l i t y and a c t s a s a s t ra idk i t - j a c k e r on management a c t i o n . T h i s may r e s u l t i n e x p e n d i t u r e
b e i n g i n c u r r e d mere ly because i t i s i n c l u d e d i n t h e budget ,
even t h o u ~ h i t i s no l o n g e r r e g a i n e d , whereas o t h e r a c t i v i t i e s
which mav be much more b e n e f i c i a l i n fonm of t h e o b j e c t i v e s
of t h e o r g a n i s a t i o n , a r e i g n o r e d because of t h e absence o f
budge ta ry c o n t r o l .
According t o t h e m i s t a k e of Char te red Accountants o f
N i g e r i a ( I C A N ) , due t o p o o r budge.t and budge ta ry c o n t r o l i n
N i g e r i a , l a c k of s u c c e s s i n t h e achievement of t h e aims and
o b j e c t i v e s o f government had been a p p a r e n t . The economy
remained d e p r e s s e d and t h e problems o f t h e p r o d u c t i v e s e c t o r
a r e seen more prominent . Such a s i n i s t e r c a l l s f o r a d r a s t i c
r e a p p r a i s e d of t h e o r i g i n a l of budget f e a t u r e s i n N i g e r i a and
p o s s i b l y t h e u n d e r l y i n g ph i losophy on r o l l i n g i t was based
u n f o r t u n a t e l y o u r government do n o t c a r e f o r such re-examina-
t i o n and no c o r r e c t i v e measure had been i n no t ime i n t r o d u c e d .
I t had become o b v i o u s t h a t t h e t y p e o f r e g u l a t i o n t h a t
government impose on ec,onomy now had an a d v e r s e e f f e c t on ,
economy and r e s u l t e d t o m a s s i v e budge t d e f i c i t e v e r y y e a r .
Accord ing t o ICAN t h e f o l l o w i n g l a p s e s h a v e been i d e n t i f i e d
namely; i n d i s c r i m i n a t e v i r e m e n t , p o o r p l a n n i n g and c o n t r o l ,
l a c k o f p r o p e r e v a l u a t i o n o f pe r fo rmance and p o o r
u n i m p l e m e n t a t i o n s t r a t e g y and p r e v a l e n t mismanagement o f
p u b l i c f u n d s d u e t o p o o r b u d g e t and b u d g e t a r y c o n t r o l .
1 .I S t a t e m e n t of t h e problem
'+ The problem o f t h i s r e s e a r c h i s t o d e t e r m i n e what i n t e r n a l
and e x t e r n a l c o n s t r a i n t s t h a t have a f f e c t e d t h e e f f e c t i v e
and e f f i c i e n t u s e o f b u d g e t and b u d g e t a r y c o n t r o l as a t o o l
of management i n t h e Government m i n i s t r i e s , s p e c i a l emphas i s
on t h e m i n i s t r y o f f i n a n c e and economic deve lopment Awka.
The problem t h e n i s how we can f o r m u l a t e b u d g e t and
b u d g e t a r y c o n t r o l s o t h a t Government f u n d s would b e u t i l i s e d
i n a manner p r e s c r i b e d by t h e f i n a n c i a l r e g u l a t i o n s s o t h a t
t h e c i t i z e n s s t a r t b e n e f i t i n g from t h e a l l o c a t e d f u n d s o f
t h e government i n any f i s c a l y e a r and a l s o t o e n a b l e t h e
government p e r f o r m a c c o r d i n g t o i t s f i s c a l and mone ta ry
p o l i c i e s .
1.2 Purpose of t h e s tudy
The purpbse o f ' t h i s s t udy i s t o g e t a t t h e r o o t
of t h e problem t h a t have bedev i l l ed t h e o p e r a t i o n a l .
e f f i c i e n c y of government m i n i s t r i e s and e x t r a - m i n i s t e r i a l
Department consideping t h e huge amount of p u b l i c funds
a l l o c a t e d t o them y e a r l y which t h e o b j e c t i v e i s de fea t ed
because of bad management a r i s i n g from mis -appropr ia t ion
of fund d e s p i t e budget p lann ing and budgetary c o n t r o l
enshr ined i n t h e c o n s t i t u t i o n of t h e Federa l Republic of
Niger ia .
1.3 The o b j e c t i v e of t h e s tudy
The o b j e c t i v e s of t h e s tudy a r e a s fo l lows :
1. To i d e n t i f y what t ype of budgetary p roces se s i n use i n t h i s
m i n i s t r y and what f u n c t i o n s a t t r a c t t h e budgetary system;
2. How t h e m a t e r i a l r e sou rces of t h e m i n i s t r y have been
managed.
3. How f a r budget has been used a s a parameter t o measure
t h e a c t u a l achievement of people , depar tments and .
m i n i s t r i e s ;
4, The r o l e of t h e budget committee of t h e m i n i s t r y ;
5 . The a c t u a l composit ion of t h e budget of t h e s t a t e which' t h e
m i n i s t r y i s p a r t and p a r c e l o f ;
12.
6. The implementa t ions s t r a t e g i e s adopted by t h e m i n i s t r y ; and
7. The budge ta ry c o n t r o l t e c h n i q u e $ adop ted by t h e m i n i s t r y .
1.4 Formula t ion of Hypothes i s
I n t h i s r e s e a r c h , we s h a l l work w i t h t h e f o l l o w i n g
h y p o t h e s i s :
1. Ho: The u s e of budge ta ry p l a n n i n g and c o n t r o l h a s d i r e c t
r e l a t i o n s h i p w i t h p r u d e n t f i n a n c i a l management and t h e r e f o r e
i n c r e a s e p r o d u c t i v i t y ,
' 3 . H i : The u s e o f budge ta ry p l a n and c o n t r o l h a s no r e l a t i o n s h i p
w i t h p r u d e n t f i n a n c i a l management and i n c r e a s e p r o d u c t i v i t y .
S i g n i f i c a n c e of t h e s t u d y
The budget p r o v i d e s t h e e s s e n t i a l l i n k between t h e
i m p o r t a n t element of programming and o p e r a t i o n , and c o n t r o l
s t a g e s of t h e management p l a n n i n g and c o n t r o l c y c l e begin
w i t h t h e budge t , and c o n t r o l l i n g , measur ing , r e p o r t i n g ,
a n a l y s i n g and feedback. S i n c e t h e concept of budget p l a n n i n g
i s a s o l d a s man every e s t a b l i s h m e n t , be it p u b l i c o r
p r i v a t e f i n d s it n e c e s s a r y t o p r e p a r e budge ta ry c o n t r o l
system f o r t h e purpose of t r a n s l a t i n g p o l i c i e s , c o - o r d i n a t i n g
a c t i v i t i e s a s w e l l a s f i n a n c i a l c o n t r o l s i n o r d e r t o
ach ieve t h e b e s t p o s s i . b l e r e s u l t s . Hence t h e g r e a t
impor tance of t h i s s t u d y a t t h i s p o i n t canno t be over-
emphasized s i n c e t h e d e g r e e t o which t h e s e o b j e c t i v e s have
been achieved of N i g e r i a n ~ o v e r n m e n t cannot be e a s i l y
e v a l u a t e d i n t h e r e c e n t p a s t ; I t had become obv ious t h a t t h e
t y p e of r e g u l a t i o n t h a t Government had imposed on t h e economy
have had an a d v e r s e e f f e c t on t h e economy and r e s u l t e d t h i s
mass ive budget d e f i c i t s . The r a t e of i n f l a t i o n which was
p i v o t a l element i n t h e s u c c e s s o r f a i l u r e of t h e budget
measures had f a i l e d u s e f u l l y t o s t a y w i t h i n t h e p e r c e n t a g e
t a r g e t deemed n e c e s s a r y f o r such s u c c e s s .
The impor tance of a c c o u n t a b i l i t y and t r a n s p a r e n c y i n t h e
f o r m u l a t i o n and e x e c u t i o n of economic p o l i c y cannot be over-
emphasised.
1 .6 D e f i n i t i o n of Terms:
1. - A budget i s a fo rmal s t a t e m e n t o f e s t i m a t e d f u t u r e
income and e x p e n d i t u r e .
2. Budgetary Accounting: T h i s r e f e r s ' t o one p r a c t i s e of many
p u b l i c s e c t o r o r g a n i s a t i o n i n keep ing and p r e s e n t i n g t h e i r
o p e r a t i n g a c c o u n t s i n t h e same format and a l o n g s i d e t h e i r
budgets .
3 . Revenue Es t ima te : T h i s i s a s t a t e m e n t of income d e r i v a b l e
w i t h i n a s p e c i f i e d p e r i o d o f t ime.
F l x p ~ n d i t u r e Estimate.: - T h i s i s a s t a t e m e n t of a n t i c i p a t e d
c a s h out - f low w i t h i n a s p e c i f i e d p e r i o d of t ime. .
5. Cash Budget: . I t i s a s t a t e m e n t of Expected cash r e c e i p t s
and d i sbursements i n a cominc, b u d g e t i r y p e r i o d .
6. Fund Cont ro l : Is t h e management of l e g i s l a t i v e a p p r o p r i a t i o n s . t o e n s u r e t h a t t h e y a r e used f o r t h e purpose f o r which t h e y
were i n t e n d e d , t h a t t h e y a r e used economica l ly and
e f f i c i e n t l y .
7. A p p r o p r i a t i o n Monitoring: T h i s i n v o l v e s a s s e s s i n g whether a c t u a l e x p e n d i t u r e s have been j u s t i f i e d i n r e l a t i . o n t o
proposed programmes and a c t i v i t i e s d u r i n g t h e budget p e r i o d .
8. Government f i n a n c i a l s t a t e m e n t s : T h i s i s a s t a t e m e n t which p r o v i d e s an o v e r a l l p i c t u r e of t h e f i n a n c i a l we l l -
b e i n g o r o t h e r w i s e i f t h e n a t i o n p l u s an i n d i c a t i o n of t h e
t o t a l e f f e c t of a l l a l l o c a t i o n and spend ing d e c i s i o n s o f t h e Government on t h e n a t i o n ' s r e s o u r c e s .
9. Revenue Cont ro l : T h i s d e a l s w i t h t h e t i m e l y c o l l e c t i o n of revenue due t o t h e f e d e r a l / s t a t e Government, e n s u r i n g
t h a t amounts due a r e a c t u a l l y c o l l e c t e d and t h a t what i s
c o l l e c t e d g e t s i n t o t h e of Government.
l o . Expend i tu re Cont ro l : Expend i tu re c o n t r o l o r v o t e r e l a t e s
p r i m a r i l y t o c o n t r o l on amounts expended.
CHAPTER TWO
REV1 EW OF RELATED LITERATURE
2.1 Def in i t i on : ..
A budget ha s been def ined a s a f i n a n c i a l and/or
q u a l i t a t i v e s t a t emen t prepared and approved p r i o r t o
a def ined pe r iod f o r t h e purpose of a t t a i n i n g a g iven
ob j ec t i ve . I t may i n c l u d e income, expendi tu re and
employment of c a p i t a l (ICMA) . The i n s t i t u t e of c o s t and management Accountant
d e f i n e s budgetary c o n t r o l a s " t h e e s t ab l i shmen t of
depar tmental budgets r e l a t i n g t h e r e s p o n s i b i l i t i e s of
Execut ives t o t h e requ i rements of a p o l i c y , and t h e
cont inuous comparison of a c t u a l wi th budgeted, e i t h e r t o
s ecu re by i n d i v i d u a l a c t i o n t h e o b j e c t i v e s of t h a t p o l i c y
o r t o p rov ide a f i r m b a s i s f o r i t s r e v i s i o n w .
I n a n u t s h e l l , a budget i s a parameter which measures
t h e a c t u a l achievement of people , depar tments , m i n i s t r i e s ,
dirms e t c . whi le budgetary c o n t r o l ensu re s t h a t a c t u a l
r e s u l t s a r e p o s i t i v e l y i n accordance wi th t h e o v e r a l l
f i n a n c i a l and p o l i c y o b j e c t i v e s of an es tab l i shment .
A budget which i s no th ing more t han t h e f i n a n c i a l
t r a n s l a t i o n of p o l i c y o b j e c t i v e s i n terms of a n t i c i p a t e d
revenue and expend i tu re w i t h i n a g iven peri.od of t ime ,
u s u a l l y a y e a r can a l s o be s p l i t i n t o y e a r l y , , ¶ u a r t e r l y
on even monthly, f i n a n c i a l s t a t e m e n t s f o r review and c o n t r o l
purposes . These f i n a n c i a l s t a t e m e n t s a c t a s a g u i d e t o - Chief E x e c u t i v e s , Head o f p a r a s t a t a l s , e t c . i n t h e o p e r a t i o n
of t h e r e s o u r c e s a t t h e i r d i s p o s a l .
I would d i s c u s s e d among o t h e r t h i n g s , t h e impor tance o f
management by o b j e c t i v e s i n Budgetary c o n t r o l and management
of an o r g a n i s a t i o n . He s t r e s s e d t h e need and impor tance
o f c o - o r d i n a t i n g t h e e f f o r t s of t h e e x e c u t i v e s i n a c h i e v i n g
t h e o b j e c t i v e s of an o r g a n i s a t i o n . He e x t e n s i v e l y d i s c u s s e d
budget used i n manufac tu r ing o r g a n i s a t i o n s . However Wald
d i d n o t s a t t h e k ind of budgets t h a t w i l l be v a l u a b l e t o a
non-manuf a c t u r i n g o r g a n i s a t i o n .
According t o P r o f e s s o r S c h i c l h , R.N. Budgetary Cont ro l
whether i n p u b l i c o r p r i v a t e c o r p o r a t i o n , r u s t be a d e q u a t e l y
p lanned t o s u i t t h e r e q u i r e m e n t s of each o r g a n i s a t i o n concerned
and u s u a l l y fo l lowed up t o d e t e c t any a r r o r s of t h e e a r l y
s t a g e s t o e n s u r e maximum o u t p u t . P r o f e s s o r S c h l c h l h made a
s i g n i f i c a n t s t u d y i n h i s work b u t f a i l e d t o a p p r a i s e t h e
performance and e v a l u a t i o n of budge ta ry p r o c e s s e s a p p l i e d
i n a p a r t i c u l a r o r g a n i s a t i o n .
J. Rathy made a c l e a r e r d i s t i n c t i o n between Budgetary
p l a n n i n g and c o n t r o l systems. He h i g h l i g h t e d t h e impor tance
of f o l l o w i n g up t h e budget i n such a way a s t o a c h i e v e a r e a -
li s t i c one. He a l s o emphasised t h e impor tance of i n c o r p o r a t i n g
t h e d i f f e r e n t depar tments and v a r i a b l e s t h a t make up t h e
o r g a n i s a t i o n . I n a d d i t i o n , c o n t r o l s t a n d a r d shou ld be
evolved towards a r e a l i s t i c ' o b j e c t i v e s i n o r d e r t o moni to r
t h e v a r i a n c e s t h a t occur.
According t o Bathy, a l l e l ements i n v o l v i n g c o s t shou ld -,
be t a k e n i n t o c o n s i d e r a t i o n s . P r o f i t / s u r p l u s i s a f f e c t e d
by t h e v a r i a n c e c o n t r o l system i s used t o check r e t u r n
on c a p i t a l employed, r e t u r n on s a l e s and c a p i t a l t u r n o v e r .
To crown i t a l l , Bathy recommended t h e u s e of management
a p p r a i s a l which shou ld be done by changing a s s e t s such
a s f i x e d o r permanent a s s e t v a r i a b l e o r c i r c u l a t i n g . T h i s
h e l p s t o make a r e a l i s t i c v a r i a n c e a n a l y s i s s o a s t o t a k e
s t e p s t o r educe t h e a s s e t s h e l d o r a l l o w them t o be more
e f f e c t i v e l y u t i . i s e d . T h i s c o n t r o l sys tems should a c c o r d i n g
t o Bathy, be d i r e c t e d t o p r o d u c t i o n and s i m i l a r c e n t r e s t o
a c h i e v e t h e p rede te rmined r e s u l t s .
Bathy t o an e x t e n t d i d a commandable job u s e f u l t o
r e s e a r c h e r s and b u s i n e s s i n g e n e r a l , who may use budge ta ry
p l a n n i b g and c o n t r o l t o a c h i e v e p r o d u c t i v i t y . However, he
f a i l e d t o u s e a t y p i c a l o r g q n i s a t i o n t o i l l u s t r a t e h i s
a n a l y s i s h o l d i n g a t t h e o r t ; a n i s a t i o n t s budget and how t h i s
budget h a s been adhered t o by a l l concerned i n t h e
o r g a n i s a t i o n , t h e r e b y f i n d i n g o u t whether i t h a s he lped t o
a c h i e v e i n c r e a s e d p r o d u c t i v i k y .
4 S. Olu F a t i m e h i n p r e s e n t e d one o f t h e b e s t known
c a s e s i n budge. tary a n a l y s i s w i t h r e f e r e n c e t o t h e N i g e r i a n
c o n t e x t . H e emphasised t h e r e l a t i o n s h i p between a c c o u n t i n n
and budget ing .
According t o f a t i m e h i n , t h e a c c o u n t i n g system and t h e
budget a r e b u i l t around t h e o r g a n i s a t i o n a l s t r u c t u r e and
b o t h a r e i n f o r m a t i o n sys tems concerned w i t h t h e same
o p e r a t i o n and f i n a n c i a l si t u a t i o n s .
Accounting r e p o r t s q u a n t i f y i n f o r m a t i o n on a c t u a l ,
p a s t e v e n t s and c o n d i t i o n s , w h i l e t h e budget r e f l e c t s what
t h o s e v a l u e s a r e expected t o be and what i s expected i n t h e
f u t u r e . The budge ta ry p r o c e s s h e l p s t o o r g a n i s e and
f o r m a l i s e t h e p l a n n i n g r e q u i r e d f o r t h e s e o p e r a t i o n s ,
a x p r e s s e d o b j e c t i v e s and t h e n becomes t h e p l a n h a s been
achieved.
Not o n l y d i d Fa t imeh in emphasise t h e b a s i c o b j e c t i v e s o f
budge ta ry a n a l y s i s , h e s t r e s s e d t h e b a s i c f u n c t i o n s and
c h a r a c t e r i s t i c s which a r e a l i s t i c budge ta ry p l a n n i n g and
c o n t r o l system u n i t p r o c e s s e s . Budget i s f u t u r i s t i c ' i n
p o s t u r e , u s e s r e s o u r c e s and t h e r e f o r e must be ve ry d e f i n i t i v e .
Budgetary ' a n a l y s i s , a r evenue-expend i tu re e x e r c i s e , i s a
r e g u l a t i o n o f t h e economy.
Paul 9ammuelson5 conf i rms t h i s s t a t e m e n t when he s a i d '
t h a t t h e budget i s t h e most powerful s i n g l e i n s t r u m e n t
of any economic p o l i c y i n an o r g a n i s a t i o n o r government.
I n one o f h i s l e c t u r e s , H.C. Agim a n a l y s e d t h e t y p e s
and f u n c t i o n s of budge ta ry p r o c e s s e s . He a l s o h i g h l i g h t e d some
of t h e s i g n i f i c a n t s t a g e s and r e s p o n s i b i l i t i e s of d i f f e r e n t
budge t s used. However, h e d i d n o t o f f e r s u g g e s t i o n s on how
t h i s manager ia l t o o l can i n c r e a s e p r o d u c t i v i t y and what
c o r r e c t i v e measure a r e t o be t aken where $here a re d e v i a t i o n s
i n t h e budget.
2.1 Na tu re o f t h e Budget
A budget i s a c t u a l l y a management p l a n of a c t i o n expressed
q u a n t i t a t i v e l y , m o s t l y b u t n o t e x c l u s i v e l y , i n f i n a n c i a l
te rms. S i n c e i t i s a p l a n o f a c t i o n , i t must have g e a r s
c l e a r l y s p e c i f i e d t o be achieved. I n t h e b u s i n e s s environment
t h e s e g o a l s a r e i n v a r i a b l y p r o f i t t a r g e t s which i s why t h e
budget i s a l s o c a l l e d p r o f i t p lann ing .
Also , s i n c e i t r e l a t e s t o t h e f u t u r e it must have a c l e a r
tirrie f rame-shor t - te rm, rriedium-term, long- term, one month,
one q u a r t e r , one y e a r e t c .
I t s scope would however i n d i c a t e whether i t covers t h e
e n t i r e a c t i v i t i e s o f t h e o r g a n i s a t i o n such a s a m a s t e r budget
o r o n l y a c t i v i t i e s - such a s o p e r a t i o n s b u d g e t , o r a
s p e c i a l i s e d f u n c t i o n such a s a f i n a n c i a l budget . A s a p l a n
of a c t i o n , t h e r e f o r e , t h e budget i s d i r e c t l y l i n k e d w i t h
o r g a n i s a t i o n a l c o n t r o l .
The budget i s t h u s n o t o n l y a major management p l a n n i n g
d e v i c e - i t i s a b a s i c a c c o u n t i n g model f o r manager ia l
c o n t r o l . I t i s because by s p e c i f y i n g t h e g o a l s t o be
a c h i e v e d , t h e manager ia l c p n t r o l f u n c t i o n i s f a c i l i t a t e d
th rough an e v a l u a t i o n of a c t u a l per formance , comparison
o f t h i s w i t h t h e t a r g e t s s p e c i f i e d by t h e budget and t h e
i n s t i t u t i o n of a p p r o p r i a t e remedi a 1 a c t i o n .
2.2 Budgetary Cont ro l
I f a budget h a s t o do more t h a n remain a s j u s t a
b e a u t i f u l l y des igned formal p l a n , it must f i t i n t o t h e
e x i s t i n g manager ia l c o n t r o l p r o c e s s and system.
Budgetary C o n t r o l t h e r e f o r e i m p l i e s n o t j u s t
e s t a b l i s h i n g t h e budget i t s e l f , b u t a l s o r e l a t i n g t h e
r e s p o n s i b i l i t y of each e x e c u t i v e t o a d e s i r e d , ag reed and /o r
implemented p o l i c y i n t h e budge t , t h e c o n t i n u o u s ( o r
p e r i o d i c ) comparison of a c t u a l w i t h budgeted r e s u l t s i n o r d e r
t o e n s u r e t h a t p l a n s a r e b e i n g met w i t h t o p r o v i d e a b a s i s
f o r r e v i s i n g t h e budget. What t h i s means i s t h a t a budget
need n o t be viewed a s s a c r o s a n t , s i n c e c o r r e c t i v e a c t i o n
21
may r e q u i r e t a k i n g a second ldok a t t h e budget i t s e l f ,
t h e r e a r e two a s p e c t 5 .of budgetary c o n t r o l t h e p roces s and
t h e system.
2.2.1 Budgetery Control Process
The f i r s t i s t h e budget ing c o n t r o l p roces s i t s e l f , which
s t a r t s wi th t h e p r e p a r a t i o n and es tab l i shment of t h e budget
i t s e l f . I t may be i d e n t i f i e d a t t h r e e p lann ing l e v e l s a s
fo l lows:
Level 1: S t r a t e g i c
This l e v e l i s normally concerned wi th t h e o v e r a l l g o a l s
of t h e o r g a n i s a t i o n on a more o r less long-term bas i s .
Top management i s u s u a l l y d i r e c t l y involved i n t h e form of
a budget committee, t h e s p e c i f i c f u n c t i o n s o f which inc lude :
- Deciding 00 gene ra l o r g a n i s a t i o n a l p o l i c y o b j e c t i v e s
- Request ing, r e c e i v i n g and s tudying u n i t and depar tmental budgetory e s t ima te s .
- Suggest ing r e v i s i o n s
- Approving t h e budge t ( s ) and any l a t e r r e v i s i o n s
- Moni t o r i n g and co-ord ina t ing budget implementat ion
- Receiving and ana lys ing budget performance r e p o r t s
- Recommending c o r r e c t i v e ac t i on .
From t h e s e f u n c t i o n s , i t . can be seen t h a t t h e budget
committee p l ays a c r u c i a l r o l e i n t h e c o n t r o l p roces s and
i s t h e r e f o r e indi .spensable . I t i s an execu t ive committee,
and i s a s t a n d i n g r a t h e r t h a n an ad-hoc one. I t main
concern i s t h e t o t a l o r mas te r budget pretriew o f l e v e l
one. A l l t h e o v e r a l l p l a n s a r e a t t h i s l e v e l broken down . . . .
i n t o o p e r a t i o n a l l y r e l e v a n t components, and k e y o r
c o n s t r a i n i n g f a c t o r s a r e i d e n t i f i e d and i s o l a t e d f o r
emphasis. F o r example a p a r t i c u l a r budgetory p r o c e s s may
r e q u i r e t h a t i n o r d e r t o be a b l e t o c a r r y o u t o p e r a t i o n s o r
perform some a c t i v i t i e s , r evenues must be g e n e r a t e d from
t h e s a l e of a p a r t i c u l a r i t e m , i n which c a s e t h e s a l e s
budget f o r t h a t i t e m had t o be t h e s t a r t i n g p o i n t .
Leve l 3: Opera t ions - P l a n n i n g and Cont ro l
T h i s l e v e l h a s t o do w i t h t h e a c t u a l day t o day work.
I n p r a c t i c e a l o t of f l e x i b i l i t y i s r e q u i r e d by s u p e r v i s o r s
i n a p p l y i n g c o n t r o l s and s a n c t i o n s s p e c i f i e d by management.
Budgetory C o n t r o l system
The second a s p e c t of budgetory c o n t r o l t h e system i t s e l f ,
which i s e n c a p s u l a t e d i n t h e f o l l o w i n g diagram.
FEATURES OF A BUDCETOHY CONTROL SYSTEM
P l a n n i n g
feedback comparing
The m a s t e r Budget
feedback i n s t r u c t r e v i s i o n
o p e r a t i o n s l e a d i n g t o p r e p a r a t i o n o r r e p o r t s i n s t r u c t f u r t h e r
a c t i o n
No i n s t r u c t i o n R e p o r t s of comparison between a c t u a l and budget
Dec i s ion No Is f u r t h e r a c t i o n YES r e q u i r e d ?
I s Budget t o be r e v i s e d ?
From t h e diagram., i t i s , observed t h a t t h e budgetary
c o n t r o l system c o n s i s t s e s s e n t i a l l y of t h e s t r u c t u r e s ,
f a c i l i t i e s and procedures t h a t a r e put i d p l a c e t o ensure
t h a t t h e p lann ing , p r e p a r a t i o n , comparison and c o r r e c t i v e
d e c i s i o n phases of t h e budgetary p roces s a r e e f f e c t i v e l y
and e f f i c i e n t l y executed.
What t h e diagram a l s o imp l i e s i s t h a t u n l i k e what
i s g e n e r a l l y assumed, budgetory c o n t r o l does not only
mean ensur ing t h a t budgetory p o l i c y and t a r g e t s a r e s t r i c t l y
ailhered t o a t a l l t imes . I t means a l s o t h e a b i l i t y of t h e
system t o show need, when necessary f o r t h e budget i t s e l f
t o be r e v i s e d even dur ing implemention.
F i n a l l y , t h e diagram shows t h a t i t i s f i r s t necessary
t o ana lyse t h e budget on t h e b a s i s of expected o r known,
measurable c r i t e r i a , and t h e n t o monitor and a p p r a i s e
performance ( a s r e f l e c t e d i n t h e performance r e p o r t s )
a g a i n s t t h e s e c r i t e r i a be fo re any c o r r e c t i v e a c t i o n can be
taken.
2.2.2 Budget Annlysi. s
Budget a n a l y s i s seeks t o i s o l a t e t h e c o n t r o l l a b l e from
t h e non -con t ro l l ab l e f a c t o r s i n t h e budget , and then t o
e v a l u a t e a c t u a l r e s u l t s a g a i n s t t h e s e f a c t o r s , p a r t i c u l a r l y
t h e c o n t r o l l a b l e ones. A c o n t r o l l a b l e f a c t o r , a c o s t
24.
item i n t h e budget f o r i n s t a n c e would be t h e one o v e r
which t h e s u p e r v i s o r f o r example can e x e r c i s e some i n f l u e n c e .
Those t h a t he canno t i n f l u e n c e a r e u n c o n t r o l l a b l e by him and
i t would t h e r e f o r e be u n f a i r and f r u i t l e s s t o e v a l u a t e h i s
performance a g a i n s t such c o s t i t e m s .
The major purpose of budget a n a l y s i s i s t h e r e f o r e t o
d i r e c t management a t t e n t i o n t o where c o r r e c t i v e a c t i o n i s
n e c e s s a r y d u r i n g budget implementa t ion . I t i s d e s c r i b e d a s
manaaement by e x c e p t i o n and it e n s u r e s t h a t i n pe r fo rming i t s
c o n t r o l f u n c t i o n where budge t s a r e concerned, managements '
t ime i s o p t i m e l l y u t i l i s e d .
I n p r a c t i s e , t h e a n a l y s i s of budget a r e p r e s e n t e d i n t h e
form of performance r e p o r t s which a r e p r e s e n t e d . to management.
Such a r e p o r t can be packaged and p r e s e n t e d i n any form
depending on t h e amount and e x t e n t o f d e t a i l s r e q u i r e d , a s
w e l l a s what i s d e s i r e d t o be c o n t r o l l e d i n t h e budget.
I n whatever form i t comes, however, i t s f o c u s is t o show
d e v i a t i o n s (good o r bad) of a c t u a l r e s u l t s from budgetory
t a r g e t s .
2.2.3 Budget Moni tor in^
One of t h e most d i f f i c u l t a s p e c t s of any budge t ing system
i s how t o hand le human r e s p o n s e t o budgetory p l a n s . I n term
of bo th e v a l u a t i o n and m o t i v a t i o n . For example, a t y p i c a l
budget may c r e a t e f e e l i n g s o f c o n f u s i o n , f r u s t r a t i o n ,
s u s p i c i o n and even., h o s t i l i t y w i t h i n t h e o r g a n i s a t i o n . .
because employees p e r c e i v e i t s g o a l s a s a l l i e n t o t h e i r
needs. Does a p a r t i c u l a r v a r i a n c e f o r example mean t h e same
t h i n g t o both t h e manager p r e p a r i n g t h e performance budget
and t h e one r e c e i v i n g i t ? Is t h e r e a g e n e r a l u n d e r s t a n d i n g
and a c c e p t a n c e o f t h e message c o n t a i n e d i n both t h e
budget and performance r e p o r t s based on it.
~ u e s t i o n s such a s t h e s e a r e i m p o r t a n t because
maximum co-opera t ion i s needed w i t h i n t h e o r g a n i s a t i on
i n o r d e r t o e n s u r e t h a t t h e minimum moni to r ing e x e r - ' ,I s e
u s e f u l approach t o s o l v i n g t h i s probl(>m i s t o
o rnake s u b o r d i n a t e s w i t h i n t h e o r g a n i s a t i o n
t a k e an a c t i v e r o l e i n t h e s e t t i n g of t h e budgetory
g o a l s . A t what p r e c i s e l e v e l . (1 ,29r 3 ) t h i s i s achieved '
i s h i g h l y v a r i a b l e and even c o n t e n t i o u s b u t t h e advan tages
a r e n o t i n doubt .
The ph i losophy u n d e r l y i n g t h i s approach i s t h a t
because employees have had a s a y i n t h e s e t t i n g of
budgetory g o a l s , t h e y a r e more l i k e l y t o f i n d t h e s e g o a l s
a c c e p t a b l e t o them (and t h e r e f o r e worth a c h i e v i n g ) t h a n
no t . Consequent ly , t h e y a r e more l i k e l y t o be w i l l i n g t o s
submit themse lves t o be ing moni tored and e v a l u a t e d a g a i n s t
such goa l s . T h i s approach r e s u l t s i n what i s g e n e r a l l y
d e s c r i b e d a s p a r t i c i p a t i v e budget a s opposed t o an
a u t h o r i t a t i v e budget which i s handed down from above and
v i r t u a l l y imposed on su rbod j n a t e s .
Pe rhaps an even more i m p o r t a n t a s p e c t s of budget
m o n i t o r i n g i s t h e view t h a t such s u r b o d i n a t e s shou ld a l s o
be i n v o l v e d i n a p p r a 5 s i n g t h e i r own performance a g a i n s t
budget goa l s .
I n t h a t c a s e performance r e p o r t s shou ld n o t j u s t
move t o mana~emcnt , b u t should al:jo be communicat.ed t o a l l
f u n c t i o n a r i e s i n v o l v e d i n t h e budgetory p r o c e s s . Such a
p rocedure would f a c i l i t a t e c l o s e r i n t e r a c t i o n s between
employees and management i n o r d e r t h a t g r e a t e r u n d e r s t a n d i n g
can be c r e a t e d .
I n t h e budget m o n i t o r i n g p r o c e s s , t h e budget committee
always p l a y s a b e r y c r i t i c a l ro l -e and i s i n f a c t , t h e
main organ f o r t h e s u c c e s s of t h e budget.
Hence t h e budget committee shou ld be a s t a n d i n g one w i t h w e l l
d e f i n e d a r e a s o f e x e c u t i v e a u t h o r i t y . I f t h i s i s n o t done,
and p r o p e r c o - o r d i n a t i n g a c h i e v e d , i n d i v i d u a l s who
a d m i n i s t e r t h e budget would t u r n o u t a s s c a p e g o a t s f o r t h e
r e a l and imagined performance f a i l u r e s w i t h i n t h e o r g a n i s a -
t i o n .
E s s e n t i a l s of Budget p r e p a r a t i o n
According t o � ran cis Ojade i n h i s p a p e r "Budget
p l a n n i n g and i m p l e m e n t a t i o n 1 Budget p r e p a r a t i o n i n v o l v e s
two e s s e n t i a l s , c l e a r t h i n k i n g and common sense .
U n f o r t u n a t e l y , t h i s s t u d y cannot h e l p s t u d e n t s and
r e a d e r s of t h e s t u d y t o d w e l l more on t h e s e due t o want
of t i m e , and t h e h a r d e s t t o apply . I n this s t u d y a
few words have been and w i l l be de f ined and a l o g i c a l
approach sugges ted .
2.4 F o r e c a s t s and Budgets Compared:
According t o Dean J. i n h i s p a p e r t i t l e d "Budget and
Budgetory Contro l1 ' i t i s v e r y i m p o r t a n t indeed t o n o t e
c a r e f u l l y t h e d i s t i n c t i o n between a f o r e c a s t and a budget ;
a. A f o r e c a s t i s a p r e d i c t i o n of what w i l l happen a s a
r e s u l t o f a g i v e n s e t o f c ' i rcumstances.
b. A budget i s a p lanned r e s u l t t h a t an o r g a n i s a t i o n
aims t o a t t a i n .
From t h i s i t f o l l o w s t h a t a f o r e c a s t i s a judgement
t h a t can be made by anybody provided t h e y a r e competent
t o make judgement, whereas a budget i s an o r g a n i s a t i o n ' s
o b j e c t i v e t h a t may be s e t o n l y by t h e a u t h o r i s e d management.
Moreover, t h e announcement of a p l a n i s an i m p l i c i t
i n s t r u c t i o n t o employees t o work t o a c h i e v e t h a t o b j e c t i v e .
2.5 Budget p lann ing and Implementation f o & ~ f f e c t i v e Revenue Generat ion:
2.5.1 Budget Planning:
The concept of budget p lann ing i s a s 013 a s man
I n h i s t o r y we l e a r n t t h a t t h e e a r l y man had t o determine
whatever he needed i n advance before it even tua l ly
m a t e r i a l i s e d . This i s very obvious i n t h e p r s e n t days
i n t h e l i v e s o f i n d i v i d u a l s , a s t a t e o r a na t i on . As a
n a t i o n p l a n s ahead i n terms of revenue and expendi tu re
w i th in a s p e c i f i c per iod of t ime , s o an i n d i v i d u a l
a s t a t e concep tua l i s e s a n t i c i p a t e d revenue an3 d i sbu r se -
ment w i th in a s p e c i f i e d pe r iod of time.
Every e s t ab l i shmen t , be i t p u b l i c o r p r i v a t e , f i n d s
it neces sa ry t o p repa re budget and i n s t i t u t e budgetory
c o n t r o l f o r t h e purpose of t r a n s l a t i n g p o l i c i e s ; co-ordi-
n a t i n g a c t i v i t i e s a s wel l a s f i n a n c i a l c o n t r o l s i n o r d e r
t o ach ieve t h e b e s t p o s s i b l e r e s u l t s .
Before t h e beginning of every f i n a n c i a l y e a r , t h e
s t a t e Budget department i s expected t o send o u t what i s
r e f e r r e d t o a s " c a l l circular^^ t o e r e r y M i n i s t r y ,
Bepartment and p a r a s t a t a l s w i th in t h e s t a t e . The l l c a l l
c i r c u l a r , c o n t a i n s d e t a i l e d in format ion and g u i d e l i n e s
t o be fol lowed by m i n i s t r i e s , departments and p a r a s t a t a l s
i n t h e p r e p a r a t i o n and submission of t h e i r budget.
?. 6 CL,\rernrnerli- , r , cco~ ln t i r - i i i 151l~igeting Cont ro l -..--__.--I-. --
Accour~Ling f o r government and p u b l i c s e c t o r s o c i 0-
economic u n i t s i s a s o l d a s a c c o u n t i n g f o r p r i v a t e s e c t o r
o r g a n i s a t i o n s . Near ly a l l r e s o u r c e s , ene rgy and S o c i e t y l s
a t t e o t i on have heen ri 1 :.the t c:J t t h e t r a i n i n g and
t i e v e L o p ~ e r ~ t of p r i v a t e s e c t o r a c c o u n t i n g t o t h e n e a r
complete e x c l u s i o n of p u b l i c s e c t o r account ing . : to t h e
n e a r complete e x c l u s i o n of p u b l i c s e c t o r account ing .
Thi s si tua t i on i.s however more pronounced i n deve lop ing
cour i t r i e s . In N i g e r i a , e f f o r ' t s t o t r a i n and deve lop
p2~d ' f f ; i t ioners of p u b l i c s e c t o r accoun t ing a t p l a c e s l i k e , &,T% ; * , t . , q , . .3,*#,,,. !.,:I,. , ! I ' 8 , l i F ? I t * , 1 ? ? ) < , '4 l;)lbt.. 1 + ) ,. . h.;<WL4, w.e U f + ~ v r r s i ty cii'. lag&, and t h e t r e a s u r y schoo l
1 - . I t A
i.n L 1 ~ 3 3 s a r e r e l a t i v e l y r e c e n t ; ICAN, t h e p r o f e s s i o n a l &.[a& $ . !B
.I. bo$;. wi t h r e s p o n s i b i l i t y of r e g u l a t i n g accountancy p r a c t i - *'8 - t '
ses and l l c e r t i f i c a t i n g " q u a l i f i e d p r a c t i t i o n e r s h a s
o n l y j u s t i n t r o d u c e d t h e s u b j e c t of government a c c o u n t i n g
i n t o i t s examinat ion c u r r i c u l a . A s a r e s u l t of a l l
t h e s e , o n l y few " i n s i d e r s 1 ' can c la im t o unders tand
and f u l l y a p p r e c i a t e how government r e c o r d s a r e k e p t
and why. Whereas a p r o f e s s i o n a l l y q u a l i f i e d a c c o u n t a n t
can be p icked o f f t h e s t r e e t and be e n t r u s t e d w i t h t h e
a c c o u n t i n g work i n a p r i v a t e s e c t o r o r g a n i s a t i o n , t h e
same cannot be done i f h e i s r e q u i r e d f o r government
qccoun t ing work. A s a consequence, a h a r d l y r e c o g n i s e d
but; nevc:r t . i~e l ess i m p o r t a n t b a r r i e r t o e n t r y h a s been
c r e a t e d f o r t h e orthod'ox o r c o n v e n t i o n a l l y t r a i n e d a c c o u n t a n t . .
t h a t may d e s i r e t o work i n t h e c i v i l s e r v i c e . And t h i s exp la -
i n s why you may n e v e r f i n d an a d v e r t c a l l i n g f o r a p p l i c a t i o n
f o r t h e p o s t of an Accountant g e n e r a l of a S t a t e , whereas ,
f i r m s i n t h e p r i v a t e s e c t o r r e g u l a r l y a d v e r t i s e f o r f i n a n c i a l
c o n t r o l l e r , d i r e c t o r s o r heads of t h e accoun t ing d i v i s i o n s
o r f u n c t i o n s .
2.6.1 T h e Composition of Budget:
G e n e r a l l y , t h e main s o u r c e s of revenue t o a s t a t e a r e
t a x e s , f i n e s and f e e s , l i c e n c e s , e a r n i n g s and s a l e s , r e n t on
government p r o p e r t y , i n t e r e s t s and d i v i d e n d s and s t a t u t o r y
a l l o c a t i o n from t h e F e d e r a l Government. t h e v a r i o u s e a r n i n g s
a c c r u i n g from t h e s e s o u r c e s z o n s t i t u t e t h e c o n s o l i d a t e d fund ' 3
of Chey,+;f.zt.l:. The s t a t e budget i s broken down i n t o r e c u r r e n t )al$ !Q< yhr i revend':;. r e c u r r e n t e x p e n d i t u r e and c a p i t a l e s t i m a t e s ( c o n s i s t i n g
o f c a p i t a l r e c e i p t s and e x p e n d i t u r e ) .
: The r e c u r r e n t revenue g i v e n d e t a i l s of t h e e a r n i n g s
a c c r u i n g from v a r i o u s s o u r c e s o t h e r t h a n c a p i t a l r e c e i p t s .
he main s o u r c e s of r e c e i p t s a r e g iven c l a s s i f i c a t i o n code&/. '
revenue heads. A main revenue head i s s u b s e q u e n t l y broken
down i n t o sub-heads.
F o r e x a ~ n p l e , t a x e s a r e c1a : : s i f i ed a s main head i n t h e
budge t u n d e r t h e summary of r e v e n u e s h e a d s of t h e s t a t e
Hud;:et e s t i m a t e s . Then t h e v a r i o u s rnetho: ls o f c o l l e c t i n g
t a x e s a r e ,cl;iven sub-head's u n d e r t h e main ' leads. The o t h e r
s u b - h e a ' s u n d e r t a x e s a r e pay -as -you-ea rn , D i r e c t
a s s e s s m e n t , E n t e r t a i n m e n t t a x , Refund of t a x on I n v e s t m e n t ,
D i v i d e n d s from F e d e r a l Government , S a l e s t a x , t a x ~ l e r l u c t i on
from r e n t s , h o u s e s , p o o l s b e t t i n g t a x a n u t r a d e c a t t l e tax.
The r e c u r r e n t e x p e n d i t u r e of t h e s t a t e budge t a l l o c a t e s
c l a s s i f i c a t i o n c o d e s / e x p e n d i t u r u h e a d s t o m i n i s t r i e s , d e p a r t -
ments and p a r a s t a t a l s . The main e x p e n d i t u r e h e i ~ d o f t h e
s t a t e budge t a r e Government h o u s e , m i l i t a r y a d m i n i s t r a t o r ' s
o f f i c e , m i n i s t r y o f A g r i c u l t u r e and n a t u r a l r e s o u r c e s ,
M i n i s t r y o f Commerce, I n d u s t r y and t e c h n o l o g y , M i n i s t r y o f
Educa t i o n , M i n i s t r y of F i n a n c e and Economic Devel-opment,
M i n i s t r y o f H e a l t h , M i n i s t r y o f I n f o r m a t i o n and S o c i a l
Devcloprner~t , Youths , :<.ports and c u l t u r e , Mini :; t. r y of Ju:; t i c e ,
M i n i s t r y of l o c a l government and c h i e f t a i n c y affairs,
M i n i s t r y of Works and t r a n s p o r t , M i n i s t r y of Women A f f a i r s
e t c , o t h e r a r e : t h e o f ' f i c e o f t h e s t a t e a u d i t o r - g e n e r a l ,
c i v i l s e r v i c e commissl o n , T e a c h e r s S e r v i c e Boa rd , Depar tment
o f L a n . 4 ~ and S u r v e y and C o n s o l i d a t e d Revenue Board.
The p a r a s t a t a l s and Depa r tmen t s u n d e r t h e M i l i t a r y
A d m i n i s t r a t o r I s o f f i c e s u p e r v i s e s t h e s t a t e s t a t u t o r y Boa rds ,
c o r p o r a t i a n s and government owr-led compani e s . I t e n s u r e s
t h e i r n p l e n e n t a t i o n ' of government p o l i c i e s by o p e r a t i n g
w i t h i n t h e j u r i s d i c t i o n of t h e e d i c t e s t a b l i s h i m g them.
G r a n t s , c o n t r i b u t i o n s and s u b v e n t i o n s a r e made from t h i s
o f f i c e t o e s t a b l i s h o f f i c e s s u c h a s t h e S t a t e S p o r t s
C o u n c i l , U t i l i t i e s Board, Urban and R u r a l Development
funrls e t c . Some u n i t s and E s t a b l i s h m e r ~ t i n tile s t a t e a r e
u n d e r rtll .:varits m i r ~ i :; Lri e s .
The cc ip i t a l r e c e i p t s a r e made up by t r a n s f e r of f u n d s
from t h e c o n s o l i d a t e d r evenue f o r c a p i t a l p r o j e c t s ( c a p i t a l
Developmeat Fund) ; I n t e r n a l a n d / o r E x t e r n a l l o a n d s , g r a n t s
o r Development l o a n s t o c k s , c a p i t a l r e c e i p t s a r e u t i l i s e d
f o r c a p i t a l p r o j e c t s . I t i s t h e u t i l i s a t i o n o f t h e f i n a l s
a c c r u i n g from c a p i t a l r e c e i p t s t h a t a r e c l a s s i f i e d a s c a p i t a l
e x p e n d i t u r e .
2.6.2 Budget I ~ ; ~ p l e r n e n t a t i o n
M i n i s t r i e s , d e p a r t m e n t s arid para : ; t i , tiil:i :. ti1r.t u L i l i s i r l ~ :
t h e i r v o t e s immedia te ly t h e budget i s approved and s i g n e d
by t h e s t . 2 t e government i n t o law. I n t h e c a s e o f c a p i t a l
b u d g e t / v o t e c l e a r a n c e f o r c a p i t a l commitment s h o u l d b e
~ y r a n t ~ d a t t h e end of t h e f i r s t q u a r t e r of t h e a n n u a l
b u d g e t , e ~ c e p t i n n few s p e c i a l c - i se s i n te r rcs of n e c e s s i t y
and urgen.:y.
Pi n i s t r i e s d e p a r t m e n t s and p a r a s t a t h l s s h o u l d n o t b e
a l l o w e d t c exceed t h e i r a l l o c a t i o n s f o r t h e y e a r . If t h e y
r e q u i r e a d d i t i o n a l a l l o c a t i o n s , s u c h must be d i r e c t e d t o t h e
s t a t e bud,;et d e p a r t m e n t . The s t a t e budt;et d e p a r t m e n t c o u l d
a p p r o v e and r e l e a ~ ; e t h e r e q u i r e d f u n d s o r r e j e c t t h e
a p p l i c a t i c n dependency on t h e p e c u l i a r i t i e s of e a c h c a s e .
I n a d d i t i c n , v i r e m e n t s s h o u l , l n o t be pcrmi tc r i from one s u b
head t o a n o t h e r , e x c e p t s u c h a p p r o v a l i s g r a n t e d by t h e s t a t e
Budget d e p a r t m e n t .
tJn:!er t h e s e l f a c c o u n t i n g sys t em o f t h e c iv i . 1 s e r v i c e
rcforrn o f 1988, m i n i s t r i e s , clepar-tmunt..; ; i l l t l p ; ~ r * i : ; t ; ) tii1.s a r e
a l l owed t o make d i s b u r s e m e n t s from t h e a l l o c a t i o n / v o t e s b u t
t h e r e must be s t r i c t a d h e r e n c e t o t h e i r p a y i n g a l l c o l l e c t e d
r e c e i p t s i n t o t h e c o n s o l i d a t e d Revenue fund .
2.6.5 Budget f o r E f f e c t i v e Revenue g e n e r a t i o n
A t)urll;.zt can be ;tn e f f e c t i v e t o o l for rt,vc:ntcc! r:c!nerat i on
i f i t i s p r o p e r l y p r e p a r e d w i t h r e a l i s t i c s t a t i s t i c a l d a t a .
M i n i s t r i e s , Depa r tmen t s and p a r a s t n t a l s s h o u l d be r e q u e s t e d
t o m a i n t a i n w e l l k e p t a r c h i v e s f o r t h e i r r e c o r d s .
I n a s i t u a t i o n where s t a t i s t i c a l r e c o r d s a r e n o t p r o p e r l y
m a i n t a i n e d , i t can r f , s u l t i n u n r e a l i s t i c b u d g e t e s t i m a t e s
when s u c h d a t a a r e e v e n t u a l l y u t i l i s e d f o r budge t p l a n n i n g
and e v a l u a t i o n .
A t th? b e g i n n i n f r o f e v e r y f i s c a l y e a r , government s h o u l d
come up w i t h r e a l i s t i c and f u n c t i o n a l p o l i c y o b j e c t i v e s t o
be p u r s u e d d u r i n g t h e y e a r s u c h p o l i c y o b j e c t i v e s h o u l d be
c o n s i s t e n t s o t h a t bud,get e x t i m a t e s based on them can be
removably e v a l u a t e d a s t o t h e r e q u i r e d o b j e c t i v e s .
Cover f~ment s h o u l d d e v i a t e from t h e h a b i t o f s u d d e n l y
chang ing i t s p r i o r i t i e s d u r i n g t h e y e a r r e s u l t i n g i n t h e
d i v e r s i on of f u n d s o r i g i n a l l y a l l o c a t e c l t o : i l~cci f ic p r o J c c t u
t o t h o s e c o n c e i v e d mid-s t ream d u r i n g t h e f i s c a l Tea r . T h i s
app roach makes t h e m o n i t o r i n g budge t e s t i m a t e s d i f f i c u l t a s
a b a s l s f o r a s s e s s i n g t h e a t t a i n m e n t o f g i v e n 0 b j e ~ t l ~ e S .
T n e r e i s a l s o t h e t e n d e n c y f o r u n d e r - a l l o c a t i o n o f f u n d s t o
s p e c i f i c p r o j e c t s d u e t o i n a d e q u a t e knowledge of t h e f i n a n c e
r e q u i r e m e n t s . I n o r d e r t o a v o i d t h i s t y p e o f s i t u n t i o d .
government; s h o u l d - c a v y o u t f e a s i b i l i t y s t u d i es a b o u t
p roposed p r o j e c t s b e f o r e t h e y a r c embarked upon s o t h a t
w a s t e f u l v e n t u r e s can be min imiscd i f riot e l i m i n a t e d c o m p l e t e l y .
2.7 Managtment C o n t r o l i n t h e P u b l i c S e c t o r
M:~nagement C o n t r o l i n i t s b r o a d e s t c o n t e x t i s t h e means
by which a n o r g a n i s a t i o n c a r r i e s o u t i t s o b j e c t i v e s e l ' f e c t i -
v e l y ilnd e f f i c i e n t l y . P u b l i c s e c t o r o r g a n i s ; ~ t i o n can
g e n e r a l 1 y be d i s t i n g u i s h e d a:; h a v i n g hi e r a r c l l i :a1 s t r u c t u r e s
composed o f r e s p o n s i b i l i t y c e n t r e s , u n i t s , s e c t i o n s ,
d e p a r t m e n t s and d i v i s i o n s . Excep t a t t h e u n i t l e v e l , e a c h
r e s p o n s i b i l i t y c e n t r e c o n s i s t s o f a g g r e g a t i o n s o f s m a l l e r
r e s p o n s i b i l i t y c e n t r e s . The f u n c t i o n o f e x e c u t i v e management
i s t h e r e f o r e t o p l a n , c o - o r d i n a t e and c o n t r o l t h e work o f
r e s p o n s i b i l i t y c e n t r e s . Accord ing t o Anthony R.N. and Young
2 . D. W. 198l1 I n management c o n t r o l i n l gon-p ro f i t o r g a n i s a t i o n
a r g u e " T ~ P b a s i c c o n t r o l c o n c e p t s a r e t h e same i n p r o f i t
o r i e n t e d : ~ n d nor1 p r o f i t o r g a n i s a t i o n tu t. bcc;~uuc: ( J ! ' ttrc
s p e c i a l c h a r a c t e r i s t i c s o f n o n - p r o f i t o r g a n i s a t i o n s , t h e
a p p l i c a t i o n of t h e s e c o n c e p t s d i f f e r i n some i m p o r t a n t
The c o n t r o l s t r u c t u r e o f any o r g a n i s a t i o n c o n s i s t s by and
l a r g e of a d e f i n i t i o n o f t h e r e l a t i o n s h i p s be tween
c o n t r o l l a b i l i t y and r e s p o n s i b i l i t y , o r mo-re p r e c i s e l y a
s p e c i f i c a t i o n o f which managers a r e r e s p o n s i b l e f o r which
r e s o u r c e s i n t h e o r g a n i s a t i on. ' d h i l e e v e r y o r g a n i s a t i o n
e x i s t s t o c a r r y o u t v a r i o u s programmes, i t i s n o t n e c e s s a r i l y
t h e oase t h a t t h e r e s p o n s i b i l i t y s t r u c t u r e m a t c h e s t h e
programme s t r u c t u r e . z
Accord ing t o ~ n t h b n ~ and Young 1984' d e f i n e a programme
a s some definable a c t i v i t y o r g r o u p o f a c t i v i t i e s t h a t t h e
o r g a n i s a t i o n c a r r i e s o n , e i t h e r d i r e c t l y i n o r d e r t o
a c c o m p l i s h t h e o r g a n i s a t i o n ' s o b j e c t i \ ?s o r i n d i r e c t l y i n
s u p p o r t of o t h e r programme e l e m e n t s " . Each programme i s
i s o p e r a t e d by a g r o u ? of p e o p l e a l l work ing t o w a r d s some
o r g a n i s a t i o n a l o b j e c t i v e and headed by a manager who i s
r e s p o n s i b l e f o r t h e i r a c t i o n s .
Also a c c o r d i n g t o Anthony and Young 1 9 8 4 ~ s u g g e s t t h a t
t h e r e a r e f a i r p r i n c i . p a 1 components t o a f o r m a l management
p r o c e s s programming. budge t f o r m u l a t i o n o p e r a t i n g ( a n d
me . s u r i n g ) r e p o r t i n g and e v a l u a t i o n .
Programming, t h e f i r s t ;:tllge i s conlpo:;ed of Live s t e p s :
i 1. I n i t i a t i o n ( 2 ) s c r e e n i n g ( 3 ) A n a l y s i s ( 4 ) d e c i s i o n and
( 5 ) s e l l i n g . I n o r d e r t o e n c o u r a g e t h e i n t e r n a l g e n e r a t i o n ,
of i d e a s , s e n i o r management must p r o v i d e c l e a r mechanism
f o r b r i n g i n g i d e a s t o t h e i r a t t e n t i o n . I d e a s o n l y f i n d
f a v o u r oncz an i n f l u e n t i a l p e r s o n h a s been c o n v i h c e d o f t h e i r
p r a c t i c a t i l i t y . O b v i o u s l y i t i s n e c e s s a r y t o s c r e e n i d e a s
t o i n c l u d e w h e t h e r t h e y a r e c o m p a t i b l e w i t h t h e o b j e c t i v e s
of t h e ~ r ~ y a n i s a t i o n . T h e r e a r e two a s p e c t s of t h i s a n a l y s i s ;
t e c h n i c a l and p o l i t i c a l . A p o l i t i c a l ar1;ily:;i:; i n v o l v c s
e s t i m a t i n g t h e c o s t s o f a p r o p o s e d programme, a t t e m p t i n g t o
q u a n t i f y i t s b e n e f i t s , and i f f e a s i b l e a s s e s s i n g a l t e r n a t i v e
ways of c a r r y i n g i t o u t . A p o l i t i c a l a n a l y s i s , i n a non-
p a r t y s e n s e i n v o l v e s c o n s i d e r a t i o n o f how t h e p r o p o s a l i s
l i k e l y t o b e viewed hy t h e p a r t i e s who t i r e a f f e c t e d by i t ,
i n p r i r t i c u l n r t h e r e s o u r c e p r o v i d e r s . l 'he f i n a l s t e p i s t o
s u b m i t t h e p r o p o s a l t o s e n i o r managema:nt f o r a d e c i s i o n on
i t s a c c e p . t a b i l i t y , u s u a l l y a p r o p o s a l w i l l b e composed o f a . .
number of v a r i a n c e s r a t h e r t h a n a s i n g l e t a k e - i t - o r - l e a v e - i t
p r o p o s i t i o n .
A c c o r d ~ n g t o I . 9. J o h n s o n 5 , t h o bud[;et p r o v i d e s t h e
e s s e n t i a l l i n k be tween t h e impor t r i n t e l e m e n t o f programming
and operation. I t i s a s t a t e m e n t t h a t e x p r e s s f u t u r e p l a n s
i n f i n a n c i ; : i l t e r m s ; t h e y become f i r m comrnitmcnt f o r which
f u n d s have been a l l o c a t e d . I t a l s o p r o v i d e s a b a s i s f o r
e ~ n l u n t i n ~ : p e r f o r m a n c e . Acco rd ing t o Wil d n r s k y . A. (1975)
i n t lRurlget ingt t . A c o m p a r a t i v e t h e o r y o f budgc?tory p r o c e s s e s , #
d e s c r i b e s b u d g e t i n g a s I t a t t e m p t s t o a l l o c a t e f i n a n c i r l r e s o u r c e s
t h r o u g h p o l i t i c a l p r o c e s s e s t o s e r v e d i f f e r i n g human pu rposes l1 .
Budge t s a r e g e n e r a l l y o f two t y p e s - t h e r e v e n u e b u d g e t
and t h e c a p i t a l budge t . The r e v e n u e b u d g e t s a r e o f t e n r e f e r r e d
t o as l i n e - i t e m b u d g e t s . T h a t i s b u d g e t s which f o z u s on
e x p e n s e e l r t rncr~ ts s u c h a s s a l a r i e s , m a t e r i i ~ l s i ~ r ~ d o t h c r
consumablcs r a t t l e r t h a n on t h e r e a s o n f o r t h e e x p e n d i t u r e .
The t r a d i t i o n a l b u d g e t c o n t i n u e s t o s e r v e i t s o r i g i n a l
p u r p o s e s ; { :ha t o f e n s u r i n g c o m p l i a n c e w i t h t h e c o n d i t i o n s e t
o u t i n a p p r o p r i a t i o n s . T r a d i t i o n a l l i n e - i t e m budl;eti ng e x i s t s
b e c a u s e :
i . I t i s a n i d e a l mechanism f o r l i n i i t i , ,; expend i t u r c t o t h e
arr:ounts and t o t h e i t e m s v o t e d i n t h e a p p r o p r i a t i o n s .
ii. I t p r o v i d e s f l e x i b i l i t y when a c r o s s t h e k o a r d c o s t s h a v e
t o be made f o r macro-economic p u r p o s e s .
iii. I t i s a f a i r l y u n c o m p l i c a t e d sys t em t f , a t a v o i d s any c o n f l i c t s
a b o u t o h j e c f . i v e s a n 3 sthe methods o f aclii e v i n g them,
p a r t i c u l a r l y when budge t p r e p a r a t i o n f o l l o w s a " t i g i t I t
t ime t a b l e .
s i t u a t i o n s .
I d h i l s t many new i d e a s have been promoted f o r b u d g e t o r y
r e fo r r c , i t r e m a i n s t h e c a s e t h a t t h e y have i : ene ra l ly f a i l e d .4
t o g a i n \-;enera1 a c c e p t a n c e .
Accord ing t o J o n e s and P e n d l e b u r y ( 1 9 0 4 ) ~ ~ t h e
t r a d i t i o n a l l i n e i t e m b u d g e t h a s t h e f o l l o w i n g d e f e c t s
i. t h e budge t i s s u b d i v i d e d on t h e b a s i s o f d e p a r t r e n t o f
a c t i v i t y c e n t r e s e a c h o f which may o p e r a t e s e v e r a l programmes
e i t h e r i n d i v i d u a l l y o r a s j o i n t v e n t u r s e s .
i i . I t i r, u s u a l l y drawn up a s , an a n n u a l b;i:ii s b y co r~ ip i l r i n~ ; thc:
p r e v i ous y e a r s e x ~ e n d i t u r e and addink; i n c r e m e n t s o r p e r h a p s
iii. Thl r e i s a n a t u r a l t e n d e n c y when d e a l i n g w i t h i n p u t s on an
increnlcn t a l b a s i s , by compar ing t h e p r e v i o u s y e a r t s
e x p e n d i t u r e and ba:..is t o f a v o u r e x i s t ng prot;;-*ammes, new
pro&rlnrnrtes have t o compete w i t h e a c h o t h e r f o r l i m i t e d
r e sou rce : ; r e g a r d l e s s o f t h e i r p r i c r i t y .
i v . C o n t r o l i s p r i m a r i l y e x e r c i s e d on t h e b u d g e t i n p u t s
r a t h e r t h a n i t s o u t p u t s i e i t p r o v i d e s d a t a on what
government consumes r a t h e r t h n n d a t a a b o u t what
goverr;.nent d o e s o r the p u r p o s e s f o r which money
i s s p t ' n t .
e; A z c o r d i n g t o W i l d a r s k y , A (1975) i n "Uudget ing : A
c o n p ; ~ r , i t i v e i.hcory o f budi:ctory p r o c e s s , : : t i ~ t c : ; : I t i t i s
n o t s o much t h a t t r a d i t i o i ~ a l b u d g e t i ng s u c e c d s b r i l l i a n t l y
on e v e r y i n t e n t i o n b u t t h a t i t d o e s n o t e n t i r e l y f a i l on
any o n e t h a t i s r e s p o n s i b l e f o r i t s l o n g e r i t y l l . I '
Y o s t p u b l i c s e c t o r o r ~ a n i s r 3 t . i o n s a t t e m p t t o make n c l e a r
d i s t i n c t i o n between items o f a r e v e n u e cr- r e c u r r e n t
n a t u r e and items o f a c a p i t a l n a t u r e . Acco rd ing t o t h e
c h a r t e y e d i n s t i t u t e o f p u b l i c f i n a n c e and A c c o u n t i n g ' s
p u b l i c a t i o n l o e a l a u t h o r i t y ': A c c o u n t i n g p r i n c i p l e s 1985
p roposG2s t h e f o l l o w i n g r u l e f o r i d e n t i f y i n k ; c a p i t a l
expenrli t u r e : Any o u t l a y which i s of v;llut! t o thct n u t h o r j t y
i n t h e p r o v i s i o n o f t h e s e s e r v i c e s beyond t h e end o f t h e
y e a r oC a c c o u n t s h o u l d b e r e c o r d e d a s a c a p i t a l a s s e t ,
p r o v i d e d t h e r e i s no l e g a l c o n t r a i n t . -
W n l l s t new c a p i t a l a s s e t , s u c h a s bui1dinl:s c l e a r l y
p r a v i d e b e n e f i t s beyond o n e f i s c a l p t l a r , c e r t a i n s i t u a t i o n s
can a r i s e when s u c h a c l a s s i f i c a t i o i s l e s s o b v i o u s .
Expendi turc: on r e p a i r i n g and m a i n t a i n i n g c a p i t a l a s s e t s
r ema in a t ~ t s p r e s e n t s t a t e and s h o u l d t h e r e f o r . ; b e t r e a t e d
a s r evenue . On t h e o t h e r hand , t h e r e p a i r s and m a i n t e n a n c e
migh t r e s ~ 1 . t i n improvements t o t h e a s s e t o r even a n e f f e c t i v e
r e p l a c e m e n t of t h e a s s e t and s o m i g h t p r o p e r l y be t h o u g h t
of a s a c a p i t a l , The f u n d i n g o f c a p i t a l e x p e n d i t u r e i s
u s u a l l y s p r e a d o v e r t h e y e a r s t h a t b e n e f i t w i l l o c c u r .
Acco rd ing t o t h e c h a r t e r e d i n s t i t . 1 ~ 1 . c o f rnlb'loc f in ; inc t :
an3 Accountancy (1977) l o , r e s e a r c h r e p e a t c a p i t a l b u d g e t i n g
h a s i d e n t i f i e d t h e fo l . l owing o b j e c t i v e o f c a p i t a l b u d g e t i n g :
1. To e x p r e s s i n f i n a n c i a l terms c a p i t a l works n e c e s s a r y t o
meet o b j e c t i v e s e x p r e s s e d o r i m p l i e d o f a n o r g a n i s a t i o n
w i t h i n a n a c c o u n t i n g p e r i o d o r p e r i o d s .
2. To s e t o u t t h e a g r e e d p r i o r i t i e s o f c a p i t a l schemes
3, To f a c i l i t a t e c o - o r d i n a t i o n of B l a n s and r e s o u r c e s by:
a. A l l o c a t i n g t h e f i n a n c i a l r e s o u r c e s betwecn d e p a r t m e n t s
b. /\:;:;is t.i ni; i n the imp1 c n i o n t a t l o n of' citpl l . , l l s c t ~ c w u ~
c. P r o v i d i n g a b a s i s f o r f o r e c a s t i n g c a p i t a l c a s h f l o w s and f i n a n c i a l r e q u i r e m e n t s ;
d m P r o v i d i n 2 a b a s i s f o r b u d g e t i n g c o n t r o l o f o u t t u r n a g a i n s t
f o r e c a s t ; and
e . P r o v i d i n g a b a s i s f o r f o r e c a s t i n g r e v e n u e i m p l i c a t i o n s
f . To s a t i s f y i:overnment c- .ontrol r equ i r emen t :i.
T h e f f L n a l two zoml,onents i n any sys t em o f f o r m a l
management c o n t r o l i n v o l v e s m e a s u r i n g t h e r e s o u r c e s
consumed idnd r e p o r t i n g t h e r e o n t o rnana[;mcnt s o t h a t t h e y
c a n i n v e s t i g a t e a d v e r s e v a r i a n c e s and i n i t i a t e c o r r e c t i v e
a c t i o n . Accoun t in2 l n f o r r n a t i o n s h o u l d where p o s s i b l e be
supplemenxed w i t h a v a r i e t y of o t h e r i n f o r m a t i o n . R e p o r t s
s h o u l d p r o v i d e u s e f u l i n f o r m a t i o n f o r c v n l u n t i o n s b o t h
management and programmes. The e v a l u a t i o n of p e r f o r m a n c e
can r e s u l t i n a r e v i s i o n of a programme o r a r e v i s i o n o f t h e
budget o r a m o d i f i c a t i o n o f o p e r a t i o n . I t c a n a l s o l e a d t o
a r e c o n s i : l o r a t i o n o f t h e o r i ; a n i s a t i o n l s s t r a t e d i e s f o r
a c h i e v i n g i t s g o a l s .
The c o n t r o l s t a g e s o f t h e management p l a n n i n g and
c o n t r o l c y c l e b e g i n w i t h t h e b u d g e t c o n t r o l l i n g , m e a s u r i n g ,
r e p o r t i n g and ana lys i . ng f e e d b a c k .
2.8 Summary of L i t e r a t u r e Review
C t . r ~ e r a l l y t h e wain s o u r c e s o f r e v e n u e t o a s t a t e a r e
t a x e s , f i n e s and f e e s ; l i c e n s e s , e a r n i n g s orld sa l e s , r e n t
on govc r r~men t p r o p e r t y , i n t e r e s t s and d i v i d e n d s and
s t a t u t o r y a l l o c a t i o n from t h e F e d e r a l Government. The
v a r i o u s e a r n i n g s a c z r u i n g from t h e s e s o u r c e s c o n s t i t u t e t h e
c o n s o l i d a t e d fund o f t h e s t a t e . The s t a t e b u d g e t i s b roken
down i n f o r e c u r r e n t e s t i m a t e s c o n s i s t i 1 ; g of c a p i t a l r e c e i p t s
and e x p e n d i t u r e of t h e e a r n i n g a c c r u i n g frnm v a r i o u s s o u r c e s
o t h e r t h a n c a p i t a l r e c e i p t s , t h e main s o u r c e s o f r e c e i p t s
a r e g i v e n c l a s s i f i c a t i o n c o d e s / r e v e n u e heads . A main
r e v e n u e head i s s u b s e q u e n t l y b roken down i n t o s u b heads .
F o r example t a x e s a r e c l a s s i f i e d a s a main head i n
t h e bu,lgc'l: u n d e r t h e sumrnary o f Revenue h e a d s o f t h e
s t a t e budge t E s t i ~ a t e s . Then t h e v ; l r i o u s methods o f
c o l l e c t i n g t a x e s a r e : l iven s u b he;~.?r; u n d e r t a x e s a r e pay-As-
l- earn, D i r e c t A.';::essment, Entertainment -tax. 3 e f u n d o f t ; lx
on I n v e s t m e n t , D i v i d e n d s f rom F e d e r a l Government s a l e s t a x ,
t a x d e i u c t i o n from r z n t e d h o u s e , p a d s b e l t i n g t a x and
t r a d e c a t t l e t a x .
The r e c u r r e n t e x p e n d i t u r e o f t h e s t a t e budge t a l l o c a t e s
c l a s s i f i z a t i o n codes / expend i t u r e h e a d s t o mini s t r i e s ,
d e p a r t m e n t s and p a r a s t a t a l s .
The z a p i t a l r e e e i p t s a r e msde u p of t r a n s f e r o f f u n d s
from t h e c o n s o l i d a t e d Revenue f o r c a p i t a l p r o j e c t ( c a p i t a l
Developrner~t Fund) , I n t e r n a l and F x t e r n a l l o a n g r a n t s o r
devcloprnent l o a n s t o c k s . C a p i t a l receipts o r e u t i l i s e d
f o r c a 2 i t a l p r o j e c t s , i t i s t h e u t i l i s a t i o n o f t h e f u n d s
a c z r u i n g from c a p i t a l r e c e i p t s t h a t a r e c l a s s i f i e d a s c a p i t a l
Expendi tu r ' e .
Imple::!entation
Mi~ni s t r i e l ; , d e p a r t m e n t s and p : t r : i s t a t a l s s t a r t u t i l i s i n g
t h e i r v o t e s i m m e d i a t e l y t h e b u d g e t i s approved and s i g n e d
by t h ~ . s t a t e a d m i n i s t r a t o r i n t e r law. I n t h e c a s e o f
c a p i t a l b u d g e t / v o t e c l e a r o n c e f o r c a p i t a l commi t m e n t
s h o u l d b e g r a n t e d a t t h e end of t h e f i r s t q u a r t e r on t h e
a n n u a l b u d g e t , e x c e p t i n a few s p e c i a l c a s e s i n t e r m s o f
n e c e s s i t y and urgency .
P i n i s t r ies, d e p a r t m e n t s and p a r a s t a t a l s s h o u l d n o t be
a l l o w e d tc- exceed t h e i r a l l o c a t i o n s or t h e y e a r . I f t h e y
r e q u i r e a d d i t i o n a l a l l o c a t i o n s , s u c h must b e d i r e c t e d t o
t h e s t a t e Budget Depar tment . The s t a t e b u d g e t d e p a r t m e n t
c o u l d a p p r o v e and r e l e a s e t h e r e q u i r e d f u n d s o r r e j e c t t h e
a p p l i r a t i o n d e p e n d i n g on t h e p e c u l i a r i t i e s of each c a s e .
I n a d d i t i o n , v ivement s h o u l d n o t be p e r m i t t e d f rom one
sub-head t o a n o t h e r e x c e p t s u c h a p p r o v a l i s g r a n t e d by t h e
S t a t e Budget Depar tment .
Under t h e s e l f - a c c o u n t i n g sys t em of t h e c i v i l s e r v i c e
r e f o r m o f 1938, M i n i s t r i e s , D e p a r t m e n t s and p a r a s t a t a l s a r e
a l l o w e d t o make d i s b u r s e m e n t s f rom t h e a l l o c a t i o n / v o t e s
b u t t h e r e mus t b e s t r i c t a d h e r e n c e t o t h e i r p a y i n g a l l
c o l l e c t e d r e c e i p t s i n t o t h e c o n s o l i d a t e d . r e v e n u c fund .
Budgetory C o n t r o l :
A f t e r t h e f o r m u l a t i o n o f government p o l i c y i n terms of
b o t h l o n g r a n g e p l a n s and s h o r t r a n g e p l a n s , c o - o r d i n a t i o n
i s c a r r i e d o u t by means o f a sys t em o f 3nnua l budge t s . The
p r i n c i p l e s beh ind b u d g e t a r y c o n t r o l a! e q u i t e s i m p l e and
c a n be sumrriarised a s f o l l o w s :
a. p l a n and c o - o r d i n a t e t h e v a r i o u s a c t i v i t i e s o f gove rnmen t ;
b. measure a c t u a l p e r f o r m a n c e ;
c . compare t h e a c t u a l p e r f o r m a n c e w i t h t h e p l a n i e t h e t a r g e t
s e t o u t i n t h e budk , e t ;
d . a n a l y s e by c a u s e s t h e d i f f e r e n c e be tween t h e a c t u a l
r e s u l t and t h e budge t ed f i . : u r e ;
e. Take a p p r o p r i a t e a c t i o n ; i n o r d e r t o improve a c t u a l
p e r f ormnnce i n f u t u r e a n d / o r t o r cv i sc t t h e 1,l ijnned bud/l;r,t.c~*~ f i [ ; u r - a s i f Lhi s 1:; c o r i : : i r l c - ~ ' l - ~ l nctcc:: : . ; t r y .
The e s t a b l i s h m e n t o f d e p a r t m e n t a l b u d g e t s r e l a t i n g
t h e r e s p o n s i b i l i t i e s o f e x e c u t i v e s t o t h e r e q u i rerrrcnts
I o f a p o l i c y and t h e c o n t i n u o u s compar i son o f a c t - u a l w i t h
budp,ete3 r e s u l t s , e i ~ h e r t o s e c u r e a n i n d i v i d u a l a c t i o n ,
t h e o b j e c t i v e o f t h a t p o l i c y i s t o p r o v i d e a b a s i s f o r
i t s r e v i s i o n .
T h e r e f o r e t h e o b ' j e c t i v e s o f b u d g e t a r y c o n t r o l are:
I . P l a n and c o n t r o l income and e x p e n d i t u r ~ e i n o r d e r t o
a c h i e v e rnaximurn r e s u l t .
2. Ensu re t h a t s u f f i c i e n t f u n d s a r e made a v a i l a b l e f o r t h e
e f f i c i e n t o p e r a t i o n o f government .
3. D i r e c t cLdpi t o 1 o x p e r ~ d l t u r e t o Lkc rno:; t r s e s u 1 t o r i e n t e d
d i r e c t i o n .
4. C e ~ i t r a l i s a t i o n o f c o n t r o l .
5. ! l e c e n t r a l i s : i t i o n o f a u t h o r i t y
6. P r o v i d e 3 y a r d s t i c k akyainst which a c t u a l r e s u l t s may be
compared.
7. Show rnznage r i a l a c t i o n when needed t o remedy a s i t u a t i o n
8. Aid rnsriagement i n d e c i s i o n making when u n f o r s e e n
c o n d l t i , o n s a f f e c t t h e budge t
9. C o - o r d i n a t e a l l t he a c t i v i t i e s o f t h e Covcrnment f o r
t h e yclar i n q u e s t i b n .
10. C o r b i n e t h e i d e a s o f a l l l e v e l s of rn~nogercent d u r i n e
budge t p r e p a r a t i on.
S h o r t Comings
Lookirig a t b o t h p a s t and p r e s e n t b u d g e t s o f b o t h
\ s t a t e and F e d e r a l Government o f N i g e r i a , t h e b u d g e t s
#
ou[;ht t;o a c h i e v e t h e f o l l o w i n g o b j e c t i v e s i n a n u t s h e l l :
i. Thc a r r e s t o f t h e d e c l i n e o f t h e N i c e - i a n economy t h a t
had become a f e a t u r e o f t h e l a s t few y e a r s ;
ii. The c r e a t i o n o f more s t a b l e measure-economic c l i m a t e
t h r o u g h a n emphas i s on f i s c a l d i s c i p l i n e and a b a l a n c e d
bud/:et.
The d e c r e e t o which t h e s e o b j e c t i v e s h a v e been a c h i e v e d
i s one o f t h e s u b , j e c t o f t h i s r e s e a r c h work on budge t
and b u d g e t a r y c o n t r o l sys tem.
Tht? l a c k o f s u z c e s s i n t h e ach ievemen t o f t h e a ims
o f government had become a p p a r e n t 2 e a r l y a s a few y e a r s
a f t e r Ni .ger ian I n d e p e n d e n c e i n 1 9 6 ~ . T h i s s i t u a t i o n
i s p r n v a l e n t i n b o t h F e d e r a l and S t j t e gove rnmen t s s i n c e
i ndependence . The economy r ema ined d e p r e s s e d and t h e
p rob lems o f t h e p r o d u c t i v e s e c t o r more p r o m i n e n t y e a r by
y e a r .
Such a s i t u a t i o n i n d i c a t e d a need f o r a d r a s t i c re -app-
r a i s a l of t h e o r i g i n a l b u d g e t f e a t u r e s a n d p o s s i b l y t h e
u n d e r l y i n g p h i l o s o p h y on which i t was b s s e d . U n f o r t u n a t e l y
s u c h a r e - e x a m i n a t i o n o f t h e s i t u a t i o n d i d n o t o c c u r and
no c o r r e z t i v e m e a s u r e s were i n t r o d u c e d .
I t h a s become o b v i o u s t h a t t h e t y p e o f r e g u l a t i o n t h a t
government h a s imposed on t h e economy y e a r by y e a r h a v e had
a n a d v e r s e e f f e c t on t h e economy and r e s u l t e d i n m a s s i v e
budge t d e f i c i t s , each. y e a r . The r a t e o f - i n f l a t i o n , which
was a p i v o t a l e l e m e n t i n t h e s u c c e s s o r f a i l u r e of t h e budt;et
m e a s u r e s had f a i l e d w o e f u l l y t o s t a y w i t r ~ i n tile 15% t a r g e t
deemed n e c e s s a r y f o r s u c h s u c c e s s .
L a r g e b u d g e t d e f i c i t s i n d i c a t e p o o r c o n t r o l and may
be due t o d i r e c t r e s u l t o f p o o r p l a n n i n , ; and i n a d e q u a t e
budge t irr~plerrrc.ntation p r o c e d u r e s dc.pictt: .l i n o u r bu:l$ctilr-y
sys t em. T 5 e r e i s a l r e a d y a s u b : : t a t i a l and i n many r e s p e c t s
u n a c c e p t a b l e d e f i c i t t h a t had a r i s e n as r e g a r d s t h e p a s t
arlci pr-(asen t b u d g e t s u n d e r s t u d y .
Covcrnment s t ~ o u l d r e a l i s e t h a t t h e i ~ r o b l e m s t h a t h a v e
been i d c c t i f i e d a r e s t i l l b e i n g r e l e v a n t t o b u d g e t a r e
s e r i o u s or.es. They a r e p rob lems t h a t r e q u i r e d r a s t i c
s u r g i c a l inensures t o c o r r e c t and government must h a v e
t h e w i l l t o e f f e c t c h a n g e s t h a t a r e n e c c s s n r y .
One o f f h a ma jo r r e q u i r e m e n t s f o r improvement w i t h i n t h e
s t a t e t2conomy i s i n c r e j ~ s e d i n v e s t m e n t . The p r e f e r r e d
t y p e o f i i ~ v e s t m e n t i n t h i s c a s e s n o u l d ue i n t h e form o f
e q u i t y i > a r t i ~ i p a t i ~ n .
The i m p o r t a n c e of a c c o u n t a b i l i t y and tl-;lnsn;i:i:;i on i n t h e
formu1:it i o n and e x e c u t i o n o f econorni c p o l i c y c i~ r i r~o t be
o v e r e o p h a s i s e d . C o n f i d e n c e on t h e p a s t human env i ronmen t
o f t h e n a t i o n ' s economic l i f e i s a c r u c i a l f a c t o r i n t h e
1C . government i m p l e m e n t a t i o n o f a l l i i s p c c t s o f government 1
p o l i c y . Such c o n f i d e n c e must b e e a r n e d and t h i s can o n l y
r e s u l t from a b e l i e f i n gove rnmen t , e s t a b l i s h e d from a
b e l i e f i n t h e p r o b i t y o f s e n i o r o f f i c i a l s and t h e
i n t e g r i t y o f t h e u n d e r l y i n g a s s u m p t i o n s on w11i e h s u c h
p o l i c i c s a r e based p e r i o d i c and r e g u l a r r e p o r t s on government
a c t i v i t i c r , and t h e r e s u l t s r e a l i s e d by t h e implementation
of budge t p r o p o s a l s h o u l d b e made r e a d i l y a v a i l a b l e .
CHAPTER THREE '
3.1 C l a s s i f i c a t i o n . o f Data :
We h a v e two b r o a d d i v i s i o n s of lists
1. P r l m a r y d a t a
2. S e c o n d a r y d a t a '
P r i m a r y d a t a a r e t h o s e o b t a i n e d by t h e r e s e a r c h e r .
They a r e c o l l e c t e d f o r t h e f i r s t tirnc f o r u s e i n
solvirq: b u s i n e s s p rob lems . T h e y a r e c r e a t e d o r c s t n b l l . s h c d . .
t h r o u g h f i r s t hand r e s e a r c h , t h r o u g h e x p e r i m e n t s and o r
u s i n g s u c h t o o l s and methods a s q u e s t i o n n a i r e and s u r v e y s .
They a r e q u i t e o r i g i n a l ; t h a t i s , t h e r e s e a r c h e r i s t h e 4
f i r s t t o u s e them.
S e c o n d a r y d a t a a r e e x t r a c i e d from o t h e r s o u r c e s ,
v e r y o f t e n t h e y had i l r e a d y been p u l . l i s h c d i n p e r i o d -
i c a l s , a l m a n a c s , y e a r book , magriz incs o r a b s t r a c t s .
3.2 C o l l e c t i v e o f ~ r i m a r v d a t a :
T h e r e a r c u:;ually two m.thorl:.;. G r ~ e C : I ~ I u : ; ~ L A
c o m p l e t e c o u n t o f a l l items o r a s e l e c t i o n o f t h e p a r t s ,
o f t h e e n t i r e i t e m s , c o m p l e t e c o u n t o r e n u m e r a t i o n i s
c a l l e d a c e n s u s . The N i .ge r i an c e n s u s o f p o p u l a t i o n
where e v e r y I i i g c r i a n i s coun ted i s an exarnple. A p a r t i a l
e n u m e r a t i o n i s comrr!only c a l l e d a snaiple. A sarnple i s
o n l y :> p a r t o f t h e t o t a l i t e m s o r s u b j e c t .
Lapin (1975:a). s e e s "a s t a t i s t i c a l p o p u l a t i o n a s t h e
c o l l e c t i o n of a l l p o s s i b l e o b s e r v a t i o n s o f a s p e c i f i e d
c h a r a c t e r i s t i c of i n t e r e s t " . A p o p u l a t i o n i s made up
of u n i t s ( c a l l e d e lementa ry u n i t s ) t h a t p o s s e s t h e
c h a r r i c : t e r i s t i c b e i n g s t u d i e d .
i s s e c u r e d by means of a sample , which i s a c o l l e c t i o n
o f o n l y some o f t h e elernents o f a t a r g e t p o p u l a t i o n .
The r e a s o n why samples a r e used a r e a s f o l l o w s :
Economy
ii. The t ime f a c t o r
iii. Des t ; rucI: iveness
i v . Accuracy
v. D e f i n i t e p o p u l a t i o n s
3.5 Data c o l l e c t i o n methods
The f o u r ways of collect in^ i n f o r m a t i o n o r d a t a a r e :
a. The p e r s o n a l i n t e r v i e w s
b. The mai led q u e s t i o n n a i r e
c . The t e l e - hone l n t e r v i ew
d . T h e a u t o m a t i c d e v i c e
4,O P r e s e n t t i ~ n , A n a l y s i s 7nd I n t e r n r e t a t i o n o f Data:
T h i s s e c t i o n w i l l a t t e ~ p t t o e s t a b l i s h some o f the problcrp
a r e a s ; , n : ~ l y s i n g and b r i n g i r ~ g t o ligh-1: wh<,t t h e Anambra S t a t e
1; ; inish-y G L f i n t l n c e m d economic d e v ~ l o p n ~ e n t Auka s h o u l d be
c i j r e f u l ol' ::nd b/hat Lk~e p o l i c y t ~ ~ a k t r ~ : ; ; i 1 1 ~ L ~ A L ' o f f l : : ~ ' O~ tk~c
Budget : ~ n d p l a n n i n g s h o u l d d i r e c t t h e i r e f f o r t s t o . Having
s a i d tksit , t h e n e x t s t e p i s t o have t h e d a t a p r e s e n t e d i n s u c h -.
a way t h . 3 t h e i r a n a l y s i s w i l l p r o v i d e a due t o t h e problem a
u n d e r s t u d y ,
4.1 P r e s e n t a t i . o n o f d:!ta r'rom t h e i n t e r n : i l r e c o r d s o f t i - e m i n i s t r y
of f i n * ! n c c and econbni c plannin i : Awka:
From t h e i n t e r n a l r e c o r d s o f t h e m i n i s t r y f i n a n c e and
Economic p l a n n i n g Awka a s d e p i c t e d i n t h c Appcndix A and B
a t t a c h e d , t h e m i n i s t r y budge ted t h e t o t a l r e c u r r e n t r e v e n u e
o f B3859, 7 6 1 , 000.00 f o r t h e f i n a n c i a l y e n r a s n g o i n s t t h e
t o t a l r e c u r r e n t r e v e n u e o f W711/1,747,8OO.O0 i n t h e l a s t f i n a n c i a l
y e z r rhowing an i n c r e a s e o f Pd115,033, 130.00 which r e p r e s e n t . ?
13.37% i n 2 r e a s e o v e r nd : ~ b o v e l a s t r e c u r r e n t r e v e n u e b u t l p t o f
t1.e m i n i s t r y f o r Anambra s t t c , I n t h e c a s e o f r e c u n r a , n t Exp-
e n d i t u r e as snown i n Appendix B a t t a c h e d t h e m i n i s t r y b u d g e t e d
t o spend W€!,3?3,600.00 en p e r s o n n e l c o s t s f o r 1997 w h i l e W5.283,
030.00 was budgeted . .nd s p e n t on p c r s o n n ~ l c o s t s i n 1996
which gave a n i n c r e a s e o f W3,040, 620.00 a s a g n i i ~ l s t 1996
budge t on t h e same head which e q u a l l y r e p r e s e n t 3 6 . 5 3 i n c r ~ a ~ ~ ,
o v e r and ~ b o v e t h i s e x p e n d i t u r e head d u r i n g 1 9 9 6 f i s c a l y e a r .
D u r i n g t h e 1997 f i s c a l , y e a r , t h e m i n i s t r y o f f i n c n c e and
economic p l a n n i n g kudgeted t . e sum o f ki?0,956, 280.00 on o v e r
head c o s t s as a g a i n s t t i l e sum o f #6,285,980.00 which was
budge ted i n 1996 m;rking a d i f f e r e n c e o f Wlr,G70,300.00 which
a l s o r e p r e s e n t s 42.& i n c r e a s e i n 1996.
Th? r e a s o n s f o r t h k s a s t r o n o m i c a l i n c r e a s e was due t o
i n c r e a q e s a r i s i n g fcom empolyment o f new w o r k e r s , r e n i s t o t e m e n t
o f workc, ; ; who have comple ted t h e i r c o u r s e s o f s t u d y l e a v e s
w i t h o u t p:ly some y e a r s back and morcso i n c r e a s e i n t h e admini -
s t r a t i v e z o s t s of t h e m i n i s t r y .
4.2 P r e s e c t a t i o n o f Data:
O r a l i n t e r v i e w
! I l h e r e s u l t of t h e o r a l i n t c r v i e w conduc ted was r e v e : t l i n g
i t t o u c h s on mzny i s s u e s l i k e p o o r p l a n n i n g and c o n t r o l , sy s t em
l a c k of n u ' . ~ l i f i e d p e r s o n n e l , Engagement of i n e x p e r i e n c e d s t a y
i n t h e budlyet d e p a r t m e n t , p r e v a i l e n t misranagernent o f p u b l i c
f u n d s , p o o r i m p l e m e n t a t i o n s t r a t e c y , p o o r e v a l u a t i o n $f p e r -
forn;:lnr.e, i n d i s c r i p i n . 3 t e v i r m e n t , bud[:t.t execution n:l
a c c o u n t i ~ ~ .
4 . 2 ~ ) P o o r Pl ~ n n i n g :dnd Con t roa System:
The must unf : tvourable f a c t o r :! l'f e c t i n g budj:ct xnd burl;:.lt-
a x y c o n t r o l a c c o r d i n g t o t h e r e s p o n d e n t s were poor planning
arld c o r d t r o l s y s t e m , Due t o p o o r p l a n n i n g and c o n t r o l s y s t e m
actuc.1 e x p e n d i t u r e Ls n o t i n l i n e w i ~h budge ted amounts arid
t h e o b J e c t i v e s nd l e v e l s o f a c t i v i t y e n v i s a g e d i n t h e b u d g e t
a r e n o t n o r m a l l y a c h i e v e d .
" 4 . 2 ( R )
4 . 2 ( ~ ) L a c k of q u a l i f i e d P e r s o n n e l :
On t h e 1:ick o f t p a l i f i e d p e r s o n n e l , ' the r e s p o n d e n t s s a i d t ' r lat
t i . i s p a r t i c u l a r p roblem hsd hompered t h e p e r f o r n ~ a n c e o f t h e #
-. m i n i s t r y e s p e c i a l l y t h e a p p o i n t m e n t o f t h e commiss ione r o f
f i n a n c e , Accoun tan t g e n e r a l and 9 i r e c t o r o f b u d g e t and p l a n n i n g
t h a t a r e u s u a l l y g i v e n t o n o n - p r o f e s s ! o r ~ a b l e c h a r a t e r e d accou-
n t a n t s who i n m o i t ca.ce do n o t p e r f o r m up t o e x p e c t a t i o n s .
4 .2 (c ) Bnfnrrern~lnt o f I n Expe r i encc~r ! s t ; b f f i n t h e I?udl:t:bt Dcpartmi:nt:
On t h e i s s u e of engngcn . .n t of i nexp tb r i enced staff i n the
bud!:et d e p a r t m e n t , t h e r e spondan$ said t h a t t h e m i n i s t r y
u s u n l l y engage p e c o p l e wk~o have n o e x p e r i e n c e i n t o t h e b u d g e t
depar tmt ln t s u c h a s t h e s e newly employed who hLld n o t g e t a n y
o r i e n t a t i o n . These p e r s o n s c a n n o t pe r fo rm t h e i r d u t i e s a s
rnmbe-s o!.' s t a f f o f budgetnr!cy a u t h c r i t y whi ::h e n t a i l s ' c h e c k i n p
t i ~ c a u t h a m e t i c n l z c c u r n c y o f tt:e er , t irr . : , tcs ::nd ca2cu ' l . a t i ons ,
check t h e s u p p o r t i n g d a t a -:rid r e s u l t t o i n r e a l i s t i c b u d ~ r t
and budgc tacy c o n t r o l s y s t e r s i n t h e m i n i s t r y .
4 . 2 ( ~ ) . . P r e v n l e n t misxananernent o f P u b l i c Fund::
On t h i s i s s u e , t h e r e s p o n d e n t s s a i d t h a t a l t h o u g h t h e r e
i s b u d c e t p l a n n i n g eind c o n t r o l i n e x i s t e n c e i l i t h e m i n i s t r y
o f f i n;tr~::~?, y e t p u b l i c f u n d s a r c ri till i , c . i nl; rni:;:nan,~[:nd.
Eg i n a : : i n i s t r y o f t h i s n a t u r e , t h e commiss ione r of f i n a n c e
i s c a l l e d t h e a c c o u n t i n g o f f i c e r . H e i s p c r s o n ; l l l y r e c p o n s i b l c !
f o r t h e propi : r spendirrg o f t h e a c c o u n t s v o t e d by t h e p a r l i m c n t
o f h i s m i n i s t r y 2nd i n t h i s r e s p e c t , h e 1s e x p e c t e d t o e x e r c i s e
g r e a t c a r e i n s p e n d i n g money v o t e d b u t !-he r e v e r s e i s t h e c a s e
t o d a y w'+:t:re p u b l i c f u n d s a r e b e i n g s p e n t >nybow and t h e r e b y b e i n ;
o n d e n t s s a i d t h a t t h i s f a c t o r had i n d e e d a f f e c t e d t h e b u d g e t
and bud{<cl::try c o n t r o l s y s t n n o f t h e m i n i s t r y o f f i n a n c e . By
r i g h t , m i n i s t r i e s , d e p a r t m e n t s a n d p a r ; : s t u t a l s s t a r t u t i l i z i n g
t h e i r r o l e s i m m e d i a t e l y t h e budge t i s approved and s i g n e d by
the :; t , i tc govr?rnl. e n t i n t o l aw i n t h e c a s e i f c a p i t r i l b u d ~ e t $ V O t e
c l e a r ~ n c e f . ~ r c a p i t 7 1 commitnent s h o u l d 1)e g r a n t e d n t t h e
end of t h e f i r s t q u a r t e r o f t h e ~ n n u a l budge t e x e e p t i n few
s p e c i a l c a s e s i n t e r m s o f n e c e s s i . t y tlnd u r g e n c y h u t t h e : . e
d a y s , t h i s s i t u a t i o n i s mot a l l o w e d a t r:il s i n c e e x p e n d i t u r e s
f rom c a p i t , l b u d @ e t s / v o t e s i s now done i n d i s c r i m i n a t o r y w i t h o u t
a n y r e s t r a i n t on t h e s i d e i f t h e e x p e n d i t u r e s thc rcby l e a d i n / ;
t o p o o r i m p l e m e n t a t i o n of budge t .
4.2(F) Poor Zva l -ua t ion of Per formance :
On t b i i s i s s u e , t he r e s p o n d e n t s s a i d t h < , t this f n c t o r had
1 i n d e e d : ~ f f c c t e r l t h e budget and l m d c c t n r y c o n t r o l . sy s t em i n
Anambrx s t z t e i n g e n e r a l :!nd t h e m i n i s t r y o f Cinnnce i n p a r t i -
c u l a r , s i n c e i t i s g l a r i n g t i~ : t t h e two components i n m y
sys t em oL f o r m a l management c o n t r o l i n v o l v e s m e a s u r i n g L k ~ 2
r e s o u r c e s cbnsumed 'and r e p o r t i n g t h e r e o n t o m;,nagement s o
t h c l t t 1 . e ~ =.an i n v e s t i g a t e a d v e r ~ e v a r i a r . c e lnd i m t i a t e c o r r e c t i v e
a c t i o n , r e p o r t s ::haul,! p r o v i d u s e f u l i n f o r m u t i o n f o r e v n l u o l t -
i n g b o t h :il:~nagernent and progl-;!mmos and t ' r e e v a l u a t i o n of p e r -
fo rmance c,in r e s u l t i n a r e v i s i o n o f a programme o r a r e v i s i o n
o f a budget o r m o d i f i c a t i o n i n o p e r a t i o n b u t i n t h e c a s e of
t h i s r n i n i s t ~ r y o f f i n a n c e t h e r evc l r r e i s t h e c a s e o f which
l e a d s t o n o n - e x i s t e n c e bf p e r f o r m a n c e e v a l u a t i o n
/I.?(G) I n d i s c r i m i n a t e Virernent:
On t h e i s s u e of i n d i s c r i m i n a t e v i re rnen t , t h e res-
pondents s a i d t h a t t h i s f a c t o r had a c t u a l l y a f f e c t e d t h e
budget and b u d g e t a r y . c o n t r o l system i n Anambra S t a t e i n
g e n e r a l and m i n i s t r y o f f i n a n c e and Economic Development
i n p a r t i c u l a r . The way and manner s a v i n g s on one o r
more sub-head o r sub-heads a r e b e i n g ' t r a n s f e r r e d t o
a n o t h e r sub-head i n t h e same v o t e t o meet e x c e s s e x p e n d i -
t u r e on a n o t h e r sub-head w i t h o u t p r o p e r a u t h o r i t y i n v e r y
d i s t u r b i n g . The u s e o f v i rement w a r r a n t which had been
a recogmised i n s t r u m e n t o r a u t h o r i t y f o r v i r e m e n t i s no *
more i n e x i s t e n c e , t h e r e b y l e a d i n g t o i n d i s c r i m i n a t e
v i rement by c h i e f e x e c u t i v e s t o s a t i s f y t h e i r p e r s o n a l
g a i n s .
4.2(4) Budget Execu t ion and Accour.,cing:
On z h e i s s u e o f budget e x e c u t i o n and Account ing , t h e
respond t .n t s s a i d t h a t anyone who c a r e s t o examine t h e
h i s t o r y of budge t ing i n N i g e r i a w i l l f i n d t h a t govern-
ment b ~ ! d g e t s which m i n i s t r y o f f i n a n c e i s one had been
w e l l l 3 i d b u t due t o poor implementa t ion many o f t h e
o b j e c t i v e s of t h e 'budget had n o t been met a t a l l . There
i s a l e 9 t h e problem of matching cash r e c e i p t s w i t h
disbur:ements. No m a t t e r t h e purpose f o r which an
e x p e n d i t u r e i s p l a n n e d , t h e f i n a l d e t e r m i n a n t f a c t o r i s
t h e a v a i l a b i l i t y . o f c a s h t o match i t . As a r e s u l t , c a s h
programming o r reprogramming u s u a l l y become n e c e s s a r y t o
a l l o w ~ ~ o v e r n m e n t o f f i c i a l s some l a t i t u d e i n s h i f t i n g f u n d s
from one hedd o f proiramme t o a n o t h e r and moreso t h e r e i s
s t a n d a r d a c c o u n t i n g sys t em i n t h e m i n i s t y o f f i n a n c e t o
a i d a c c o u n t a b i l i t y .
d
4.3. A n a l y s i s and I n t e r p r e t a t i o n o f Da ta F i n d i n c s :
From t h e d a t a a b o v e , i t i s q u i t e e v i d e n t t h a t t h e
I m a j o r p-oblem f a c i n g budge t and b u d g r t n r y c o n t r o l sys t em
a r e t r a c e a b l e t o p o o r p l a n n i n g and c o n t r o l s y s t e m , l a c k
of q u a l i f i e d p e r s o n n e l , engagement of i n e x p e r i e n c e d s t a f f
i r i t h e b u d g e t d e p a r t m e n t ; p r e v a i l e n t xismanagement o f
p u b l i c f l ~ n d s , p o o r i m p l e m e n t a t i o n s t r a t e g y , p o o r e v a l u a t i o n
o f p e r f o r m a n c e , i n d i s c r i m i n n + 2 v i r e m e n t and b u d g e t e x c u t i o n
and a c c o u n t i n g . D e t a i l . 3 ol' C ; I C ~ f ; ~ c t n r Li:ivi? ; ~ l r c ; ~ d y b(:t-.n
d i s w s s c d p r e v i o u s l y .
C:HP.PTER FIVE
5.0 Summary o f F i n d i n g s , Recommendation and C ~ n c l u s i o n :
5.1 Summary:
~t t b e b e g i n i n g of t h e s t u d y , t h e r e s e a r c h t o p i c h a s
been b r i e f l y i n t r o d u c e d t o make a layman u n d e r s t a n d what we
a r e r e s e a r c h i n g on.
For e f f e c t i v e and e f f i c i e n t c o n t r o l o f p u b l i c f u n d s , t h e r e
a r e l a i d down r u l e s and r e g u l a t i o n s i n t h e p u b l i c s e c t o r
which must be obeyed by t h o s e concerned. For i n s t a n c e i n a L
I m i n i s t r y , t h e head o f t h e m i n i s t r y i e commissioner o r m i n i s t e r
i s c a l l e d t h e a c c o u n t i n g o f f i c e r . He i s p e r s o n a l l y r espons -
i b l e f o r t h e p r o p e r spend ing of t h e a c c o u n t s vo ted by t h e
p a r l i a r r ~ e n t f o r h i s m i n i s t r y and i n t h i s r e s p e c t i s expec ted
t o e x e r c i s e g r e a t c a f e i n spend ing t h e monies vo ted by - making s u r e t h a t a l l e x p e n d i t u r e t o be i n c u r r e d a r e d u l y
approved by him o r by any o f i c e r d e l e c a t e d by him f o r t h i s
p u r p o s e , t o a c h i e v e t h e d e s i r e d g a a l s of t h e Government.
Wi.thout a b u d g e t , a b u s i n e s s may wander a i m l e s s l y , i t
rnay nevc.r know where i t i s go ing o r where I t shou ld go.
The S;.TIC t h i n c i s a p p l i c a b l e t o goverr~mcnt a c t i v i t i e s
w i t h o u t a budget . Even w i t h a budget a b u s i n c s s rnhy n o t
r e a c h i t s planned d e s t i n a t i o n b u t t h e e x e r c i s e of b u d ~ e t c l r y
c o n t r o l w i l l n o t e t h e d e v i a t i o n from t h e pl:in and t h u s
p r o v i d e o p p o r t u n i t y f o r n e c e s s a r y c o r r e c t i v e a c t i o n .
Based on t h e r e s u l t o f t h e inves t iga t ion , ,&rr ied o u t ,
t h e f o l l o w i n g f i n d i . n p were made:
1. T h a t t h e m i n i s t r y makes u s e o f b u d g e t a r y p l a n n i n g and
c o n t r o l .
2. Th;, t: t h e m i n i s t r y makes use o f more t h a n o n e t y p e of
bul(:ets and t h c most n o t e a b l e o n e s a r e programme budge t -
i n c and lump sum b u d f e t i n g .
I 3. Thktt b u d g e t i a y p l a n n i n g and c o n t r o l h e l p s t o i m c r e a s e
p r o d u c t i v i t y among w o r k e r s and a i d s p r u d e n t f i n a n c i a l
management, by making i t p o s s i b l e f o r t h e m i n i s t r y t o
r e g u l a r i s e payment o f s t a f f s a l a r y which s e r v e s a s a
motivator t o t h e employees .
4. T h a t o t h e r f a c t o r s a s s o r . ~ t e d w i t h i n c r e a s e d p r u d c n t
f i n a n c i a l rnana[:emc-nt and incruasc:rl p roduc t i vi t y 1 :;
good management and h o n e s t s t a f f ;
5 . T h a t t h e m a j o r a d v a n t a g e s from t h e u s e o f b u d g e t a r y
p l a n n i n g and c o n t r o l a r e ;
a ) D e c i s i o n can b e q u a n t y f i e d and d e v i a t i o n d c r e c t e d at t h e
e a r l y s t a g e .
b) I t m o t i v a t e s t o p managers and e m ; ~ l o y e e s and d i r e c t s t h e i r
a c t i v i t i e s towards a c h i e v i n g t h e o r g a n i s a t i o n s o r
o r Government o b j e c t i v e s ,
6. T h s t much emphasis i s g i v e n on budt:etary g u i d e l i n e i n
o r d e r t o i n c r e a s e p r o d u c t i v i t y and good f i n a n c i a l
management of t h e government funds .
7. That t h e s t r a t e g y of l a y i n g emphasis i s e f f e c t i v e i n
t h e s e n s e t h a , t it h e l p s t o i . n c r e n s e p r o d u c t i . v i t y , f a s t
d e c i s i o n making and a d j u s t i n g t o u n f o r e s e e n consequence.
8. Tha t t h e s t r a t e g y f o r l a l r i n g emphasis on b u d g e t a r y
g u i d e l i n e i s v e r y e f f e c t i v e .
9. That t h e m i n i s t r y cou ld n o t have or ,ernted b e t t e r i ~ d t h o u t
t h e u s e of b u d g e t i n g g u i d e l i n e s hence t h e b e l i e f t h a t
t h e r e i s n o t a l t e r n a t i v e t o t h i s t o o l ,
10. Triat t h e f b l l o w i n g a r e t h e major r e a s o n s f o r u s i n g
budge ta ry g u i d e l i n e s ;
i ) I t h e l p s t o o p e r a t e w l thi .n thi: b u r l ~ c r l i m i t .
i i) I t h e l p s t o compare a c t u a l w i t h budget r e s u l t s ,
i i i ) ~ . t checks b r n d s and f f inanci , : l w::s$e.
i v ) 1.1: h e l p s i n e o - 0 r 3 i n : ~ t i n g t h e c t c t i v i t i c s o f t h c v:triou.c;
d i p a r t c e n t s i n t h e govdrnn;. n t m i n i s t r i e s .;rid e x t r a -
r~ i n i s t e r i a l d e p s r t m e n t s ,
t h a t t h e p i n i s t r y i s an o r g a n i s a t i o n w e l l s e t up w i t h checks .
and b n l a n c e s qnd w i t h nobl i . a ims .-:nil o b J e c t i v e s .
T h a t t ? , e m i n i s t r y ' s mnln p rob lems a r e i n a r e a s o f :
Foor p l a n n i n g and c o n t r o l
L a c k o f c l u ~ ~ l i T i ~d p e r s o n n e l
Eng;li:ctnlcr~t o f i n e x p e r i e n c e d s t a f f t o rnflin bud1:c:t d e p n r t -
Reva l t in t rrlisn:nnagement o f p u b l i c f u n d s .
Poor imp1 e m e n t a t i o n s t r a t e g y
P o o r cva1u: i t ion o f p e r f o r m a n c e
I n d i s c r i o i n a t e v i r e m e n t
Budget ~ x e c u t i o n / ~ c c o u n t i n g
T h a t t h e r : i s u r g e n t need f o r t h e m i n i s t r y t o employ
capa l j l e h lnds l i k ; p rofuss ion ,11 er,,jr-ter1ud i :zcour~- tan ts t o
h e l p i n k c e p i n ~ i t s f i n l i n c i a l r e c o r d s : ~ n d a c o o u n t s i f
f r a u d 1s t o he avo ided .
I n t h e l i g h t o f t h e f o r e g n i n g , o n e would u n e q u i r o c a l l y
a s s e t t k i i t budgratary p lhnn ing and c o n t r o l h e l p s t o i n c r e -
ase sound f i n r t n c i n l m,lnai;ement o f p u b l l z fun - l s :md . I s 0
i n ~ r r ? ~ . e ~ , r o d u c t i ~ , i t y .
I n v i ew of t h e r e s u l t o f t h e s t u d y s l i d t a k i l l g n o t e
O f the v i t a l r o l e o f t h i s n i n i s t r y , i f p r o p e r i y
a d m i n i s t e r e d c o u l d p l ~ y i n t h e economic g r o w t h o f t h e
s t a t e , hence i t i s recommended t h : ~ t .
1. Fok t h e m i n i s t r y o f . f i n a n c e 2nd economic p l a n n i n g
Anc?rnbra s t a t e t o o p e r n t e s u c c e s s f u l l y , t h e management
~ h o u l d 30 a l l t l - a t i s p o s s i b l e t o s e c tk ,a t they :
a. P u t this r i g h t p e o p l e i n t h e r i ! - k t p l a c e s
b. T r a i n e v e r y o n e f o r t h e b u d g e t :!rid tlur!gcttary c o n t r o l
d u t i c:s.
c. Mnke t h e m i n i s t r y n c o - o r d i n a t e d team
d . Apply t h e r i g h t t o o l s and r i g h t c o n d i t i o n s o f s e r v i c e . I
e. Look &bead 2nd p1r.n ahead f o r more - lid ; e t t c r t h i n g s
f o r t h e government 2nd t h e e n t i r e c i t i z e n i n :
I 2. Thc bud,<et d e p a r t r r ( , n t of t h e m i n i s t r y o f T i n q n c e s : ~ n d
economic p l a n n i h g s h n u l d be r e - o r g , ? n i s e ? t o give them
~ r e a t c r antonomy 5:o a s t o improve t h e i r perform:,nce.
3. The r . i n i s t r y s h o u l d c o r 1 t i . n ~ t o rr;akr: u:;u oi' l;u,li:et;rv
p l clnrli rig and c o n t r o l b u t s i lould e ~ ~ d e . ~ v o u ~ ~ t o c : o n ~ l ~ t , ~ ~ c
i t s bud:;ct w i t h a c h i e v e d r e s u l t s o a s t o f i n d o u t
v a r i o n c e s where tk,ey e x i s t and m -lke ; ~ r ; i e n d r n ~ ~ ~ t where
mercs sn rv .
4. The mt.mber.s o f s t : t f f i f t h e m i n i s t r y s h o u l d bc made
t o unders t : in? t h e r e a s o n f o r t h e u s e o f bu \dge ta ry
g u i d e l i n e . Tn this r e g a r d t h e y w i l l Know what t h e
m i n i s t r y wan t s to , ~ c h i e v c and wha t t h e y :$re r e q u i r e d
t n c o n t r i b u t e t owards t h e r e a l i s a t i o n i . b f t h e gover-nryent
g o s l .
The 0 f f i c - n o f t h e s t a t e 2 e c o u n t : : n t g e n e r a l , o f f i c e o f che
D i r e c t o r o f f i n : . n c e and s u p p l y , o f f i c e o f t h e d i r e c t o r
o f Budce t and p l n n n i n g o f t h e m i n i s t r v :-houl:d be re-
or6:ani s c z d , T b i s :<hould br? done 1)y wi t k ~ ~ l r ; i w i r l , - . , r i ; !
a s s i g n i n , : new r e s p o n q ; i b i l i t i e s t o c o m p e t c n t ;!nd ( 7 u a l i f i e d
o f f i c e r s : I S well a s h i r e e x p e r i e n c e d and c p : : l i f i e d n c z o u n t h n t
p e r s o n n e l v ~ h e r e n L c e s s a r y . T h i s w i l l c r ra t le t h e m i n i s t r y
Lo have , d e r i u ~ . t e and up t o d a t e r i n a n c i ; t l r e c o r d s o f t h e s t a t e . #
6. The r n i n i s t r v s h o u l d s e n d i t s books o f i ~ c c w n t nd r e c o r d s
a t t h e 2nd o f evl . , ry f i n ! n z i a l y e a r f o r ; : u d i t i n g : ~ n d
c r > n s e o u e n t p r e p a r a t i o n o f i t s f i n a n c i t t l s t a t e m e n t .
7. F u t u r e i n v e s t i g a t i o n s h o u l d b e c z r r i e d o u t i n o t h e r
m i n i s t r i e s ;in3 e x t r a - m i n i s t r i a l 3epar t rnc.nts s o ,is t o
p l a n n i n g and c o n t r o l sy s t em a s a t o o l for - i nc re : i s cd
p r o d u c t f i n a n c i s l m s n a ~ e n c n t i n p r o d u c t i o n .
8. P rodmot ion o f employees s h o u l d Le b a s e d on merit t l l r o u ~ h
an ort7;:lni s c d j o b eva lu i i t i on p r o c e d u r e w k i c h ::auld br
undl- .rstoo-l by t h e e n t i r e employees o f Lklc m i n i s t r y t o r:,-;ke
them ~:lti61*ii3;1 ~ n d p e r f o r m t h e i r d u t i e s .
5.3 Conc lus ion : -~-
?'he w o r k thoui:h t o u g h b e c a u s e o f some ::onstr3:tin t s
h a s been v c r y i n t e r e s t i n g and rewcirdifig t h e r e sec i r ch
s t u d y s t a r t e d w i t h t h e i n t r o d u c t o r y z h a p t e r where t h e
background s t a t e m e n t o f t h e prob lem were h i g h l i g h t e d
t h e 0 ' 2 j e c t i v e o f t h e s t u d y wi!ich W;:S t o a p p r a i s e t h e
cri t i re budge t and budgets r.y c o n L ro l :;y:itun~ ; ~ r l c i Lo cxj l -
o s e tile p r o h l c m s t h a t h::d b e d e v i l l e d t h e c?nt : i re s y s tern
arid r e s u l t e d t o p o o r e v a l u a t i o n of p e r f o r m a n c e and p r e -
v ? l e r ; t rnisn:anagernent o f p u 1 , l i c f u n d s . Ttje c h a p t e r a l s o
d e a l t w i t h t h e s. i .gnifi .z;- lncc o f t h e ~ t u d y , t h e f o r m u l a t i on
of h y p o t h e s i s ::nd d e f i n i t i o n o f rtil.i!v;irit tc- . I -ms.
I n p u r s u i t o f t h i s o b j e c t i v e o f e x p o s i n g t h e p r o c l e m s
t h t pl7,gine b u d g e t and b u d g e t a r y c o n t r o l s y s t e m i n
Anambra s t - , t c ? i n g e n e r 2 l and m i n i s t r y o f f i n s n c e i n p a r t -
i ,-~.il;,r. , 1: ho rpse! rcher- had ::.:plor(.-! v n r i . o u s i .ntr?rSacti on:;
or? b u d g c t and brxl/;c?t:~ry c o n t r o l and ;I:: well wcr l l : i n l o
t h e m i n i s t r y of f i n a ~ c e 2nd r:conomic p l a n n i n g c h o s e n
ti..; a case s t u d y - t o exhume t h e p r o b l e m s t!:cl. b e d e v i l l e d
budget . 3nd R u d g e t a r y c o n t r o l s y s t e m i n Anambra s t a t e .
The f i n d i n g s o f t h e . s t u d y were q u i t e r e v c o l i n g and
in3 i z : - : t ed t h a t t h e most gl:lrinl.: p r o b l e m s : : o n f r o n t i n g
Sedge?: and b u d g e t a r y c o n t r o l o f th l . mini : ; t ry are t r a c - ' ..
e n b l e t o p o o r p l - ~ n n i n g and c o n t r o l s y s t c m l a c k o f q u a l i -
f i ed p e r s o n n e l , engagement o f i n e x p e r i . - n c e d st;?ff i n
t h e budge t d e p a r t m e n t , p r e v a l e n t m i s m a n a g e ~ e n t of p u b l i c f u n d s ,
p o o r i m p l e m e r , t a t i o n s t r a t e g y , p o o r e v a l u a t i o n of p e r f o r m a n c e
i n d i s c r i m i n c t e v i r e m e n t , b u d g e t e x e c u t i o n : ~ n d a c c o u n t i n g . Most
o f t k e r ~ s p ~ r - d e n t s ha rped on t h e s e pro!- l rms c o n t i n u o u s l y a s
t h e a n a l y s i s , t e s t o f h y p o t h e s i s and i n t e r p r e t a t i o n o f d a t a
reve.?led.
I n t h e c p i n i o n of t h e r e s e a r c h e r , t h e department o f Bud-
g e t and p l a n p i n g o f t h e m i n i s t r y o f f i n : i n e e and ecorlomic p l n -
n n i n g A n a m b r ~ s t , l t e s h o u l d b e r e - o r g a r h i s e d t o g i v c t em sound
o p e r z t i ~ r ~ , . L : t:1ndclrd s o a s t o improve t h e i r pcrforr:,;,nze.
- F i n z l l y , i t i s hoped t h a t t h i s s t u d y .;:ill be u s e f u l t o b
s t u d e n t s .:n<l o t h e r p e o g l e who a r e interested i n Bu5get end
Budcekary sys t em i n p u b l i c s e c o t o r a s n d i s - i p h i n e tahd who
m::y wi sh ~o :.now t h e o p r r a t i q n - 1 1 s t a n d a r d o f t h e m i n i s t r y o f
p r o p e r t y . On a l s s t n o t e , i t i s t h e o p i n i o n o f t t ~ e r e s e a r c h
t h a t t h i a s t u d y i s n o t exhaustive. I am t : : t : r c f o r e p r e f e r i n g
suggestions t h a t f u r t h e r s t u d i e s be done on t h i s t o p i c w i t h
t h e aim of b r i n g i n g o u t t h e problem a r e a s of t h e budge t and
bud ,ye ta ry c o n t r o l :,nd o f f e r i n g a 1 ; t s t i n z s o l u t i o n t o them t o
enhance sound e n d p r u d e n t f i n : i n c i a l a a n a g r l ~ ~ ? n t o f t h e s t a t e .
Sec t - i cn A - Overhead C o s t s
T r a v e l *-~nd ' t rn r1spor ta t . i on
U t i l i t y s e r v i c e s
Te lephone & t c i e g r a p h s e r v i c e s
S t a t i o n e r y
Ma in t annnce o f o f f i c e
f u r n i t u r e & equipm.--nt
M,?inten?nce of veh i z l e s
Consul t n n c y s e r v i c e s
G r a n t s , c o n t r i b u t i o n s
arid : subvcr~t ; ions
T r : . i n i n g 8; s t a f f dev.
M i s c e l l e n o u s e x p r n s e s
C o n t r i b u t i o r l s / : ; u b ~ e n t i o n s
-to i n t c - : rn ;~ t iona l o r c ; i r ~ i s a t i o n s
Motor v c ~ h i c l e s / m o t o c y c l e s /
B i z y c l t ~ / n d v ~ ~ n c e s
C l a s s i f i c a t i o n D e t a i l s o f E x p e n d i t u r e P rov i s i c jn I ncre :?se / b
lwde and t y p e 1995(W) 1996(U) d e c r e n r e
I 4. Common s ~ r v ' c ~ s 32,flLi0 300,000 ? 6 5 , 1 5 0 ( - )
TOTAL OVT"'T~;.~ZP T.':~s 5 , 2 6 g , r n o 2 ,304,760, 3 6 5 , 1 2 0 ( + )
L
P e r s o n n e l c o s t s - 7 B 309,150 1 , 8 5 7 , 9 8 0
Ovi.y,k)t.nd c o s t s 3 ,?69,N?O ?,90/1,760
TOT.rL 5 , 5 7 9 , 0 1 0 /4,756,7/10 1 2 , 2 7 0 ( + )
U t i l i t y s e r v i z e s
'Telephone , ~ n r l T c l eiyrnph
S t a t i o n e r y
Main tenance o f O f f i c e f u r n i t u r e /
" Equipment
Ma in tenance of vehiz1:-s
C o n s u l t a n c y servi ces - - - G r . : n t s , c o n t r i . b u t i o n s .,nrl subventions - - o
- T r a i n i n g and s t a f f deve lopment
En te r t ; ) i nmen t 3nd h o s p i t a l i t y
M i s c e l l t ~ n o u s e x p e n s e s 100 ,000 1 0 0 , 0 0 0 -
Motor v ~ ~ h i c l e / c y z l e / ~ i c y c l e advance 800,000 800 ,000 - Common s e r v i c e s - 4 , 3 0 6 ~ ~ ~ 0 ~ - 1i26,OOO 3,880,400 - (+ )
TOTAL OVET~HEAD COSTS 8 , 2 6 6 , 4 0 0 3002,470 4 ,263 ,930 ( + )
Pe r son re1 c o s t s 5,121,370 2,966,450 2,154,920 (+ a
Overhcad C o s t s 7,266,400 3,002,470 4,263,430 (+
Estimates o f f i c e document Ne - 2 of 1996.
T h i s i s a ri::,u:lrch work of Covernn.c:rlt b u c l ~ ~ : t ;!r~d hud[:c L:.lmy co r i t~u l . I :;yst.em ( A s t u d y o f P I i n i s t r y o f f i n a n c e ;,rid Econorr.ic p l ; , n n i n g Anambra
!:trite - ~ w k a ) .
The p u r p o s e o f t h i s r c se : j r ch i s e n t i r e l y f o r academic ex1:rci .s~ 2nd
i s aimed 7t gettip;; t h e r e s t o f t h e p rob lems t h n t .h:tve h i n d e r e d t h e
o p e r a t i o n a l e f f i z i . w c y 2nd p r o p e r f i n a n z i 3 1 monnirl mcnt i n t h e p u b l i c sec-
l o r w i t h emphas i s t,? y o u r m i n i s t r y . And i f t h e rccommend:?t ions z r e t a k e n
t h e n we can hope !:o r e v i e w o u r m i n i s t r i e s a n d rniiht:. thcm v i : b l e and >a
r e s u l t o r i e n t e d .
Your r e s p o n s e w i l l be o f i m a ~ e n s e h e l p i n ti- is r c s e a r c n arid s u c h
r e s p o n s e w i l l be t r i : r ? t ? d i n s t r i c t e s t c o n f i d e n c e .
T h ~ n k s f o r your. c o - o p ~ ! r ' . ~ t i o n .
Yours f a i t h f u l l y
1 . Sex: ?,!ale /-f F e m a l e lT - 2. !Vh-it p o s i - t i o n d o you h o l d i n t h i s n i n i sty.y?. . . , . . . .
!-low l o n g : : ! v e you he--hn i n t-he p rcs r t r i t r ; l ;~nn~en . . ?n t p o s i t i o n ? , . .. I;fh:-.t :r~:~na;;;c:rnc;nt c o n t r o l p r o b l e r c s i f a n y do' you t h i n k i s
t h e o:o:;t , ; ~ r ~ i . s s i r ~ g i n .[:his m i n i s t r y ? Flc-cise - t i c k
H U K B T ~ resource / Per:-;onnc:l pr-obltrm
F i n a n c e p r o b l e
P1:inninf: .:nd c o n t r o l
communicnt:! on probl~erp
A , ?3, C, C< D
I n view oL' t h e import,-.:rice o f budget f ind I .udge t ; t ry
c o n t r o l i n o u r p o l i c y f o r m u l a t i o n :!nd i . m p l m e n t ; i t i o n ,
whizh of the u n d e r r g o n t i o n c d d o you t h i n k i s :? con;ponent
o f Bud[;i.t :nd B u d g e t a r y c o n t r o l s y s t e m i n this m i n i s t r y ?
f o r c a s t i n g o f t h e p e r s o n n e l c o s t 1-/
I d e n t i f y i n ! ; the c o s t c e n t r e s /{
D r 2 f t b f tile c o s t qnd r e v e n u e h ~ d g e t s f o r budtrc-:.t c e n t r e s - /-/'
b U n t r u s t w o r l h i n e s s o f t h e s u r b o d i n . ? t e h /-/ - C . E n p g c m c n t o f i n e x p e r i e n c e d s t a f f i n t h c budget d e p t /'T --.
L z c k of mo' i v n t i .on
e. All of t h e above - f
7. T h e bad r 1 t 4 . i Lude t o work o f N i r e r i : ~ n s :is shown i n t h t ~ i r
avo idance c-!f work a n d r e s p o n s i h i l i. t y hils resul t.ed i .n thct poor I
pe r fo rmnncos of t h e most s t a t e n i n i s t r i e s :,rid e x t r a m i n i s t c r i a l
d e p a r t r x e n t s , how t r u e i s t h i s t o t h i s m i n i s t r v ?
a. Very r-ippli::cr!!le 1:- /
b. Applic : ibl l : /-f -
8. Wh;tt i:; t h ~ ? most i m p o r t a n t r ; , o t i v a t i n g $ a c t o r usctd by t h i s
min i st r v ct, rewcr-3 1;;orkers who 3 i schnrgc:rl t h p i r d u t i ~ . ~ ~
h o n e s t l y -1nd d i l i g e n t l y t h a t hclpcr l t h.t hudgcat :.nd bu:1gt t ; , r v
zont; .cl rilochincry t o work o u t : ; u c c e s z f u l l y ?
a. P r o ~ o t i a n
b. E a r l y mon t ly s 3 l a r y
c. Comn\issi.oner Is appointmt:nt
d, D ~ l y s off
e. None of t h e above
9 ( ~ ) It is :: known f ; l c t t h : ~ t uri1r.s:; a wor-krbrB i : ; r t~ii : ;onitbly
srrt if io:! w i t h the ~ ~ ~ w a r d g i v e n t o him, he i:: n o t l i k e l y t o
p r c d u z c w i l l you sriy t h a t w o r k c r s of Lh i s n ~ i n i s t r v a r e a d e w , i -
t e l v r ewarded?
a Yes -. 7
B. If y e s brhat a r e t h e reward i r .g system')
10. The C i v i l pcrv i - e blini: a l q r ~ e sInd complex o r g a n i . z ? t i o n
nee:ls p : * c d l ~ t e r m i n c d s t a n d a r d f o r uni f o r n j i t y i n or:?cr t o
a z h i cvc !.he 2t.t f i n : t n c i & l o b j c c t i vc 1' the govc:n~r, ,cnt
p l a n n i n g i:; chcirgcd with tht? r e s p o n ~ i b i l i t i c s o i f i r l ; :nc i :~ l
p l a n n i n l ; for t h e ~ h o l i ? ezonorny o f t h c s t a t e bay-ed o n p o l i c y
Y e s
, . d.' . Sclmi nnnu s l l y -
p u t . l i e fur lds in your cli ni stry?
a , T h e r e ir xism::na cment o f p u b l i c fund but t h e f r c q u m c y h a s
r i ~ d u c:)r si:lc?rat)l.y -- /-/ .
b. T h ~ r c \ - ~ s Flecn no c a ~ 6 o f f i n - l n c i - l l r q i : n.:inn,r;cm n t n o t i ~ c d i n
t h e rninj r t r y -/' -
c x p - b n r l i t ~ ~ r e s 2nd revenue f o r t h e s t ? t c : i s a l s o ti,,?
15. Thc e e e ~ u t i o n of t h e budget in r e1s t i c ;n Lo t h e c o l l e c t i o n o f
r e v r l n ~ e s and d i s b u r s e m e n t of p u b l i c f ~ n : ! s i s u n d e r t::kcn
I Are yoti sntiEfic!d w i t : . t h e wrry tile overncmnt o f f i z c r z
e v t r u r t c d wi t h t h e e x e c u t i on of b11d.yet mnnafc p u b l i c
tee l ln i [ p e s will h e l p t o !r.i n i m i s e misn?iinage:-. u n r o f pub1.i.c
a. Yes ' 7
1 . M,inagc:rl :nt cor,t.rol in i t s broadest context i s tk,c means by
wiI izh o - g m i s a t i or, c a r r i e s o u t i t s oL j e c t i v e s e f f e c t i v e l y
: ~ n d ef f i c i e n t l y
* 8. Not f a r e d f ; ; i r l y r.:ell 1 . 7
C. Not f a r s d w e l l 1 7
d. I d o n c t know - /'T
30. Doc:: yorir r n i n i ~ t r v make .use of b u d y ; ~ t . , ~ r y p l a n n i n g and control
c. I d o n o t know -- //
21. If y e z , w h l t k i n d o f c o n t r o l d e v i ccs ?ocs the m i n i s t r y
u:;t) ( t i :k t h e a p p l i c a b l e onc!)
'1 4
a. L i n e i t e m b ~ i d g e t i n g (where c o s t s a r e i t e m l i s e d ) - b. Lump sun: budget ing (depo r tmen tn l / s ec t i onz l budce t ing) 17
C Pe r fc r r : cirlce hudgctj.ng s p e c i f i c p r o j e c t b u d ~ e t i n y ; - /7 . d . Prot:r:!rrr!:e burlgeting ( y e a r l y operation:; budce t ing) - /-[ .
RI RLI OCR AFHY
BOOKS
1. A C C A S t u d y P a c k
2 B a r p c r 1d.M
L 3 - Beclay , H
B r i y e r s add IIolmcs
Brown J . L
H a r p e r V.F!
C o s t i n g F i n a n c i a l Bai n i n 6 1987 E d i t i o n
London
Management q c c o u r ~ t i n & !ith E d i t i o n , Mac
I h r 1 ~ 1 1 d : , r ~ d b;v::r~:, 1, L d . 1 . o 1 1 1 l o r i WCJ N ; ' l ly
I n d u s t r i a l N ~ ~ n ~ ~ i r ~ m e n t S e r v i c e s , Mac Don:i la
2nd E v a n s L t d London WeIN 3HY
P r i n c i p l e s of c o s t A c c o u n t i n & C n s s e l 2nd
E d i t i o n KacDonal:! c:nd E v a n s L t d London WCI
2HY
P r i n c i p k e s o f Mr?nn['cm. n t A c o u n t i n g Mac-
Dona ld : ~ n d E v a n s L t d London WCIN 2I!Y
p o s t Account in l r 2nd EdF t i o n 1flacDon::ld
a n d Evans L t d Lon*ion WCTN 2HY
L a w r e n c e M. Mathcws P r i n c i p i l l C;pc?r;tt i rig Rur j : ; r* t in l~ , F:lc C r : l r ~ t l
h i l l 1987.
9. P n l t y J.
The f Lnance znd : - innlys i s o f c a p i t a l p r o j c :
Corporat fh p.1 :rn?linj; - nd t,utijr;ot:: r y -0ntr .01
Mac Don:ild ::rid D.:ris Lt.d Lon2on 1970
E d i t i o n PP 205 - 297.
11. SCOH J.X
12. Sobs n Z.W
B u d c e t a r y c c n t r o l nd s t a n d a r d c c s t s
Pitm,n p u b l i s h e r z B e t h , G r e a t B r i t a i n
6 t h E d i t i o n 1376 PI:11+.21.
An I n t r o ? h c t i o n t o c o c t Acccunt in[ ;
M a ~ a r i nlis . , r ~ r l u c r i odi c n l s :
P u b l i c f i n r l n z e i n B r i t a i n : s t r a t e g y and p e r f c r m a n c e i n t h e
19805 - c c r f i f i ed Aceountari t J o u r n a l - janunry/Fel?rui~lry 1992
Anthony K , N ~ n d Y o u g D.:! (1384) rcan::gement c o b t r o l i n n o n - p r o f i t
orgrjrki ! - - t iens , U.S .A.
Jon(.:; I{, : r i d Pcrldl c b u r y , M. ( 1 9n6) Pub1 i r Sc.ctor Acc?\ln t l nt:,
l o n Icjn P i 1 rn ~ n
0 jai d e Fr;:n.-is (1932) Budget p l ~ n n i n ~ ; rind imp1 e m e n t : ~ t i o n f o r
e f f e c t ~ v e Revenue G e n e r a t i o n , tk,e O f f i c i $1 J o u r n - , l of t h e I n s t i t u t
of c h a r t e r e d Account?r , t o f N i g e r i a ICAN V o l u m ~ 25 D!O 3
Wilda r sky A. ( 1975) Durlgct ing -a zompara Live t h e o r y of Budcet : l ry
p r o c p s z : s . 130s t i o n : L i t t l e Brown.
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