ASSESSMENT OF BUDGETING IN THE PRESENT NIGERIA ECONOMIC SYSTEM IN CROSS RIVER STATE UNIVERSITY OF TECHNOLOGY

ABSTRACT

In Cross River State University of Technology, a study was conducted to assess budgeting in the current Nigerian economic system. The study determined the role of budgeting in government fiscal policy controls, established the relationship between budgetary control and performance in Cross River State University of Technology, and determined the extent to which budgeting processes have aided planning for Cross River State University of Technology’s long-term survival. The survey descriptive research design was used in this study. The survey yielded a total of 30 valid replies. The study used the Budgeting Theory and the Punctuated Equilibrium Budgeting Theory. The findings revealed that the extent to which budgeting processes assists planning for the long-term survival of Cross River State University of Technology is quite high, based on the replies gathered and analyzed. Furthermore, the findings revealed that budgeting plays a role in influencing the economy, demonstrating how the government will prioritize and achieve its annual and multi-annual objectives, assisting in the financing of new and existing programs, and serving as the primary instrument for implementing fiscal policy. The study suggests that Cross River State University of Technology be budget and budgetary control conscious, understanding that a budget is a plan and a mirror that directs an organization toward attaining its labor market goals.

CHAPTER ONE

INTRODUCTION

BACKGROUND OF STUDY

Budgeting and budgeting are biblical notions that date back to Joseph’s time in Egypt. Nothing was said to be taken from the treasure without a documented order. According to legend, Joseph budgeted and stored enough grain to last the Egyptians through the seven-year famine.

Budgets were originally used to manage expenditures and cash flows in large industrial enterprises in the 1920s.

According to Jean (2010), firms began to utilize budgets to define what employees needed to do in the 1960s. Companies had troubles in the 1980s and 1990s because they were unwilling to invest money on innovations in order to stay under rigid budgets, and they were no longer concerned about how customers were handled; just hitting sales objectives became critical.

According to Serena Group of Hotels Finance policy, each unit must develop budgets against which monthly financial accounts can be reviewed. Effective budgetary control, on the other hand, has proven a concern.

What is expected on a monthly basis is not met. Budgeting is formally related with the introduction of industrial capitalization for the eighteenth-century revolution, which provided a difficulty for industrial management (Jean, 2010).

Budgeting, on the other hand, was first focused with planning and allowing for accurate performance evaluation and, as a result, incentives.

Management accounting control system information assists managers in comparing opportunities and threats in the market so that they can obtain added value against competitors by monitoring changing environmental circumstances. It is also important in facilitating the preparation of budgets, as budgeting and accounting are closely related (Bruner, 2002).

Budgets are believed to have a vital role in communicating top management expectations to lower levels. Budgets are utilized to communicate top management’s expectations to managers and staff, according to Brigham (1979).

It is a quantitative expression of a plan of action created in advance of the period to which it applies, stated in money terms agreed prior to the period, according to Lucey (1993).

According to Lucey (2002), many factors influence performance, including planning and coordination, clarification of authority and responsibility, effective internal and external communication, control of available resources, both human and nonhuman, and motivation of both lower and middle management. If the actual statistics given throughout the financial year come near to the budget, it shows that the organization’s management understands its business and has been effective in steering it in the direction they intended. When actual results deviate significantly from the budget, however, a “out of control” signal is sent. As a result, budget-based control entails a manager’s appraisal based on financial objectives (Lucey 2002). In this context, the benefits of budgeting and its potential negative effects on manager attitudes and behaviors on performance are still among the subjects of strategic management control systems that are being researched. Currently, nearly all large businesses reforecast their forecast their activities, and the actual income and expenses incurred can be compared to the budget and forecast as months pass.

STATEMENT OF THE PROBLEM

The difficulties under investigation can be seen in this context based on the study’s goal. Due to Nigeria’s reliance on revenue, a global market crisis will result in the following: The economy will be crippled and National Development will be shattered if oil revenues are reduced. Capital projects or initiatives are being abandoned due to a lack of funds in the economy. Inefficient use of scarce resources to offer the correct kind of workforce and infrastructure to support our country’s progress. The management’s inability to design a simple budget that will allow Cross River State University of Technology to meet its goals and objectives (Nwude, 2001).

OBJECTIVE OF THE PROBLEM

The overall goal of this research is to evaluate budgeting in the current Nigerian economy at Cross River State University of Technology. Other study aims include:

1. To determine the role of budgeting in the management of government fiscal policies.
2. To figure out how financial control affects performance at Cross River State University of Technology.
3. To determine the extent to which budgeting techniques have assisted Cross River State University of Technology’s long-term survival planning.

RESEARCH QUESTIONS

1. What role does budgeting play in the oversight of government budgetary policies?
2. Is there a link between Cross River State University of Technology’s fiscal control and performance?
3. To what extent have budgeting systems benefited planning for Cross River State University of Technology’s long-term survival?

SIGNIFICANCE OF THE STUDY

Because inequity exists in every organization, the importance of this research effort cannot be overstated. Administrators of public utilities will value it since it establishes performance standards that serve as a daily guide for the proper implementation of the budget plan and achievement of government goals. It serves as a reference document; the study is also relevant to all public and private sectors because financial resources are scarce and limited these days. This budgeting control is inequitable because the limited funds available must be wisely allocated, which can only be accomplished through budgeting control.

SCOPE OF THE STUDY

The scope of this study is limited to the budget office of Cross River State University of Technology for simplicity and ease of data analysis. It would have been an intriguing academic exercise to cover other branches of the budget office around the country, but the researcher decided to focus her investigation on Cross River State University of Technology for ease of analysis and data presentation.

LIMITATIONS OF THE STUDY

The following are the study’s primary limitations:

Secrecy: several of the workers contacted were not only uncooperative, but also difficult to reach. Some of the crucial information required to improve the appearance of this project was difficult to locate.

Financial constraints are another element that limits the scope of this study’s coverage because the scenario at the time of this project’s work was not ideal.

High Transportation Costs: Because transportation costs have increased since the time of this research, the researcher finds it difficult to transfer from one location to another in quest of research materials.

DEFINITION OF TERMS

Budget: A budget is a plan for funding an enterprise or government for a specific period of time that is created and submitted by a responsible executive to a representative body (or other duly constituent agent) for approval and authorization before the plan can be carried out.

Budgetary Control has been characterized in a variety of ways. According to J. Batty, “budgetary control in its most comprehensive form entails a predetermined financial plan to cover all phases of corporate activities, as well as the implementation of that plan in such a way that predicted profit is attained as closely as possible.”