AN EVALUATION OF BUDGETARY CONTROL IN GOVERNMENT PARASTATALS

AN EVALUATION OF BUDGETARY CONTROL IN GOVERNMENT PARASTATALS

(A CASE STUDY OF FEDERAL CAPITAL DEVELOPMENT AUTHORITY ABUJA)

ABSTRACT

The major problem associated with the overall performance of budget implementation in the public sector particularly as regard federal capital development authority can be attributed to lack of effective if the study is to control tools used in the parastatals. The major objective of the study is to examine the budgetary control measure in the public sector, taking a case study of F.C.D.A. The effectiveness of budgetary control procedure and the impact of budgetary control on the performance of workers in the federal capital development authority. The methodology use for the research is exploratory, descriptive and causal methods. The major finding was that junior workers were not allowed to participate in the planning of budget. Also there is no adequate financial reward for staff that performed above the budget level of activity, the employee were not motivated to assure the effective achievement of the objective of the budget. As a careful and deep researcher to this topic the study recommends that the management of F.C.D.A. should derive means of improving budgetary control measures. The study also recommends that all level of management should participate in budget planning and adequate financial rewards attainment of the budget objectives.

CHAPTER ONE

1.0     INTRODUCTION

Budgeting control appears to have been operative for a considerable time about two countries in government department in the United Kingdom were it is necessary to attempt to evaluate revenue with expenditure on a smaller scale.

The idea of budgeting is familiar to most people who have to balance their earning with their expenditure. However, it is only during the cost 50 years that such concept of cost control has been developed and tried in industries (Akinyeu 1991).

Since it’s introduction to industry and commerce however, adoption has been spreading rapidly particularly during the last 25 years and it is time to say that most large companies in United kingdom, united state of America, Europe and Nigeria are not operating the system. The annual budgeting procedure can therefore been seen to be perhaps the single  most important decision point of view as such, the leadership is able through the use of the estimated revenue and expenditure to arrive at a planned allocation of resources.

From Economic point of used, the short term budget constitute an important determination of a number of economic decision (Duru 1990) claims that in public sectors, funds are recklessly spent without deer-yard to budgetary control procedure.

In view of the above mentioned phenomenon in the public sector. This study as attempt to evaluate the budgetary procedure in government parastatals using Federal Capital Development Authority as a case study

Presently, when budget has been approved and contract had being awarded the Federal Capital Development Authority has two budgetary control tools.

1. Budget committees
2. Project committees.

Can the “Budget Committee” ensure that the budget is carried out as planned?

Would the “Project Committee” also ensure that the contractors carried out their contract as specified in the report of this committee decide whether to pay the contractors or not? Or can contractors be paid without severable report from the two committee?

These entire questions are from the bedrock of their study.

1.1     STATEMENT OF THE PROBLEMS

1. There is consensus among researchers that the problems associated with the overall performance of the budget in the use of public sectors particularly in the Federal Capital Development Authority can be attributed to lack of effective budget control tools which are used in the parastatals (Duku 1990) (Akiyelu 1990 and Oshisami 1992). Ola C.S (1982) lamented that the effect of budgetary control procedure on the implementation of budget also have an impact on budgetary control on the performance of workers.
2. It is disheartening to know that some projects which are included in some State Capital budget have not received enough scientific attention. Ageni (1984/16) content that apart from just conceiving and attaching unknown figures to them, no extra studies for acceptability are not been carried out.
3. The result is the continuous non-furnace in these sectors in the form of abandoned projects or non-functionality. Many projects have been abandoned because of lack of feasibility studies and evaluation of budgetary formulation and implementation.
4. It is in light of those prevailing situation that this study is designed to carried out on evaluation on it budgetary control in government parastatals.

1.2     RESEARCH QUESTIONS

In order to provide solution to the problem under investigation the following questions are to be solved in the study.

1. Does government regulation affects the growth of budgeting control of the Federal Capital Development Authority?
2. To what extent members benefit from government financial assistance?
3. Does government movement boast the budgetary control in the acceptance of the public sectors?
4. Would mismanagement of capital prevent the growth and development of the budget?
5. To what extent does the budgetary control affect quantitative expression of government parastatals?
6. To what extent literacy affect the defined plan of the budget?

1.3     OBJECTIVE OF THE STUDY

1. To examine the effect that budgetary control procedure has no the implementation of budget in Federal Capital Development Authority.
2. To evaluate the impact of budget control on the performance of worker s in Federal Capital Development Authority.
3. To identify the failure (if any) of the present budgetary controls used in Federal Capital Development Authority

1.4  RESEARCH HYPOTHESIS

The study is guide with the following.

Hi: budgetary control in federal capital development authority has no significant impact in FCT.

Ho: budgetary control in federal capital development authority has significant impact in FCT.

1.5 SCOPE AND LIMITATION OF THE STUDY

1. This study is initiated to investigate on evaluation of budgetary control in government  parastatals narrowed down to federal capital development authority Abuja (FCOA) it seeks specially to determine the effectiveness of budgetary control tools used in federal capital development authority to evaluation the impact of budgetary control in the performance of workers in federal development authority and identify the failure of the present budgetary control in federal capital development authority (FCDA).
2. It would have proper to take a critical survey of the whole country but due to some inevitable factors like the limited time frame for this study financial constrain and other academic demands, the study is limited to government parastatal with specifics reference to the federal capital development authority. The study covers a period of 2years (2000-2001) lastly, there were some obstacles on the part of the executive of the parastatals unwilling to give out information considered to be confidential and secret.

1.6     SIGNIFICANCE OF THE STUDY

A study of this nature will be of tremendous importance to our educational planner in the sense that it will enrich their knowledge in   planning and improve their curriculum.

The study will also be significance to foreign experts who come to the                country to asses the budget and budgetary control put in place in federal   capital authority. It will be of importance to government establishment mostly these at the federal level. The study will further be relevant in the sense that it will be as a managerial tools to enhance productivity in the entire government parastatals. This will also help to enhance accountability and avoid wasteful spending.

1.7 DEFINITION OF TERMS

For this study some relevant concept (key) have been carefully selected and clarified. Budgetary, Ayeni (1984/13) defines budget as a planned estimate of revenue and expenditure for a specific period of time. I work (1930/38) used the concept of budget to mean an instrument of authorization to appropriate funds for specifics sets of expenditure. Whilt koontzetal (1987 defines budget as a formulation of plan for a given future period, expressed in numerical term in his part.

Sills (1964) defines budget as the art of living within an economic constraints. “Adeyugbe and Joshua (1989:20) art cordites as saying”. Budget is a kind of financial master plan of a government, deficit a unified view of the scope and character of its administration and policies.

According to Encyclopedia Piratical (1973) a government budget is the forecast by a government of its expenditure and revenue of particular period of time. From the definition above it’s as a process whereby the plan of government of an organization art translated into an itemized authority and systematic plan of operation expressed in monetary term for a given period usually one year.

1. Education: for the purpose of the study evaluation means to find out decide, the amount or value of asses from oxford dictionary.
2. Control: it can be defined as the power of authority to direct, order or restrain an activity from the oxford advanced learner dictionary.

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