Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Declaration
I hereby declare that this dissertation is my original work and has not been submitted for
a degree a ward to any other University.
Signature
.
ESUKU JOSEPH
2003/HD10/269U
Date
..
Approval
This dissertation has been submitted for examination with the approval of the following
supervisors;
Signed
Professor Munene JC
Date
..
Signed
...
Dr. Isaac Nkote Nabeta
Date
Dedication
This research work is dedicated to my father and mother, and more so my wife whose
prayers, love and unending support has led me to this heights in my life time.
Acknowledgement
First and foremost to the almighty God, without you things should have been difficult.
My special thanks go to the Administration of Makerere University Business School for
providing me with a scholarship in post graduate programme to pursue a degree of
Masters in Business Administration (Accounting and Finance). In the same note, special
thanks deeply go to my supervisors Professor Munene JC and Dr. Isaac Nkote Nabeta for
their committed and continued guidance that has made this work a success.
Special thanks go to Mr. Moya Musa for the continued concern and encouragement he
offered me during the times of my research work. Special thanks to my colleagues whose
guidance and comments enhanced greatly the accomplishment of this study. Particular
thanks go to Tukamushaba Eddy, Olinga Raphael, Abeja Martha, Nkutu Geoffrey.
Acronyms
AC
Agricultural College
BTVET:
CIMA:
HTI:
MOE&S:
TI
Technical Institute
TS
Technical School
UCC:
TABLE OF CONTENTS
Item
Page
Declaration
Approval
(i)
(ii)
Dedication
(iii)
Acknowledgement ..
(iv)
Acronyms ..
(v)
Table of Contents
(vi)
List of Figures and Tables.
(ix)
Abstract .
(x)
1.0
Background
..
1.1
1.2
1.3
1.4
1.5
1.5.1
Subject Scope .
1.5.2
1.6
1.7
2.0
2.1
Introduction
2.2
2.2.1
2.2.1.1 Budgeting..
2.2.1.3 Planning.
10
12
2.2.2
13
2.2.2.1 Monitoring.
13
2.2.2.2 Control
15
2.2.3
16
16
2.2.3.2 Feedback.
18
2.3
19
2.3.1
Performance Measurements.
21
2.4
24
3.0
Methodology ..
30
3.1
Research Design .
30
3.2
30
3.3
Sampling Design
30
3.4
Sample Size .
31
3.5
Sources of Data ..
31
3.6
31
3.7
32
3.8
32
3.9
33
3.10
33
4.0
34
4.1
Introduction
..
34
4.2
Demographic Statistics
..
34
4.2.1
35
4.2.2
36
4.2.3
37
4.3
Budgetary Controls
38
4.4
40
4.5
Correlation Analysis
41
4.5.1
42
5.0
44
5.1
Introduction
44
5.2
44
5.3
46
5.4
..
..
8
47
6.0
49
6.1
Introduction 49
6.2
Conclusions
6.3
Recommendations
6.4
52
6.5
References ..
53
6.6
Appendices .......................................................................................
59
6.7
65
.... 49
................................................................................. 50
Table (1):
Table (2):
31
Sample Size........................................................................
32
coefficients.
35
35
Table (4.2):
36
37
Age...................................................
38
40
10
Organization......
42
11
43
12
Table (4.6);
59
13
Performance.......
59
9
Table (4.7):
Correlation Matrix
Table (4.8):
Regression Analysis
Abstract
This research was induced by the eminent low financial performance of BTVET
Institutions in terms of Infrastructure Development, Service Delivery and Expenditure
Related Activities. This research work examines the extent to which the Budgetary
Controls lead to a positive perception on the Perceived Financial performance.
A cross sectional and descriptive survey design was adopted using a representative
sample of 32 BTVET institutions out of a population of 111 institutions. Self
administered questionnaires were used to collect data from respondents. Factor analysis,
Rotated Matrix and chi-squares were used to determine the budgetary controls and
perceived financial performance of BTVET institutions while correlation and regression
coefficients were used to determine the relationship between budgetary controls and
perceived financial performance.
monitoring and control and analyzing and feedback significantly correlated with
perceived financial performance in BTVET institutions.
This therefore calls for the payment of enormous attention by the management and staff
in BTVET institutions to ensure that the implementation of budgetary controls is done
focusing on Budgeting and Planning, Monitoring and Control and Analyzing and
Feedback in order to enhance perceived financial performance.
11
CHAPTER ONE
1. Background to the Study.
In a move to establish more tertiary institutions in the country, the government of
Uganda formed a task force in 1982 mandated with the responsibility of
establishing UCCs. Three (03) UCCs namely: Aduku, Kabale and Soroti were
established as a pilot scheme in 1983 and two more UCCs namely Packwach and
Tororo were established in 1984, (Apono, 2002).
The Ministry of Finance and Economic Development in conjunction with
Ministry of Education and Sports funds the operations of these institutions. The
budgetary control is decentralized; the institutions submit to the Minister for
approval the estimates of incomes and expenditure of the Institute (the University
12
Percentage shortfall
2003/2004
144,144,000
90,221,732
37
25,875,622
40.9
food and non-food items for the financial year 2001/2002. This led to auctioning
of the college truck because of non-payment of a supplier.
In the F/Ys
2002/2003 2003/2004 the liabilities were UGX 31 million and UGX 38 million
respectively accruing both to staff salaries and suppliers of food and non-food
items. The reason advanced for such performance was inadequate funding, poor
identification of targets and allocation of resources. Thus, the need for effective
budgetary controls which is a challenge to government supported tertiary
institutions.
2.
3.
4.
(I)
(ii)
(iii)
5.
Research Questions.
(i)
(ii)
(iii)
6.0
7.0
i.
iii.
The Study shall add to the already existing literature on budgetary controls and
performance of the BTVET institutions.
iv.
v.
The study shall enhance the regulators and policy makers formulation of
appropriate policies, which enhance budgetary controls and financial performance
in BTVET institutions.
8.0.
Conceptual Framework.
The conceptual framework figure below explains the relationship between the
variables under the study, the budgetary controls (Independent Variable) and the
level of financial performance (Dependent variable).
Figure (i): Conceptual Framework
16
Budgetary Controls
Perceived Financial
Performance
Infrastructural
development
Service delivery
Expenditure
related activities
Intervening Variable
Government policies
Incentives
Source: (Literature reviewed from Blocher et a., 2002; Drury, Hilton et al., and Mordi
2000).
LITERATURE REVIEW.
2.1
Introduction.
The literature reviewed in the study is cited mainly from studies carried out in
17
2.2
2.2.1
Budgeting:
several important roles. Blocher, (2002), for instance argued that budgets help to
allocate resources, coordinate operations and provide a means for performance
measurement. Hilton (2000) agrees with this view and claim that the budget is
most widely used technique for planning and control purposes. The Institute of
Cost and Management Accounts defines a budget as a plan quantified in monetary
terms, prepared and approved prior to a defined period of time, usually showing
planned income to be generated and/or expenditure to be incurred during that
period and the capital to be employed to attain given objectives (Mordi, 2000).
Budgeting involves the preparation of an itemized financial statement showing
what the expenditures are going to be over a given period, usually a year. The
budget may also show what income the institution is likely to generate during the
same period.
Cole (1996), noted that fundamental to the success of any organization, is drawing
a budget plan and putting it in operation. Further, notes that creating a budget is
important as it enforces an organization to carefully consider the expected
demand for its products, services and the resources required to meet that demand.
It also translates the higher priorities for the organization into the appropriate
resources required to achieve those priorities, as it would be difficult to allocate
resources due to scarcity without a budget plan. It creates the baseline against
which actual results can be compared, budgets act as a basis for measuring
performance in organizations and help in directing the activities of the
organization hence giving earlier signals on variances in sufficient time to take
corrective actions. Clarke and Toal (1999) too are of the opinion that budgets are
19
still essential and can for example, be incorporated as part of the financial
component of the balanced scorecard. Pierce and ODea (1998), also subscribe to
the view that budgets are still relevant to todays business environment.
2.2.1.2
Budget Functions:
the
parts
or departments.
Budgets
facilitate
coordination
through
Budgets perform the function of control, which is the art of comparing where you
are (actual performance) to where you are supposed to be (Budgeted) so that
corrective action can be taken. It is necessary to ensure that plans as laid down in
the budgets are being achieved. Through control, organizational activities are
monitored and performance is evaluated (Sebbi, 1994; Lewis, 1996).
Mean while critics of budgets claim that budgets are bad for business, are no
longer adequate and are fundamentally flawed as a planning and control
mechanism in todays complex and highly uncertain business environment
McNally, (2002). Stewart (1990) claims that experts criticize budgets as being
ineffective. According to him, Budgets, says experts, control the wrong things,
like head count and even profits (Stewart, 1990, P. 179). Prendergast (2000) lists
a number of problems with budgeting for planning and control purposes. First, a
lot of guesswork is involved in the budgeting process. Second, budgets are
increasingly inaccurate as a result of shorter product lifecycles and the rapidly
changing business environment. Finally the extent of budget gamesmanship, he
argues that over the years, budgets have resulted in a conflict between top
management and their subordinates.
21
2.2.1.3
Planning:
Planning as part of the Budgeting system involves a long range planning, strategic
planning and short term planning (Sizer, 1989). Further, emphasizes that short
term budgeting must accept the environment of today, and the physical human
and financial resources at present available to the organization.
2.2.1.4
Planning Process:
The planning process ensures that managers do plan for future operations, and
consider how conditions in the next year might change and what steps they should
take to respond to these conditions.
23
Kimbrough and Nunnery, (1988) describing the procedures for school budget
preparation points out the following; that teachers should be asked to submit items
to included in the estimates, that the lists of estimates by the different teachers and
heads of departments be assembled, reviewed during a special meeting consisting
of the school heads and the bursar. According to them, plans and estimates must
reflect serious considerations when budgeting. This process sets out the various
requirements of the agreed priority to ensure its feasibility. In particular, the plans
should include considerations of cash resources available, and the cash needs and
further ensure that any differences are covered by the available resources. This
calls for a coherent plan including all parts and individuals of the organization.
The previous studies reviewed above, therefore lead to the conclusion that there
is an increasing perception that budgets are less useful in today highly challenging
business environment. Consequently knowledge about budgeting practices is
useful to provide insights into whether budgets are still appropriate planning and
control tools. Its the researchers intention to explore whether such a budgeting
24
Monitoring:
office has ultimate control to set the final budget. Through this process of
monitoring, analysis and control, the problem of "ratcheting" is generally avoided
(Kelly, 2003).
A budgetary monitoring and control process assumes that expenditure must agree
with the budgeted plans and maintains information about expenditure. Financial
control is also one of the most important aspects of budgeting. By means of
budgetary control, which means comparing actual results with planned results and
reporting on the variations, a control frame is set for management.
2.2.2.2
Control:
Control basically provides the ex-ante motivation to achieving the budget and the
ex-post reinforcements necessary to ensure future motivation (Kerr, 1979). Hence
the perception of variances as extremely important and valid measures of
performance is upheld. The evaluation of budget performance should be based on
a comparison of actual performance with an adjusted budget to reflect the current
circumstances of the environment under which managers are actually operating
in. a budget therefore, assists mangers in monitoring and controlling the activities
for which they are responsible. By comparing the actual results against the
budgeted amounts for different categories of expenses, managers can ascertain
which costs dont conform to the original plan requires their attention. This
process enables management to operate a system of management by exception,
which means that a managers attention and effort can be concentrated on
significant deviations from the expected results. Thus enabling managers to
identify inefficiencies and appreciate control action thought to remedy the
situation.
By means of budgetary control that is, comparing actual results with planned
results and reporting on the variations, a control frame is set for management. It
helps expenditure to be kept within the planned limits (Alesina and Perotti, 1996).
Carr, (2000), argues that in order to achieve the expected output results,
monitoring and evaluation is necessary. Monitoring and evaluation maintains
27
Budgetary Analysis:
28
The variances could be corrected through strict enforcement of use of the budget
whenever expenditure is incurred. This is preventive control. This means that
previous over expenditure attributed to the use of resources without particular
reference to the budget as a control tool, are eliminated. Items on which money is
spent are budgeted for and any expenditure incurred is only after reference to the
budget (Mathis, 1996).
According to Kreitner (1989) corrective action is necessary when the final results
deviate from plans. The gaps are addressed through punishment of those staff that
spends more than the budget without good reason. In situations where gaps were
not anticipated and they occurred, it is necessary to redraw the budget so as to
have the objectives match the cost incurred and this is feedback control.
2.2.3.2
Feedback:
Feedback is an important role of budgeting for attaining the expected quality and
standards in planning, control and leadership and staffing. According to Cook
(1968), feedback is generally positively associated with budget performance. It
focuses on the extent to which employees have achieved expected levels of work
during a specified time period. The reports should be simple and suitable for the
level of understanding for the user. They should be presented promptly to enable
timely actions to take place. Reports should be accurate to enable the making of
corrective decisions based on the reports. However, the extreme accuracy should
not be at the cost of promptness. It has to be noted that the principle of exception
should be utilized where possible.
to the top management so that necessary corrective action may be taken (Arora,
1995; Foster, 1987).
2.3
Financial Performance.
Financial performance is a management initiative to upgrade the accuracy and
timeliness of financial information. Areas of emphasis include reducing erroneous
payments and strengthening the management of government held assets.
Performance budgeting is an integrated annual performance plan and annual
budgeting that shows the relationship between program funding levels and
expected results. It shows that a goal or set of goals should be achieved at a given
level of spending. Performance budgeting identifies the relationships between
money and results, as well as explaining how those relationships are created. A
program performance budget defines all activities, direct and indirect required by
a program for support in addition to estimating activity costs (Kydland and
Prescott, 1977).
Performance as defined by McGill (2001), and Bestbreur and Henk (2003), is the
agency outputs, with an agencys program structure linking outputs to long-term
objectives, which then creates a performance budget. This process helps to
32
annually track and report programme results and provide reasons for performance
not meeting expectations (Thor et al., 1999).
2.3.1
Performance Measures:
Research made by several scholars has indicated that in this modern world where
there is relentless technological change, changing customer tastes, demand and
uncertainties in the market, on financial indicators have become essential for
characterizing an organization future performance (Guthrie, 2001). Non financial
measures reflect activities an organization performs in order to execute its
strategy and as such serve as predictors of future smooth operations of an
organization (Amaratunga, 2001). They are operational and provide managers,
supervisors and operators with information required for daily decision making.
Gonahasa (1994), noted that a proper college budget should show all activities the
college intends to do in the coming year, such as purchase of instructional
materials, payment of salaries and allowances for support and lecturing staff,
suppliers, feeding of students, capital developing and income generating projects
if any and this point to a budgeting paradigm, which is based on the establishment
of financial performance measures. These measures act as a gauge of what the
institution feels important, and how well it will reflect good financial
performance.
The above kind of planning transforms program activities and performance goals
into budgetary (financial) terms. However, most tertiary institution plans do not
exactly and clearly explain how funding would be allocated to achieve
performance goals, if at all they are set. Its actually identifying the objective
without identifying the means for achieving it. These identify as challenges to
performance budgeting among other related challenges to performance budgeting
implementation such as: lack of credible and useful performance information
within the institution, difficulty in achieving consensus on goals and measures
because of low levels of participation, hence dissimilarities between programs and
fund reporting structures and the limitations of information and accounting
systems.
ODI (2003) concurs with OPPAGA (2003), who asserts that the amount of
resources given to public programs influences their performance in achieving
desired results; that performance budgeting enhances service delivery and
infrastructural development. Performance budgeting provides Managers with
flexibility to utilize resources to achieve performance results. Long-term
perspectives characterize it; identification of the mission, goals and objectives;
linking strategic planning information with the budget; development and
integration of performance measures into the budget (Mwabilu, 2004). The study
therefore shows how BTVET tertiary institutions evaluate their budgets in relation
to the set objectives and goals in a bid to measure whether the limited resources
have been spent effectively and efficiently. Hence, the potential of the
35
2.4
Control ensures that objectives as laid down in the budgets are achieved.
36
Control ensures
that
objectives are being achieved. A comparison is therefore made between plans and
actual performance, the difference between the two is reported to management for
taking corrective action. This control process is not possible without planning
(Lewis, 1996).
Inadequate budgetary controls lead to objectives not being clear and performance
not being achieved or satisfactory. This reduces output because employees do not
38
know or are doubtful about what to do, when and how to do it. They spend a lot of
time seeking clarifications from executives. Thus leading to delays in
identification of deviations from plans, which lead to failure in goal achievement
and hence poor performance (Phyrr, 1970)?
Cyert and March (1963), stated that evaluation standards should be very fine
statements derived from budgetary planning goals of the previous time period,
budgetary control experience with respect to budgetary goals of the previous
years and from the experience of comparable performance aspects with respect to
the past periods. Once this is done, budgetary control will be achieved and the
organizations objectives will be properly implemented and hence efficiently
achieved.
In the case of BTVET tertiary institutions, which are not profit making
organizations, income is usually from the privately sponsored students being
supplemented by government funds. In most cases the planned budget has higher
sum to be the expenditure for the coming financial year than the actual sum of
funds released. Government releases within a particular financial year are very
minimal compared to the increased demands of the institutions. Thus the need for
more infrastructure development in form of construction of more lecture halls,
accommodation facilities, library facilities, dinning and recreational Halls, etc
which increases the expenditure generally.
During the budget year, the budget committee should periodically evaluate the
actual performance and re-examine the organizations future plans if there are any
changes expected, this will normally mean that the budget plans should be
40
adjusted (Benlo, 1990). This revised budget then represents a revised statement of
formal operating plans for the remaining portion of the budget period. The
important point is that the budgetary process does not end for the current years
once the budget period has started. Budgeting should be seen as a continuous and
dynamic process. Budgetary Control properly applied can be immensely valuable
to Managers of all levels. It is, however, not without dangers, unless skill and
intelligence are exercised both in devising the budgets and implementing the
plans to achieve them, performance may not be realized as planned.
CHAPTER THREE:
3.0
Methodology.
This section focused on the research methods and the instruments used by the
researcher to carry out the study. It provides a description of the research design,
area of study, sample description, data collection and analysis methods.
41
3.1
Research Design.
A cross-sectional research design was used and was combined with descriptive
research design and Correlation studies to establish the relationship between the
independent variable (budgetary control) and the dependent variable (perceived
performance).
3.2
3.3
Sampling Design.
The Quota sampling and purposive designs were used to select 32 institutions
from the four regions namely eastern, northern, western, and central from a
population of 111 BTVET institutions. The respondents included administrative
and lecturing staffs that were selected using the judgmental and purposive
methods because they were in the best position to give the required information.
3.4
Sample Size.
The sample size comprised of 32 BTVET institutions in Uganda. From these
therefore, a total sample of 32 institutions was considered sufficient as per
Roscoes 1975 rule of thumb that states that sample sizes of 30 and above are
sufficient.
42
3.5
Sample Size
5
10
8
8
1
32
Sources of Data.
Primary Sources
The primary data was collected from the BTVET institutions by use of
questionnaires.
Secondary Data
This included review of official policy documents, journals, reports and seminar
papers.
3.6
3.7
Perceived
financial
performance
43
was
measured
by
Infrastructure
3.8
Reliability Coefficients
VARIABLE
Budgeting and Planning
Monitoring and Control
Analyzing and Feedback
Financial Performance
Infrastructure Development
Service delivery
Expenditure related activities
Source:
Primary data.
CRONBACH ALPHA
0.9031
0.9269
0.7111
0.6742
0.7164
0.6344
0.6817
The Cronbach Coefficients were above 0.6 and therefore the scales used to
measure the study variables were consistent and therefore reliable.
3.9
Cross tabulations tables, chi-square tests were used to determine the budgetary
controls and financial performance. Pearson correlation Coefficient was used to
determine the degree of relationship between budgetary controls and perceived
financial performance. Multiple regression analysis was used to predict the
perceived performance of BTVET institutions.
3.10
(i)
(ii)
The research was basically on financial related matter; some respondents were
not willing to give the required information calling it classified, however
with an introduction letter from the Director Graduate research Center and
assurances that data will be held confidentially 122 responded.
CHAPTER FOUR:
4.0
4.1
Introduction.
This chapter deals with Presentation, Analysis and Interpretation of data collected
regarding demographic factors in respect of sex, age, level of education and
45
4.2
Demographic Statistics.
The demographic factors such as the Sex, Age, Level of education and Period
worked with Organization at individual level were analyzed using cross
tabulations as shown in the tables 4.1 4.4 below.
Table (4.1):
Valid
N
Percent
122 100
122 100
Cases
Missing
N Percent
0
.0
0
.0
Total
N Percent
122 100
122 100
122
122
46
100
.0
100
Level of
Education
Certificate
Diploma
Degree
Total
Source:
Count
% within Level of
Education
% within Sex
% of Total
Count
% within Level of
Education
% within Sex
% of Total
Count
% within Level of
Education
% within Sex
% of Total
Count
% within Level of
Education
% within Sex
% of Total
Count
% within Level of
Education
% within Sex
% of Total
X 2 = 17.143
Male
7
Sex
Female
7
Total
14
50.5
8.3
5.7
27
50.5
18.4
5.7
7
100
11.5
11.5
34
79.4
32.1
22.1
44
20.6
18.4
5.7
12
100
27.9
27.9
56
78.6
52.4
36.1
6
21.4
31.6
9.8
12
100
45.9
45.9
18
33.3
7.1
4.9
84
66.7
31.6
9.8
38
100
14.8
14.8
122
68.9
100
68.9
df = 3
31.1
100
100
100
31.1
100
Sig. = .001
Primary data.
In the table 4.2 above 69% of the respondents were male employees of at the
BTVET institutions while 31% were female employees, 52% of the male have
first degree and second degrees, while 31% of the women both having first and
second degrees. There is therefore a relationship between the level of education
and sex of the respondents (Chi-Square = 17.143, df = 3, P-Value = 0.001).
47
Age
40-49 Years &
above
Total
Level of
Education
Certificate
Diploma
Degree
Total
Source:
Count
% within Level of
Education
% within Age
% of Total
Count
% within Level of
Education
% within Age
% of Total
Count
% within Level of
Education
% within Age
% of Total
Count
% within Level of
Education
% within Age
% of Total
Count
% within Level of
Education
% within Age
% of Total
X 2 = 59.071
14
14
100
64.6
11.4
28
0
0
0
6
100
11.5
11.5
34
82.4
43.1
23
24
17.6
20
4.9
32
100
27.9
27.9
56
42.8
73.9
19.7
12
57.1
160
26.3
6
100
45.9
45.9
18
66.7
18.5
9.9
78
33.3
20
4.9
44
100
14.8
14.8
122
64
100
64
df = 9
36.1
100
36.1
Sig. = .000
100
100
100
Primary data
In the table 4.3 above 64.0% of the respondents were in the age bracket of 2039years and 36.1% were in the age bracket of 40-49 years and above. The older
the staff in terms of age the greater the opportunity for one to continue with
further studies. 57% of the respondents who were aged 40 years and above had
first degrees, while 42% of the respondents aged between 20 and 39 years had
first degrees. Therefore, there is a relationship between the level of education and
the age (Chi-Square = 59.071, df = 9, P-Value = 0.000).
4.2.3
Level of
Education
Certificate
Count
% within Level of
Education
% within period worked
with organization
48
Total
14
100
100
47.1
11.5
% of Total
Diploma
Total
Source:
Count
% within Level of
Education
% within period worked
with organization
% of Total
Degree
Count
% within Level of
Education
% within period worked
with organization
% of Total
Masters and Above
Count
% within Level of
Education
% within period worked
with organization
% of Total
Count
% within Level of
Education
% within period worked
with organization
% of Total
X 2 = 73.173
11.4
25
0
9
11.5
34
73.5
26.5
100
64.1
20.5
24
15.3
7.4
32
27.9
27.9
56
42.9
57.1
100
88.7
19.6
0
54.2
26.2
18
45.9
45.9
18
100
100
0
0
63
30.5
14.8
59
14.8
14.8
122
51.7
48.4
100
100
51.7
100
48.4
df = 6
100
100
Sig. = .000
Primary data.
The tables 4.4 above 48.4% of the respondents have worked with their
organizations for a period of seven years and more 14.8% have masters and
above, 26.2% have first degrees and 7.4% have Diplomas. 51.7% of the
respondents who have worked with the organization for a period between one and
six years, 11.4% have Certificates, 20.5% have Diplomas and 19.6% have first
degrees. The more years one spends in an institution, the more chances one has to
continue with studies as shown above. Therefore, there is a relationship between
the level of education and the period worked with organization (Chi-Square =
73.173, df = 6, P-Value = 0.000).
4.3
Budgetary Controls.
This section presents findings on research question one, which is aimed at
examining the budgetary controls at BTVET institutions. Perceptions were
49
50
.897
.863
.859
.850
.832
.832
.830
.826
.824
.810
.808
.806
.803
.800
.792
.785
.770
.767
.767
.764
.754
.737
.734
.732
.720
.715
.708
.676
.672
.660
.642
.625
.577
3
Analyzing
& Feedback
Monitoring
& Control
Programmes and plans are the basis for allocating financial resources
We have clear result targets in the budget
Budget outcome goals and objectives are linked to programmes
Management discusses with staff goals to be met
The budget structure facilitates a clear linkage between the money and the results
We normally identify high priority programmes to include in the budget
We describe the tasks to be carried out in the budget
The resources are released on time to carry out the activities
Decisions made here are based on plans and programmes in the budget
Planning helps us to know the type and level of resources to provide
All programmes are classified according to the objectives
Programme activities are clearly indicated
The basis for re-allocating resources in your institution is the performance indicators
Budgets are always used as a standard of measuring financial performance
Planning helps to manage the programmes of the institution
Performance indictors are normally included in the budgets of our institution
We normally formulate our objectives from the set goals
Budgets take into account the three year development plan
Our budgets are for more than one year
We start with planning for our programmes
We frequently use resources to achieve results
We design appropriate programmes to accommodate short-term objectives
My institution always follows budget procedures
We combine planning with the budgeting process
The finance committee of the Governing Council scrutinizes budget proposals
Programmes and plans are the basis for getting financial resources
Each budget activity is allocated appropriate resources
The budget facilitates the estimation of future cost implications
Our budgets emphasize outcomes
We always present the budget to the governing council/BOG for approval
Our budgets are based on the needs identified by our sections/departments
Programmes are analyzed before selecting the different resources
Priorities for the coming year are set at workshop sessions/budget conference
Budgeting
& Planning
Components
.542
.524
.513
.423
.333
.770
.763
.754
.734
.716
.692
.669
.664
.659
.646
.646
.645
.583
.490
.460
.459
The implementation of the budget activities is the responsibility of the department manages
.863
.840
.809
.791
.759
.757
.685
.677
.646
.641
.556
.547
.509
Management always takes timely corrective actions when adverse variances are reported
Eigenvalues
Percentage of variance
Cumulative Percentage variance
Source:
Primary data.
23.894
11.281
5.440
35.072
16.590
8.000
35.072
51.662
59.663
The table 4.5 above indicates that, only components with Eigenvalue greater than
1 were extracted. Items or questions with correlation coefficients above (positive
or negative 0.3) were considered indicating that the elements of budgetary control
include the following; Budgeting and Planning with percentage Variance of
35.072, Monitoring and Control with Percentage Variance of 16.590 and
Analyzing and Feedback with percentage variance of 8.000 giving a cumulative
51
4.4
Table (4.6):
52
3
Expenditure
activities
2
Service
delivery
1
Infrastructure
development
Component
.804
.789
.784
.740
.698
.670
.636
.627
.856
.823
.750
.687
.654
.627
.565
.478
.805
.760
.719
.701
.653
.538
.470
.318
Eigenvalue
Percentage of variance
Cumulative Percentage of variance
Source:
9.872
41.133
2.688
11.201
2.191
9.125
41.133
52.334
61.459
Primary data.
4.5
Correlation Analysis.
Pearsons correlation coefficient matrix was used to show the relationship
between budgetary control and perceived financial performance as indicated in
the table 4.7 below.
Table (4.7):
Correlation Matrix
Budgeting
&
planning (1)
1
1.000
Monitoring
Control
(2)
&
.616**
1.000
Analyzing
feedback
&
.371**
.703**
1.000
53
(3)
Budgetary
Control
(4)
Infrastructure
Development
(5)
Service
Delivery
(6)
Expenditure
related
activities
(7)
Financial
Performance
(8)
Source:
.752**
.874**
.691**
1.000
.204*
.612**
.658**
.525**
1.000
.134
.394**
.423**
.209*
.743**
1.000
.199*
.591**
.536**
.483**
.886**
.698**
1.000
.295**
.580**
.893**
.519**
.880**
.861**
.803**
1.000
Primary data.
Table (4.8):
R2
Standardized
Model
coefficients
Beta
(Constant)
ted
t
Sig.
0.984
.327
Analyzing& Feedback
0 .432
4.569
.000
0 .386
3.662
.000
0.176
2.334
.021
Source:
Adjus F
R2
0.510
0.497
40.883
0.000
Primary data.
In the table 4.8 above, Analyzing and Feedback, Monitoring and Control and
Budgeting and Planning were linearly correlated to Perceived Financial
Performance (F = 40.833 and Sig. = 0.000). Showing that, 49.7% of Perceived
Financial Performance was explained by Monitoring and Control, Analyzing and
Feedback and Budgeting and Planning. Analyzing and Feedback contributed more
(Beta = 0.432), Monitoring and Control (Beta = 0.386) and Budgeting and
Planning (Beta = 0.176). The Standardized Regression Model is expressed as y =
x1 + x2 + x3 +, therefore the standardized regression model for the study is y
= 0.432af + 0.386mc 0.176bp. Where AF = Analyzing and Feedback, MC =
Monitoring and Control and BP = Budgeting and Planning as shown above.
CHAPTER FIVE:
5.0
DISCUSSION OF RESULTS/FINDINGS.
5.1
Introduction.
This chapter set out to study budgetary controls and perceived financial
performance in BTVET institutions. In this chapter results presented and
interpreted in chapter four are discussed. Part one of this chapter deals with
55
5.2
57
5.3
According to Gonahasa (1994), a proper college budget should show all the
activities intended for the coming year, thus pointing to a budgeting paradigm,
which is based on the establishment of financial performance measures which
measures act as a gauge to most important issues in the situation and how well it
will reflect good financial performance.
However, most tertiary institutions plans dont exactly and clearly show how
funding would be appropriated to achieve performance goals. Its actually
identifying the objectives without identifying the means for achieving it. The
BTVET institutions are faced with challenges to performance budgeting
implementation among which, lack of credible and useful performance
information, difficulty in achieving consensus on goals and measures because of
low levels of participation are the major drawbacks.
OPPAGA (2003), on the other hand asserts that the amount of resources given to
58
5.4
Relationship
between
Budgetary
Control
and
Perceived
Financial
Performance.
The findings show a significant positive relationship between budgetary controls
and perceived financial performance in BTVET institutions. All the three
components of budgetary controls; budgeting and planning, monitoring and
control, and analyzing and feedback significantly and positively affected the
financial performance and its components of BTVET institutions.
59
CHAPTER SIX:
6.0
6.1
Introduction
This section deals with the conclusions, recommendations and areas for further
60
6.2
Conclusions
In general, this study has examined the budgetary controls and perceived financial
performance of BTVET institutions in Uganda. The relationship between
budgetary controls and the perceived financial performance is clear especially
when one considers the implementation of its components by the staff in BTVET
institutions. The implementation of budgeting and planning, monitoring and
control, analyzing and feedback will affect the perceived financial performance in
terms of infrastructure development, service delivery and expenditure related
activities in the BTVET institutions.
61
6.3
Recommendations
This section, deals with policy implications promoting Budgetary Controls among
the staff in Tertiary Institutions through continued partnering with Ministry of
Education and Sports and Ministry of Finance, Planning and Economic
Development.
There is need for the creation of Budgetary Controls knowledge within the
curriculum of Tertiary Education system to enhance perceptions on the
implementation of Budgetary Controls which is at stake in BTVET institutions.
There is need for sensitization drive through training, workshops, seminars and
meetings on the values of implementation of Budgeting and Planning, Monitoring
and Control and Analyzing and Feedback.
The Ministry of Education and Sports and Ministry of Finance, Planning and
Economic development officials should focus attention on important points in the
implementation process of the Budgetary Controls and adequately monitor the
62
The Ministry of Education and Sports should provide the BTVET Institutions
with the guidelines for the setting of goals, objectives, programs designs and
formulation of performance measures.
The use of a Vote book must be taken up for purposes of Monitoring and Control
Financial Performance in the BTVET Institutions.
The BTVET Institutions need to adopt the bottom top approach to allow
effective participation by all levels of management in the decision making
processes, which requires comprehensive planning and approval framework
consistent with processes for Budget construction.
The future research should attempt to investigate other factors other than
budgetary controls components that affect the perceived financial
performance in BTVET Institutions.
63
(ii)
There should also be an attempt to gather data from other sections of the
Educational system like primary and secondary other than BTVET
Institutions.
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69
Appendix (I)
12.0
ACTIVITY
Writing and presenting Proposal
Designing data collection instruments
Testing of the instruments
70
DURATION (WEEKS)
12
4
3
Data collection
Data Analysis
Data interpretation and Presentation
Report Writing
Submission of Final Report
TOTAL
Source:
Self designed.
4
3
2
3
1
32
Appendix (ii)
13.0
ITEM
Stationery and Printing
Research Assistants
Secretarial
Photocopying
Binding
Transport
Miscellaneous
TOTAL
Source:
Self designed.
Appendix (iii)
Category of staff:
Administrator
Bursar
Lecturer/Teacher/ Tutor
2.
3.
Age of respondent:
20-29 years
Female
30-39 years
40-49 years
above 49
years
4.
A Level
Diploma
Ist Degree
4-6 years
Please respond to the following statements by indicating the extent to which you
agree or disagree with the activities.
72
1.
2.
3.
4.
5.
6.
7.
8.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
73
(3)
(4)
Not sure
Agree
(2)
Disagree
Statement
1.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
(2)
(3)
(4)
(5)
Disagree
Not Sure
Agree
Strongly Agree
Statement
Please respond to the following statements by indicating the extent to which you
agree or disagree with the activities.
We often receive guidelines from the Ministry of finance on the budget process
Funding of budget programmes is based on institutions approved budget
The Governing council/BOG normally checks on the progress as planned
The budget performance is always communicated
The perceived level of budget monitoring and control in my institution is excellent
The perceived level of budget monitoring and control in my institution is adequate
The perceived level of budget monitoring and control in my institution is inadequate
We always make adjustments regarding budget performance
We normally monitor the deviations
There is clear tracking of programme results in my institution
We often monitor the budget deviations
Control of the budget activities is done by only the head of department
We use vote books to ensure adherence to the budgeted activities
The implementation of the budget activities is the responsibility of the department
managers
The budgeting process is expedited by use of budget centers
We often hold budget conferences to review performance
The costed activities are always reviewed by the executive committee
74
1
2
3
4
5
6
7
8
9
10
(4)
(5)
Strongly Agree
(3)
Not Sure
Agree
(2)
Disagree
Statement
Please respond to the following statements by indicating the extent to which you
agree or disagree with the activities.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
75
(2)
(3)
(4)
(5)
Disagree
Not Sure
Agree
Strongly Agree
Statement
15
16
17
18
19
20
21
22
23
24
25
26
Thank you for your time, dedication and cooperation in this study.
76