This study
assessed Budgetary Control mechanism in Nigeria and the implication of budget
implementation on National development. This study found that the existing
budget mechanism is significantly effective to attain better performance,
though stakeholders on budget implementation differs on the perceived extent of
compliance showing there has not been full compliance with the application of
budget mechanism. Actually budgetary control, its mechanism and its
implementation affects National development greatly.
INTRODUCTION
Government
at all level prepare and approve into law a summary of plan of the intended
revenues and expenditures which are made in advance of government fiscal year
concern a document called budget. It has become a routine because it is done
and reviewed each year. It is an expression of government financial role in the
growth process of economy.
In Nigeria contex of public sector
governance, budget preparation on annual basis has become a standard practice
backed by legal provision such as the constitution and financial regulations of
the various states. Studies of Lucy (2002), Lewis (2007) and Adams (2004) have
shown that at both public and private sectors, budget is a pivotal means of
translating the overall aims and objective of an organization into detailed
packages of actions, and determining the sources and uses of funds in order to
allow performance evaluation of the people who are entrusted with the
resources.
Government is held accountable to
the citizenry on allocation, custody and use of the state resources through
budget. The above functions are expected to be performed in accordance with
established rules, polices and practices contained in the government financial
regulation. Politicians, public analysts and scholars agreed that a well
formulated and properly implemented budget has the capacity to promote
socio-economic well- being of the people, finance economic development projects
and support public service administration. In spite of the potential benefits
accruable from budgeting, there is a general sleptims on budget performance in
Nigeria. This is not peculiar to Nigeria alone as 85% of the governments all
over the world fail to provide adequate information for the public to hold them
accountable (the Guardian 2009).
Concreted efforts are being made in
Nigeria towards maximizing benefit accruable from public spending through
monumental waves of budget reforms in the public sector. The needs for these
reforms were necessitated by perceived in satisfactory performance when
compared with the expectations of the budget provisions. Budget in public
sector arise from the need to demonstrate accountability with the attendant
goal of general improvement in the life of people.
Budget affects national development
through taxation. So budget have to be controlled to enhance National
development.
LITERATURE REVIEW
Different
theories have been developed on public sector budgeting some of which are
discussed. Bottom up theory is a normative theory of budgeting propounded,
according to Tucker (1985), by the early studies of pyhur in the early 1970s.
It involves the collection of all the needs or requests of the different units
of an organization presented in form of estimates of funds required for their
proposed activities which are summed up by the central authority to obtain the
total budget for the coming fiscal year. In order words, the approach adopted
in bottom up budget is best explain by zero- based-Budgeting method that starts
with base of zero and calculate cost of ruming each programme from the scratch.
While using the approach, each programme must be extensively reviewed to
justify its inclusions in the budget.
To down theory of budgeting emerged
in 1990s as a response to fiscal crisis encountered in budget formulation.
Under this theory, the central authority or top management echelon places
ceiling on the resources to be made available to the units. However, efforts
are made to meet undimished need of units so as to obtain a better performance
from their operation. Some of the
benefits of this theory are; ease of development, challenging the accounting
officer of units to formulate efficient budget by setting optimal priorities,
providing early guidance to budget planner thereby reducing or eliminating the
need to cut budget.
Incremetatlism theory is a budget
approach that begins with the use of previous year budget figures as the base
for next budget. Factors such as inflation, growths, changing conditions and
other information gathered from forecast of upcoming year are taken into
account. The paper work for preparing coming year budget is simplified. However
inefficiency and inadequacy of previous year are built into budget for coming
years.
Principal –Agent theory of budget
occurs in public sector in various manners (Leruth and Paul, 2007). It involves
specifying an observable contract between the principal and the agent. In
public sector, several principal agent relationship exist. For example, a minister
who can also be a political a pointed of
line ministries is a principal with the main objective of making the agents
civil servants under him/her to implement his promises. Another one can be seen
from the relationship between the legislature which makes sure that the
government implements the government programmes.
However, the relationship between
the ministry of finance and other line ministries is the broader form for
principal –agent relationship in public sector. The ministry of finance acts in
the capacity of principal while supervising line ministries (agents) to ensure
they produce a certain level of budget output as stated in budget. In the same
manner, the office of Accountant –General serves in the capacity of agent while
rendering account of stewardship the
executive to the populace who are the principal owners of the resources
at the disposal of the government. From a review of the above theories on
budget, it can be concluded that in public secotr, a budget is a legitmate
instrument used by the federal and state government to build –up the nation.