CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Budget
is an important tool in the management resources and
finance in the public sector. According to Igwe (2005), it is a comprehensive plan, expressed in naira terms by
which operating programme is effective for a given period of time Budgeting is therefore a tool, which enhances
management of resources (be it
financial, human or material) in the public sector.
According
to Adams (2006), the public sector refers to all organizations
which are not privately owned and operated but, which
are established, run and financed by the Government on behalf of the public.
This definition
points out clearly that the public sector consist
of organization whose control lies in the hand of the public (or the Government) as opposed to private owners
and whose objectives profit is not the primary
motive of the business or enterprise.
Enterprise
is a complex man-made ruining coupling system and a contractual association
with body: It is very necessary to the business activities of its process and
implements control.
According
to modern management guru Robert Simon's theory, management control achieve
management objective in the public sector. Through the implementation of series
of management control lever, so it should increase the important of budgetary
and devote energies to the management of budgetary control to ensure that
business objectives and performance management of smooth realizations .
Public sector used internal
budget for financial expectations and set financial controls, in addition, the
internal budget can be used for purpose such as identifying cost and
determining prices (for example, as part of cost recovering arrangements
financial performances.
Government budget mainly
shows activities which the government proposes to spend revenue. It also
contains a list of various sources of revenue from taxes customs duties and
sales of crude oil expected to generated during the period. Budgets like all
plans are based on part experiences. It is also an attempt to use what happens
in the past to plan for the future.
The
rational budget is often divided between the three tiers of Government
(federal, state and the Local Government).
Each of these tiers of
Government prepares, passes, and implements
its own budget.
Each
fiscal year budget is aimed at achieving some specified objectives, hence it is
called different names, example: Budget of hope, budget of consolidation,
budget of reconstruction and so on.
The
budgetary process in private sector is seen as an integral part of both
planning arid control. This running or operating a government without a good
foundation.
In recognition of these
facts, Lucey (2002) further affirms that Budgeting is about making plans for
the future, implementing those plans and monitoring the activities to see
wheathere they conform to the plan.
Further, budgeting involves
apportioning the approved budget over a sub-periods within the relevant budget period
according to a recognized pattern of expenditure (or revenue).
Internal budget are
typically phased using monthly intervals phasing the internal budget assist
managers with timely identification and analysis of budget variances. In
phasing the current year budget, it is important to adjust for known fluctuation
factors where material, including where cash and accrual timings differ.
1.2 STATEMENT OF THE PROBLEM
Currently,
Nigeria's National Budget runs into Trillions of naira.
This however appears not to translate into high standard of living of Nigeria
owing to the fact that substantial part of the budget
most often ends in private pockets as misappropriate funds. Yet our roads keep
developing pot holes in immense magnitude. No drugs and medical equipment in
our hospital, our educational institutional keeps going through different types
of crises ranging from calls for improved pay package to calls for improvement
of infrastructure in our schools to enhance teaching and learning.
Our
rural areas suffer from prolong neglect, resulting in rural-urban migration. As
unemployment is also on the steady rise, resulting to youth restiveness, armed
robbery, kidnapping and other social vices.
How
come that we have all these magnitude of problems confronting us, and yet our
government officials kept returning to the treasuring millions of Naira as
unspent budgeting allocation?
These
and other questions are begging for answer thus this study aimed at preferring solutions
to the problems
1.3 OBJECTIVE OF THE STUDY
The
general objective of the study is to show the important of budgeting in every
organization. The specific objective of this work are as follows:
i.
That budgeting brings about growth,
development and
expansion to every organization embarking on it. Be
it private or public,
ii. That budget is inevitable
in every organization be it private or public, even
at the family level,
iii.
To stress on the need for 100%
implementation of annual budget so as to bring about growth
and development and to
enhance the quality of lives of Nigerians,
iv. To highlight the necessary of budgeting in the public sector,
v. To explain the
fact that budgeting in the public sector is critical to
the efficient management of scarce resources in
Government, ministries and parastatals.
vi. To form against the frequent return of
unspent budget
provision to the state treasury.
vii. That budgeting brings
or gives, direction or a guide to every organization (public or private), etc.
1.4 RESEARCH QUESTIONS
i.
In what ways can budgeting enhance
efficient management of resources in the public sector?
ii.
The need for budget discipline in the public
sector.
iii.
That budgeting provisions be spent on
statutory approved expenditure so as to avoid misappropriation of funds.
iv.
That the government inaugurates (put in place)
a machinery to monitor the proper implementations of the budget.
v.
That all relevant government agencies
should be held accountable for among non-implementation of the budget in the
area of authority.
vi.
Effective oversight, review and
communication: Involvement and comment of senior management is critical to
developing an effective internal budget, one approach to involving senior
management is through the establishment of a budget committee (often the same
as, or a subcommittee of, the executive committee) to oversight the internal
budget process.
1.5 FORMULATION OF HYPOTHESES
The
following hypotheses guiding this study relate to the objective and
significance of the study.
Hoi:
The nation's public sector cannot be productive without an efficient and effective budgeting system.
HO2:
That the budgeting which spells out the limit of financial statement operation of Government in a give fiscal year is
not fully implementation by relevant government agencies/ ministry official
charged with that responsibility in the public sector.
Ho3: That budgeting as inevitable as it is, does not
impact
Positively on the lives of the rural dwellers due to
prolong years of neglect and poor level of implementation.
1.6 SIGNIFICANCE OF THE STUDY
The budget is a management
tool, which facilitates the task of goal achievement, be it at the family level
or in the private or public sector of the economy. This implies that budgeting
is highly essential in facilitating the solution to management's problem both
in the private and public sectors.
1.7 LIMITATIONS AND DELIMITATION OF STUDY
In
the course of carrying out this research, one was faced (confronted) by so many
challenges, which posed a threat to its, successful completion, except that God
Almighty had been on my side for a successful accomplishment of this numerous
task. Those limitations are as follows:-
i. Due to the inability to reach out to the entire population by way of oral/ face to face interview. Only a sample of
the entire population was reached out to.
ii. Most pieces of
information needed to aid this research work were
tagged "Top Secret" "Classified" "Confidential"
and therefore, not accessible.
iii. Due to limited
resources, much could not be accomplished as earlier
expected,
iv. Low co-operation from Council Staff (especially the top management cadre constitutes a minor setback to the research work.
Budgeting
process in the public sector very vast and technical this requires careful
studies and indept analysis.
However,
in the course of this research work, "budgeting as a tool for efficient
management of resources in the public sector", population, sample,
enquires, data collection and analysis were all limited to Izzi Local
Government Council, Iboko, Ebonyi State.