A CRITICAL ANALYSIS OF BUDGETARY CONTROL: ITS EFFECTIVENESS AND EFFICIENCY IN A NON PROFIT MAKING ORGANIZATION

CHAPTER ONE

INTRODUCTION

The essence of budgeting is to provide an essential element of control in an organization in order to facilitate the achievement of set objectives. The control process is the fundamental organization link between the manager and the other people in an organization is a non-profit making organization output various with the objective with which they were established. The objective of the public organization could be social and or development in nature, however, this does not mean that public organizations can not make profit if government policy changes to privatizing or commercializing them. The main structural problem of this type of organization is the sacrifice of the organization’s profitability for social efficacy which must be achieved in research institute Badeggi falls into this category. With the use of the budget as a control tool, there is Ned for planning the performance of an organization.  Planning  as  defined by C.I.M.A is an establishment of objective and the  formulation evaluation and selection of the formulation of the policies strategies  tactics and action required to achieve this objective, by planning activities in advance more economical use is made  of the  organization resource and facilities and a fairly accurate estimates of its future resources requirement can be determined. One of the outstanding features of budgetary control is that policy plans resource s and activities of the organization are coordinated integrated and controlled to achieve the desired objectives. Budgetary control is a means of providing some centralizing control where activities and also responsibilities are decentralized. It is also the use of budget for assigning responsibilities planning and controlling performance and guiding managerial and other activities of the firm towards the achievement of organizational objectives. It involves, setting out clearly defined forgets of output, income, and expenditure for each section of the organization. Embodying these forgets of performance in sectional divisional and departmental  budgets co0mpariing these budget standards with actual performance .identifying deviations or variances from the budget and taking corrective action or bringing performance in line with budget targets .this is because all the heads of departments in the organization are involved in the preparation and implementation of budgets, while management5 control the whole activities of the organization. Budgets are prepared as a result of committee work. Each committee constituting representatives of various departments and functions to be controlled .the heads of departments are responsible for the respective department budget  Each executive or manager can then fully appreciate his responsibilities, as they are reflected in his department budget. Any deviation of the actual result from the estimate and forecast are traced back to the department head or manager.

1.1   PURPOSE OF THE STUDY

Most of the non_ profit-making organization in Nigeria are governmental in nature, this is because they are mainly set up for social and developmental purposes, this usually leads to poor planning and control measures. The purpose of this study is to critically analyze the budgetary control system as a planning tool in non_ profit-making organizations using National cereals Research institute as a case study. This research work intends to bring about a clearer understanding of the need for effective and efficient budgetary control in a  nonprofit making organization which will also be of benefit to other similar Organizations leading to an improvement in government-owned organization budgetary control systems.

1. 2    STATEMENT OF PROBLEMS

public sector and other nonprofit making organizations are often noted for inefficiencies and poor management, which is as a result of poor planning through repetitive budgeting. Recent studies in the area of budget and resource allocation have shown a lack of proper analysis. There is a general lack of the concept of why we have a budget at all. This issue calls for immediate investigation of budgeting as a tool for resource planning and performance control and to recommend how it can function properly.

1.3.    OBJECTIVE OF THE STUDY

The main objective to be achieved from this research work is that it will; serve as a means of measuring the output or the work performed and to compare it with the cost of input. This comparison provides a basis for indicating efficiency and effectiveness. The process of comparing actual results with a planned and evaluating variance if any set control frameworks which helps expenditure to be kept within an agreed limit.  If these deviations are noted, so that action can be taken to correct this in the future.

1.4  SCOPE OF THE STUDY

The study intends to cover budgetary control as it affects National cereals Research institutes {N.C.R I}. it will examine its budgeting control as a measure of performance.

1.5  RESEARCH HYPOTHESIS

The underlisted hypothesis from the framework for carrying out the study

HO: Budgetary control effective and its efficiency is not facilitated by the financing inducing the role of government.

HI: Budgetary control effectiveness and its efficiency is facilitated by the financial inducing role of government

HO: Effectiveness and efficiency of budgetary control do not depend excessively on the provision of basic infrastructures.

H1: Effectiveness and efficiency of budgetary control expend excessively on the provision of basic infrastructures.

HO: Budgetary control is not the hallmark for the development of the economy

H1: Budgetary control is the hallmark for the development of the economy.

1.6    LIMITATION OF THE STUDY

The constraints include: Time factor, the period within which the research work is expected to be completed is rather too short for any meaningful work to be done. financial difficulty, considering the bad economic situation in the country, effort to have sufficient research material to be able to write extensively on the Subject matter proves abortive.

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