Appraisal of Budgetary System in the Public Sector.
INTRODUCTION
Background to the Study
Planning and control are major activities of management in all organization and budgets are central to the process of planning and control.
Budgeting and budgetary control both at management and operational level look at the future lay down what had to be achieved while control checks whether or not the plans are realized and put into effect corrective measure where deviation or short or short fall is occurring-Budgeting control is not a new technique.
It has a profit as the motivating force to known how performance increases. Budgetary control is therefore the system of management control and accounting in which all the operations are forecasted and planned in advances to the extent possible and the actual result compared with the forecasted and planned ones.
In brief it is a system to assist management in the allocation of responsibility and authority, to provide it with aid for making, estimating and planning for the future and to facilitate the analysis of the between estimated and actual performance.
In order that budgetary control may function effectively, it is necessary that the concern should develop proper basis of measurement or standard with which to evaluate the efficiency of operations a system of standard costing. 2 Beside this, the organization of the concern should be so integrated that all lines of authority and responsibility are laid, allocated and defined.
This is essential since the system of budgetary control postulate separation of functions and division of responsibilities and thus requires that the organization shall be in such be planned in such a manner that everyone from the managing director down to the shop foreman will have his duties properly defined. Budgetary control is an important aspect of financial planning and control.
If properly applied it will help in keeping operation and production of good and service in line with plans. When establishing budgets, standard must be used and it is this standard that will serve as a yard stick for measuring actual result.
This in effect means that budgetary control system is operated simultaneously with system of standard costing because both systems are inter-related.
LITERATURE REVIEW
This chapter covers the proposition of some theories and review of literature books on budget, budgetary control and performance of Public sector companies in Nigeria.
Conceptual Framework
“Budget” and “Budgeting”, a budget is a means to an end and not an end in itself. It is a short term plan and depicts that focus of a long term, objective of the organization.
It covers areas of responsibility of one specified person. In the way, budgetary control is a part of overall system of responsibility accounting within an organization. (Adeniji 2010).
Objectives of Budgetary Control
Mohammed (2011) opines that managerial goals are the focus of organizational activity. These goals are formulated into policy and translated, into however each goals. Policy, decision is limited by the numerous constraint impose on the firm.
Given this constraints, therefore, forward planning becomes vital in a competitive “profit and loss” economic system.
The success of each enterprise in realizing its optimum profit in each year will be determined by extent to which it establishes its objectives, develops, co-ordinate pans meet those objectives and exercise control of all facets of its activities, so as have actual results or exceed those planned.
REFERENCES
Adeniji, A. A. (2011). An Insight into Management Accounting.5th Edition, Lagos: Eltoda Venture Publishing Ltd.
Agundu, P., Kiabel, B. and Nnadi, M. (2011). “Corporate Budgetary Control in Nigeria`s Oil-Driven Economy: Survey of Government Owned Business Investments”, European Journal of Economics, Finance and Administrative Sciences.
Akintoye, I. R. (2008). “Budget and Budgetary Control for Improved Corporate Performance; A Consideration for Selected Food Beverage Companies In Nigeria, European Journal of Economics, Finance and Administrative Sciences.
Alvaro, C., Bauhaudin, G. and Frank, J. (2011) “Don’t Blame the Budget Process: An Exploration of Efficiency, Effectiveness, and Ethics”, Business and Management Pp 05-13
Chika, A. E. (2010). Budgeting and Budgetary Control in Business Organization: A Case Study of Emenite Nigeria Limited.
Eddy, O. O. (2004). Coping with Cost Accounting, 2nd Edition, and Lagos: Punmark Nigeria Publishing Ltd.
Fatona, L. A. (2004). Basic Cost Accounting, Volume 2, Lagos: Kinson Publishing Ltd.
Jide, A. M. (2010). “The Structure of the Nigeria Public sector Industry”, Paperwork Presented to Public sector Association of Nigeria.
Pandey, I. M. (2010). Financial Management, 10th Edition, Vikas Publishing House PVT Ltd., Jangpura, New Delhi
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