MANAGEMENT AND PUBLIC SERVICE COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

SSESSMENT OF BUDGETARY PRACTICE AND EVALUATION OF
JIGJIGA TEACHERS TRAINING COLLEGE
A Proposal Submitted to Accounting Department in the Partial Fulfillment
for the requirement Bachelor of Arts in Accounting
PREPARED BY:
S/N Name ID NO
1 Eidle Daud Ali EV/067/12
2 Alied Hashi Gudal EV/051/12
3 Najib Omer Ahmed EV/076/12
4 Abdifatah Ahmed Ali EV/013/12
5 Aisha Badal Mohamed EV/050/12

August, 2012
JIGJIGA, ETHIOPIA

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Table of content
Contents
Table of content ............................................................................................................................................ 2
CHAPTER ONE ........................................................................................................................................... 4
1. INTRODUCTION ............................................................................................................................ 4
1.1. Background of the study ........................................................................................................... 4
1.2. Statement of the problem .......................................................................................................... 5
1.3. Research Questions ................................................................................................................... 5
1.4. Objective of the study ............................................................................................................... 5
1.5. Significance of the study ........................................................................................................... 6
1.6. Scope of the study ..................................................................................................................... 6
1.7. Limitation of the study .............................................................................................................. 6
1.8. Organization of the study .......................................................................................................... 7
Chapter Two.................................................................................................................................................. 8
2. Literature Review ............................................................................................................................. 8
2.1. Theoretical literature ................................................................................................................ 8
2.1.1. Definition of Budget............................................................................................................. 8
2.1.2. Budgeting.............................................................................................................................. 9
2.1.3. Purpose of Budget .............................................................................................................. 10
2.1.4. Type of budget.................................................................................................................... 11
2.1.4.1. A fixed Budget ............................................................................................................... 11
2.1.4.2. The flexible Budget ........................................................................................................ 12
2.1.4.3. Zero-Base Budgeting (ZBB) .......................................................................................... 12
2.1.4.4. Traditional Budgeting System (TBS) ............................................................................ 13
2.1.4.5. Performance Budgeting System (PBS) .......................................................................... 14
2.1.4.6. Planning, Programming, Budgeting System (PPBS) .................................................... 14
2.1.5. The Budget Process............................................................................................................. 14
2.1.5.1. Budget Preparation ........................................................................................................ 16
2.1.5.2. Budget Utilization .......................................................................................................... 17
2.1.6. Concepts of under and over utilization of Budget............................................................. 17
2.1.7. Characteristics of Budget ................................................................................................... 18
2.1.8. Common problems/limitations of using budget ................................................................ 18
2.1.9. Budgeting for public institutions ....................................................................................... 18
2.1.10. Budgetary Controls ............................................................................................................ 19

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 2.1.11. Budget Control Benefits..................................................................................................... 20
2.1.12. Reason for Variations between Budgeted and Actual Expenditure .................................. 21
2.1.13. Components of Budgetary Control .................................................................................... 21
2.1.14. Budget Committee .............................................................................................................. 22
2.2. Empirical literature review..................................................................................................... 23
2.2.1. Empirical literature review in other countries ................................................................... 23
2.2.2. Empirical literature review in Ethiopia.............................................................................. 27
2.3 Summary of Literature Review ................................................................................................... 29
CHAPTE THREE ....................................................................................................................................... 30
3. METHODOLOGY ......................................................................................................................... 30
3.1. Research Design...................................................................................................................... 30
3.2. Research Approach ..................................................................................................................... 30
3.3. Source of data.......................................................................................................................... 31
3.4. Sampling techniques ............................................................................................................... 31
3.5. Method of Data analysis ......................................................................................................... 31
4. Budget ................................................................................................................................................. 32
5. Work Plan ........................................................................................................................................... 33
6. REFERENCE ...................................................................................................................................... 34

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 CHAPTER ONE
1. INTRODUCTION
1.1. Background of the study
Budget is a predetermined statement of management policy during a given period, which provides
a standard for comparison with results actually achieved (Brown and Haward 8th edition)
Budgetary practice and evaluation of the organization against many problems such as budget
deficit, unequal distribution of budget, etc. Hence, there should be an inviting effort to minimize
budget deficit (Chandra 1998 in page 205). This study attempts to give a good answer for why
budgetary practice and evaluation are assess on the organization and why budgetary practice and
evaluation are needed to the organization. The study focusses on the assessment of budgetary
practice and evaluation in the organization. Each year there is an inventory valuation process
which is taken up on regular basis out according to the growth of the organization, it was not fully
recorded and not taken the extent as a means of budget utilization.

Most of the time budget deficit should be controlled by finance organizations and by periodical
performance of the organizations. But taking this case into account there is a gap created with in
the organizational system which affect the goal of the organization. The study will focus to show
the solution of budgetary practice and evaluation, deficit and how to assess or utilize the budget to
the organization. The objective of the study is to assess the budgetary practice and evaluation of
Jigjiga teachers training college and to see the organization if they are earning a good return on
budget or not. If they are good position, it is better to keep on, if not to reduce them try to manage
it. Properly managed budgetary practice and evaluation is good to the organization development.
But absence of this the organization would be not fulfill their goals and objectives.

The budget at the right place supports the organizational objectives, customer service, return of
investment, promoting high profit and others objectives. Organization performance is different
from one organization to other organization, but all need adequate budgetary practice and
evaluation management, Assessment of budgetary practice and evaluation would be consistent
with the finance organization to utilize the planned budget.

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Generally, now a day, every business is required budgetary practice and evaluation, it should be
available management tool, express plan for the future year and it states how available resources
would be employed and what additional resource would be needed.

1.2. Statement of the problem

The organization always prepare annual budget for the current year activities by designed budget
proposal and its active implementation of objectives. Budget is one of the techniques used to
control the organization activity and it is also quantitative expression for set of time period and a
proposed future plan of action by management.
Budget is the formal expression of the plan and objective of management to the organization which
covers all phases of operations for a specific period of time.
Good budgetary practice and evaluation can be a vehicle for addressing of objectives and goals in
the most carful way. But in preparing budget many problems were take place and consequence
creates a great impact on the performance of the organization. The problems are using
inappropriate budget preparation procedures and not well utilization of budget for each department
within the organization.

The problem of budgeting is not only in preparation stage but also on implementation. The concern
of this study is to examine the Assessment budgetary practice and evaluation in particular area of
Jigjiga teachers training college. The study is primary focus on the organization, in order to give
the final solution and suggestion to the problems.

1.3. Research Questions

The researcher raised the following question that would be answered in this course of study.
• What are the factors that affect budgetary practice and evaluation of the organization?
• How to assess budget utilization on Jigjiga teachers training college?
• Why budgetary practice and evaluation is necessary?
• What means the organization use to prepare good budget system?

1.4. Objective of the study

1.4.1. General Objective
The general objective of the study is the assessment of budgetary practice and evaluation of Jigjiga
teachers training college.

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 1.4.2. Specific Objective
The specific objectives of the study are the following
• To see the organization effectively implement its budget or not
• To indicate for the finance organization how properly managed budget is important
successfully and to exhibit which factors affect the demand for budgetary practice and
evaluation.
• To know the purpose of budgetary practice and evaluation in Jigjiga teachers training college
• To identify ways and means by which the organization budgetary practice and evaluation in
Jigjiga teachers training college
• improved to best level expectation.

1.5. Significance of the study

This study will help the organization to have a good budgetary practice and evaluation to properly
budget the available resources and to effectively implement it. In addition to this study Will used
to provide ground line information for the organization about its budgetary practice and evaluation,
which is very help full for the organization advancement to provide a better service.
The study will help to examine about the factor affecting budgetary practice and evaluation in the
organization and create awareness to the organization about budget utilization and implementation,
which requires improvement. Furthermore, it will help to identify ways and means by which the
organization budgetary practice and evaluation is improved to the best level expectation, in
addition to the above the following play a great role to avoid the problem of budgetary practice
and evaluation for the future society
Initiate the employees to undertake a great measure over the problems concerning budgetary
practice and evaluation.

1.6. Scope of the study

To come up with effective and better study, it was better if the study would be conducted on over
all organization performance as compared with other similar organizations performance but due
to the financial and other constraints this study conducted only in Jigjiga teachers training college
therefore the study Will be limited to the organization.

1.7. Limitation of the study

In doing this research paper, the researcher faces the following problems.

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- During data collection some respondents are not willing to give information.
- Lack of sufficient materials from the expected organization
- Time and financial constrains

1.8. Organization of the study

This paper includes five chapters. The first chapter present the introduction part which reflecting
the background, statement of the problem objective of the study, significance of the study, scope
of the study, limitation of the study and organization of the papers. The second chapter deals with
literature review. The third chapter deals with methodology of the study. The fourth chapter deals
with data analysis and interpretation and the fifth chapter consists of summary, conclusion and
recommendation.

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Chapter Two
2. Literature Review
The study is based on the research done by different researchers about budgetary controls
who have different views on the subject and the main focus was to conduct the gap left by the
researchers i f any. Empirical literatures have also been reviewed in this section for
identification of existing literature gaps based on researches done.

2.1. Theoretical literature

Theoretically, budgetary control systems have been reviewed and explained by different
researchers while studying the budget performance of country’s public sector. Different theories,
terminologies and views have been provided by them about budget and budgetary control
systems of a budget.

2.1.1. Definition of Budget

The word Budget is adapted from French word “Baguette” meaning a little bag (Quick et.al,
2001), since during the annual presentation of the country budget the finance ministry head
bring the annual budget in a small bag to the parliament for presentation. A government
budget is a financial plan which details its aim and policies that it would like to accomplish in
the coming period along with its cost factors (Abijime, 2008:55).

Budget has been defined in different ways by different scholars, as per Reeve and Warren
2008, budget is an accounting device used to plan and control resources of operational
departments of governments and divisions. Budget can also be defined as a planned usage of
the resources of an organization in financial terms. Organizational purpose of the budget
process is to make optimal resource allocation decisions by increasing the capacity of the
organizational management (Gerasimos and Clifford, 2002). It provides direction to the
management about usage of resources and operations in a particular time period. According
to Omosidi el. at (2019), for the completion of proposed plans and to accomplish objectives,
budget guides the organization to make sure that resources are available at the right time and
in the right amount. Budget has detailed costing then in the planning and both plan and
budget provide detailed overview of what is intended and expected by which the objectives
can be achieved. As per Lysons and Farrington (2006) and Owler and Brown (1999), budget

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is an estimate or informed guess, about what will be needed in monetary terms to do the work.
It is important for an organization, project or department to have a budget to know how much
money it needs to carry out its activities and also forces it to be thinking in detail the
implications of its activity planning. As per Lucey 2003, Budget is used by the externals and
internals as a basis for deciding whether what you are asking for is reasonable and well-
planned. Since budgeting involves costs, it is crucial to estimate and control the kind of costs
to be valued when preparing a budget (Aslani, 2009). The costs an organization may need to
estimate can be categorized into operational costs, organizational costs, staffing costs and
capital costs. This makes budget a powerful tool which controls the implementation of the
plans through programming of its cost.

2.1.2. Budgeting
Budgeting is a process of obtaining budget required to allocate resources to projects and
programs in an organization. According to Peaver (2013) budgeting is a process of preparing
a detailed statement of financial results that are expected for a given time period in future. In
this definition two words expected and future have specific meaning, expected means it may
or may not happen and future means time to come, so combining these two we can sa y
budgeting is a financial statement which may happen in the time to come.
Budgeting system is an organization framework for controlling spending and revenue allocation
for achieving their planned objectives which require effective budgetary control. According to
Fadi Baker (2013) budgetary control is a system that uses budget as controlling and planning
mechanism. Budgetary control system in an organization involves in budget preparation,
reporting on tasks accomplished, variances between actual and budgeted performance and
taking remedial measures so that budgeted performance and objectives can be achieved
effectively. If variances occur reasons are ascertained and a recommendation of remedial action
to match performance with the plan is done (Coates, 2005). Making of budgetary control
statements and immediate investigation of revealed variances provide the best basis for
bringing operations into line with the plan, or where there have been substantial changes in
circumstances making agreed alterations to the plan (Lucey, 2003). The major objective of
budgeting highlighted by Herath and Indriani (2007) are a means of forecasting and planning,

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channel of communication and co-ordination, motivational device, means of evaluation and
control and source of information for decision-making by the managers.

2.1.3. Purpose of Budget

Budget purpose is to plan, coordinate, communicate, motivate and evaluate the manager’s
performance. During formation of an organization long term goals are planned at the time of
incorporation but the annual budgets is the one the manager’s form for detailing of these
plans to put them to implementation. In a scenario when annual budgeting does not exist, day
to day operation pressure mount which might discourage managers for conceiving plans for
future operations. In such a situation budgeting process make sure that managers plan for
future operations in reference to the coming future and correspondingly plan steps to be
incorporated to deal with those situations (Drury, 2012).
According to Horngren et al (2012) coordinating the activities of all units of the organization
is essential because all the concerned managers might work to their best of the abilities but to
achieve the organization objective their activities have to be coordinated towards one goal
which can be done by following the planned budget.
According to Warren et al. (2009) the main aim of budget is to fix goals, formulating and
implementing plans to achieve those goals and comparing from time to time the actual results
with the goals established. To achieve this objective budgeting has impact on planning, directing
and controlling activities of the managerial functions. Planning set goals for the managers
to make decisions in line with the organization objectives. Budgeting supports the planning
process by making all departments to fix their goals for the future. Budgeting process highlight
the areas where operations can be improved and this also motive employees to achieve set
targets in the efficient way. Directing is concerned with decisions and actions taken to achieve
budgeted goals. A budgetary unit of an organization is known as responsibility center and each
of them is managed by a manager who has authority and responsibility for achieving the
center’s planned goals. Controlling involves comparing actual performance of the budget users
with the budgeted goals. Comparing performance with budgeted goals provide information
about variation if any to managers and employees about their performance. The responsibility
centers can use this information to adjust the activities of the departments in future.

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 2.1.4. Type of budget
Budget has been defined differently by different authors depending upon the nature of
organization such as government entity, public sector, manufacturing, consultancy or NGO’s.
The types of budgets utilized in these organizations also differ depending upon the type of
operations being done to achieve their objectives.
According to Abhijit (2016) there are five main kinds of budgets, namely functional budget,
financial budget, cash budget, flexible budget and zero-base budgeting. Functional Budget
is a budget related to the main functions of the organization activity. Financial budget is
made up of all budgets which are important for the performance of the organization. Cash
Budget is the summary of estimated cash receivables and estimated cash payments over the
budget period. Some organizations because of uncontrollable external factors, it is difficult to
accurately estimate future level of difficulties, so to handle such situations the planned budget
is kept flexible meaning the budget can be altered depending upon the present circumstances.

2.1.4.1. A fixed Budget

Fixed budget is a type of budget which does not recognize the cost relation to the different
operation levels, thus providing no place for changes in the planned budget. Pogue (1997)
described fixed budgeting as being based on one level of activity to which the various costs
are related like materials, labor and overhead costs in his article titled ‘Budgeting as an aid to
management performance’. In fixed budgeting control of cost is difficult because if actual
activity is different from budgeted activity, then the budgeted costs which are measured by
management information and action, becomes meaningless. Since fixed budgets fix the expense
limit that cannot be exceeded, the researchers and analyst take this as a constraint, also this
property of fixed budget limit the comparison between the actual performance and the
budgeted result. Fixed budget is a single budget with no analysis of cost and the purpose of it
is at the planning stage when it serves to define the objectives of the organization, when there
is no requirement of cost analysis into fixed and variable. The fixed budget can’t be used
for control purposes; it’s only by chance if the level of activity turns out to be exactly as planned
(Kpedor 2012).

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 2.1.4.2. The flexible Budget
Consists of several levels of activity and recognizes how costs vary in relation to the various
output levels. Harper (1999) defines flexible budget as a budget which defines what should
have happened in regard to each budget fact. The flexible budget compensates for the rigidit y
of the fixed budget and it basically points out that forecast can be wrong. By understanding
that different costs are necessary to meet different levels of activity in business, the flexible
budget implement effective controls to affect this policy. It is particularly useful for control
purpose with the actual output achieved. Flexible budget is a technique, according to
Cherrington, Hubbard and Luthy (1988) that is used to adjust the budget for various level of
business activity. In developing the flexible budget, expected or budget costs relationships
are mentioned so that the budget can be easily adjusted to any level of business activity y.
Maher and Deakin (1994) agreed that a flexible budget indicate cost and profits for virtually
all feasible levels of activities. The main requirement of a flexible budget is that expenses
should be divided into three different categories one fixed expenses meaning expenses which
will remain constant irrespective of levels of activity second variable expenses, the expenses
which will change in relation to levels of activity and lastly semi-variable expenses, which
need to be analyzed into the fixed and variable expenses (Abhijit, 2016).

2.1.4.3. Zero-Base Budgeting (ZBB)

The conceptual frame work of ZBB was designed by P yhrr (1970) who defined ZBB as an
operating, planning and budgeting process which require each manager to justify his complete
budget request in detail from scratch. According to Lucey (2002) zero based budgeting is also
called priority-based budgeting, its main requirement is that all activities are justified and
prioritized before decisions are taken relating to the number of resources allocated to each
activity. Appiah-Mensah (1993) also argued that ZBB are prepared without reference to the
budget of the preceding period. A fresh look is made at the activities of the organization and
based on the new circumstances and entirely new budget is prepared. It is applied in three stages
such as the decision unit (where operations can be individually identified and evaluated),
second the decision packages (each decision unit manager submits three budget packages first
the lowest level of expenditure second the expenditure required to maintain levels of activities
and lastly expenditure required to provide an additional level of service or activity) and in the

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end agreed package will be part of budget. This method is called Zero Base budgeting since
the existing system is discontinued and the existing system is reviewed on the assumption of
Zero-Base.

2.1.4.4. Traditional Budgeting System (TBS)

TBS is the application in the budgeting system which incorporates the preparation of the
budget in line with the nature of income and expenditure. As this system mostly depends
upon the method of considering materials and line-item, hence it is also called 'Line-Item-
Budgeting system. As per Schick (1972) the importance of line itemizations and the level of
expenditure play important role in the line-item- budgeting to estimate resources, are related
to objects of expenditure. Since TBS ignores the evaluation of outputs, for what purposes the
inputs are going to be used in the budget is not important (Shultz and Harris 1965). TBS is also
known as incremental budgeting, as it considers the existing budget for decision-makers to
make their estimations and calculations for the coming year's expenditure. The system takes
only the previous year's budget items into account and then increases their spending levels as
a requirement of next year budget, but as per Schultze (1966) this is the weakness of the
system and states that "unless a new program is proposed, there is no examination of the
basic program structure”.
Wildavsky (1974) emphasizes that there are no disagreements on TBS, according to him, any
possible disagreement between the participants would be likely be upon the level of spending
rather than programs. To resolve this matter, the most applicable way for them is to make
some increase or decrease in the expenditure as policies and programs possible results are not
considered at all important in TBS. It is one of the fundamental aspects of TBS that final
approval body of the budget takes into account only list of categories included in the budget
and their level of spending, based upon that the approval body decides whether to accept or
need some increase/decrease in the level of spending.

TBS is not suitable to help decision-makers to consider long-term financial plans; its
unsuitability is stressed by Carpson (1968) that through TBS, decision-makers tend to justify
the decisions already taken rather than data that can be used to evaluate alternative possibilities.

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Although TBS is the oldest budgeting system among the latest budgeting systems, it is still
being used by a large number of authorities (Rubin, 1992). Hence the system should not be
regarded as completely old, but rather it would be implemented and re-adopted to these days'
budgetary requirements.

2.1.4.5. Performance Budgeting System (PBS)

Performance budgeting system is categorized in-between TBS and Planning, Programming,
Budgeting System (PPBS). To establish administration and communications within and among
other departments in the public sector led to the development of PBS. This budgeting system
requires measurement of results, outcomes, and impacts (Melkers and Willoughby,
1998). PBS was first implemented in the USA in order to overcome the weaknesses of TBS.
The main aim of PBS was not to focus on objectives, but rather on activities which means
that identifying programs by PBS is not depended on expenditure required, but on activities.
Another aim was to sustain efficiency and economy in the public sector (Babunakis, 1976).

2.1.4.6. Planning, Programming, Budgeting System (PPBS)

Implementation of PPBS was first done in the Department of Defense in the USA, after
observing the results it was then implemented in the public sector. Its implementation was
attributed to the weaknesses of TBS the existing budgeting system. The main objective of
implementing PPBS was to enable departments to improve efficiency and effectiveness of
their resource’s utilization. PPBS linked program information to planning in budgetary
decision-making and evaluated public services on output basis. The need for PPBS was mainly
felt in the area that public sectors have limited resources against increasing public demand. To
provide improved welfare to the individuals and optimize their demand in spite of scarce
public resources, PPBS was proposed as an alternative system to public budgeting in 1960s.

2.1.5. The Budget Process

In a normal budget planning, the organization begins with a planning process where the
problem that needs to be addressed is looked at and the specific role of the organization in
addressing itis defined. This is related to what actual activities need to be undertaken to
achieve the planned impact (Owler and Brown, 1989). There are four stages in the budget cycle
namely budget preparation (drafting/design process), budget approval and appropriation

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(legislative process), budget execution (implementation process) and budget control
(performance monitoring - audit and evaluation process) which help in attaining the planned
activities of the organization. Several stakeholders are involved at each step of the budget
cycle, with some contributing exceedingly more than others.

Budget process in Ministry of Education followed as per the guidelines from MoF. Ethiopia’s
Ministry of Finance follows budgeting system in which recurrent and capital expenditure are
considered separately (MoF, 2009). MoF is the main body for the preparation of the federal
budget in Ethiopia, in consultation with the different ministries that are the users of the
budget. Council of Ministers Financial Regulations No 17/1997 delegate the responsibility for
detailed government financial policy directives formation and implementation in all areas of
government finances, developing and maintaining standards of work and conduct for all public
bodies, internal auditing functions and preparation of financial plan for the country are the main
responsibilities of the Minister of Finance. Each ministry/public sector before receiving the
budget call letter from Ministry of finance with their budget ceilings needs to start their
internal budget preparations.

Process of budgeting in Ethiopia involves numerous steps, the first step is the sending of
budget calls and ceiling notifications to the ministries by the MoF and on receiving the budget
call ministries submit their budget request as per the set regulations. Final budget is submitted
to Parliament by the Prime Minister for approval after careful scrutiny of the budget request from
the ministries by MoF. The budget that is approved by the Council of Peoples Representatives
is a detailed budget. After the approval of the budget, it becomes the responsibility of the civil
service to implement that budget. Implementation of the approved budget is also known as budget
execution MoF (2006). Disbursing funds already allocated is the implementation phase of the
budgetary process, also monitoring that the funds are spent for the intended purposes only. It is
the responsibility of Ministry of finance to inform all budget users their approved recurrent and
capital budget (MoF, 2006). Every Ministry submit a monthly disbursement request to the
MoF which has detailed report of the previous month expenditure and outline a request for
the next month allocation of funds based upon a detailed work plan.

15
The MoF, fund disbursement department disburse the requested and approved funds for the
ministries. The budget registrar in the disbursement authorization department keeps all the
records of the original approved budget, transfers and any undisbursed allocations. Since it is
difficult to plan the next year budget accurately as future circumstances can’t be predicted
precisely, so as the situation demands these variations can be legally adjusted to compensate for
the unexpected circumstances. Approval of budget adjustments are hard to get because these
can be avoided by proper planning and budgeting but these adjustments are permitted by law
either through budget transfer or budget supplement. Public sector budget process involves
preparation, utilization and control systems as main factors of budget. Based upon these factors
different researchers have elaborated public sector budget process.

2.1.5.1. Budget Preparation

Public budget preparation is one of the difficult tasks that any country goes through, Falk
(1994) states that budgets are financial outline of a country’s plan for the financial year.
Budget reveals the source of funding and the mode of expenditure for the planned activities,
precisely budget sets the limit of public funds. Budget is not the only criteria for budgeting it
needs base for preparation, but as per Andrews and Hill (2003), priorities of expenditure
depending upon the urgent and less urgent needs of the country makes the basis for budget
preparation. The less urgent needs are taken care when sufficient funds are available. One
method is to set limit on budget requests, this has an advantage of making budget users
prepare requests that include only financially feasible options (Lee, 1992). This is often known
as fixed-ceiling budgeting. Limiting budget funds request make agencies to request next year
budget based on their set of priorities.

Schiavo-Campo (2007) stated a successful budget preparation process combines top-down

direction and bottom-up planning, which involves the process of reviewing the proposed
budget, debating with the staff who prepared it and bargaining on the priorities/expenses of
the activities involved, which lead to the formation of efficient budget. Efficient budget can
help narrow the range of option and improve the quality of decision making (Malcolm, 2003).

16
 2.1.5.2. Budget Utilization
According to Allen and Tommasi (2001) it is possible to utilize inefficiently a well-prepared
budget but it is not possible to utilize well badly prepared budget. Once the budget gets the
approval of legislature, the government public sector start working towards the achievement
of their targets set in the budget plan. Budget utilization is where resources are used to
implement targets set in budget preparation. Spending public funds effectively, to meet targets
while ensuring value for money is challenging than planning how to utilize the funds. Budget
utilization depends on various factors, such as the ability to deal with changes in the
macroeconomic environment and the utilization ability of the organization concerned. Budget
utilization system should have relevant budgetary/appropriation accounting system for effective
expenditure control because it is necessary to track transactions at each stage of the expenditure
cycle and movements between appropriations or budget items (Schiavo-Campo
and Tommasi, 1999). There should be distribution of responsibilities for budget utilization,
budget appropriation, budget revisions, other issues related to budget utilization and the
monitoring of budget execution. Budget execution cover activities related to the
implementation of policies and tasks related to the administration of the budget. The distribution
of responsibilities in budget management should be done according to the agencies
respective areas of responsibility and accountability.

2.1.6. Concepts of under and over utilization of Budget

According to Peters (1998) poor planning, no links between policy making, planning and
budgeting, adequate expenditure control, inadequate funds for operatons and maintenance,
inadequate synchronizing between budget formulated and its actual utilization, lack of
appropriate accounting systems, on time availability of budgeted funds and poor cash
management, were the weakness in resource allocation and utilization of budget. These factors
lead to the under or over utilization of budget in the organization.
According to Allen and Tommasi (2001) overutilization of the budget is caused by non-
compliance of the spending limits defined in the budget. By defining the spending limits,
cash allocated for specific expenditures are generally controlled, off budget spending results
in overutilization of the budget. Payments made through irregular procedures in some countries,
are not controlled against the planned payments and are therefore an important cause of

17
overruns. Lack of compliance can be overcome by strengthening the audit system, reporting
system and by making sure the effectiveness of the basic budget execution controls. Overruns
can also be caused by deficiencies in budget preparation, budget utilization process and
monitoring at each stage of expenditure. In a number of countries, the official budget is under
spent. It does not mean that there is appropriate usage of budget as planned, in these countries
this is because of poor governance by the management and not accomplishing some activities
in the course of the financial year. Overestimated budget and irrelevant projections of the
revenue required lead to budget revisions during budget utilization. In most cases
underutilization and overutilization is the outcome of discrepancies in budget preparation on
the bases of activities and targets planned for the financial year.

2.1.7. Characteristics of Budget

According to Einwiller (2002) budget is planning and control device which is prepared for
fixed future period and it reflects planed income, expenditure and capital to be invested.
Budget is prepared in financial and quantitative terms, these are the main characteristics of
the budget for an organization.

2.1.8. Common problems/limitations of using budget

It’s a universal truth that every positive side has a negative side associated with it, similarly
budget forming and implementation have many advantages but at the same time it has some
limitations associated with it because of some teething problems in its execution. According
to Nwoye (2015) the problems faced are, that budget provide only estimated values so the
results cannot be measured accurately, magnifying unimportant expenses and limiting important
ones help in hiding inefficiencies of the budget and generally budgets are prepared on annual
projections so this hampers the quick results.

2.1.9. Budgeting for public institutions

In the earlier times of kings and monarchies there is documentation regarding the existence of
royal treasury and accountants (the head of treasury), auditors use to manage the royal treasury.
Now in the modern democracies the legislatures are managing the public funds which are
collected in form of taxes and revenues generated by government through several other
projects/organizations. The upcoming of the people welfare, generated the need for managing

18
these resources in efficient and effective way which gave way to budgeting of these resources
for proper utilization of them. Budgeting is a means to carry out several objectives of the
public organizations (Prachi Juneja, 2020). Budget is a financial procedure providing targets
and directions, but for results and to help managers to achieve their objectives it must work
efficiently and effectively. According to Matei and Dinu (2009) the public budget is a balance
between revenues and expenditure. Public budgeting is planning operations of the public sector
in the government for a specific period.

According to Amey (1979); Bremser (1988); Douglas (1994) and Yang (2010) budgeting in
business helps to formulate the policies and systems for maximum profitability. Public budget
is a complete and to the point document indicating what economic and non-economic activities
government wants to undertake within a fiscal year with special emphasis on policies, strategies
and corrective actions. In case negative variances occur and the polic y achievements are
maintained with public revenues and expenditures projections, this reveals budgetary control in
the public sector. In every public or private organization, it is important to prepare a budget
and employ some controls for the purpose of transforming policies to reality and coordinating
financial controls in order to accomplish the objectives. Oshasami (1992) mentioned in
“Government Accounting and Financial Control” that the resources available are not always
sufficient to serve the needs and opportunities, which the Government would like to serve or
restrict, in such scenario budgeting is the source of decision-making as well as allocation of
resources. Awoyemi (1984) states that the budget is a tool of accountability, for management
and economic policy purpose and associated features of public sector. According to Oshasami
(1992) planning and programming budgeting is a process designed to make government and
public cooperation and activities more effective and more efficient. Public sector activities
involve planning, programming, budgeting, implementation, monitoring and evaluation, which
guide the sector towards its planned goals.

2.1.10.Budgetary Controls
Budget control is important for management to keep track of actual performance and make
sure that the objectives of budget are achieved (Kpedor, 2012). According to Okapanchi and
Muhmmed (2013) the budgetary control is incorporated to keep actual performance of the

19
organization in line with the planed performance, so that the organization objective is
achieved effectively, there by meaning that if budgetary control exist the budget objective of
the organization are easily achieved.
Similarly, according to (Nwoye, 2015) controlling cost, preparation of budget, coordinating
the departments and establishing responsibilities are the prime factors of budgetary control
system. Budgetary control system incorporate comparing actual performance with that
budgeted and acting upon results to achieve maximum efficiency. Budgetary control is
mainly the use of budget as a control device whereby predetermined plans or standard output,
income and expenditure are compared with actual attainment so that, if necessary, corrective
action may be taken before it is too late.
Budgetary control is the formation of budgets connecting to the tasks of experts to the
requirements of policy, and the nonstop comparison of the actual with the budgeted results,
either to secure by individual action the objective of the policy or to provide a basis for its
revision (Gopal,2009).

2.1.11.Budget Control Benefits

Margah (2005) budgetary controls allow for the planning of expenditure thus allowing for
organizational spending, by doing so the finances are utilized fully which add to the benefits
of the industry and the economy of the country. Budgetary controls also help in determining
the weak points of the organization operations. According to Scarlett (2008) principles,
procedures and methods of achieving given objectives through budgets is known as
budgeting controls which help in fixing the goals of the organization and efforts made for its
achievements. To achieve budgetary targets coordination of various executives and sub-
ordinates is necessary as different departments in an organization are dependent on each other
(Waren, 2011). Sufficient control is very important in every organization; this is because if
there is no control of resources in the organization, it will be difficult to control budgets.
Government owned industries is a basic principle of control on scare resources they are meant
to manage (Robinson, 2009). According to Stewart (1997) for the long-term future plans and
achievements of the organization objectives, effective control is an important administration role
which rewards the collective efforts of all departments.

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 2.1.12.Reason for Variations between Budgeted and Actual Expenditure
The main objective of Budgetary Control is to monitor variance. Variance analysis is unexpected,
unplanned change from the budgeted figures and if no action is taken on time by the management
the organization objective is difficult to achieve. The monthly performance report of the
management highlights the shortfall in expenditure meaning the variance from the planned
activities. Budget therefore must be monitored for variables, so that on time action can be
taken to rectify it as each budget has a budget holder, so the variance can be traced to the right
person (Palmer, 1984).
There are various factors that explain why actual expenditures deviate from the ones
approved during budget planning and preparation at the beginning of the financial year, such as
reallocation of fund during budget implementation, policy changes during the financial year,
inability to implement budgeted policies, program and projects and lack of financial discipline
contribute for variation in budgeted and actual expenditure (Omitoogun and Hutchful,
2006). Lack of day-to-day monitoring and controlling commitment, transparency, accountability
also add to the variance in the budgeted expenditure.

2.1.13.Components of Budgetary Control

There are many components which affect budgetary control. For the purpose of assessment
study of budgetary control systems budget planning process, management support,
organizational commitment, effective internal audit, monitoring and evaluation of the budget
are to be referred (Srinivasan, 2005).
Anwar (2007) recommended three preconditions for preparing proper budget. First, the budget
preparation team has to be consultative and participatory so that there is ownership for the
process and the approved budget. Second, based upon informed choices of operational plans
by the budget users, priorities of programs and expenditures should be set. Lastly, planned
budget (that is outputs, activities, expenditure allocation and budget estimates) must be realistic
and achievable. Management support, in terms of resources, finance, training and new
technologies for budgetary control is essential which will encourage auditors of the
organization (Mihret and Yismaw 2007).

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According to Hancock 2009 the process of monitoring and evaluation of budgetary control
processes and procedures will improve effectiveness and transparency of the organization with
the active involvement of the management team. Basically, monitoring and evaluation
emphasizes on accountability, management assistance and methods of monitoring and
evaluation. The internal audit staff of the organization should be adequately qualified and
experienced to audit the budget utilization by each department and prepare monthly audit
reports which should highlight any variance at the utilization stage.
As per Aldridre and Colbert (1994), information and communication is a process of
identifying, capturing and communicating of relevant information in the required way and
within timeframe in order to fulfill the financial reporting objectives of the organization.
Information and communication are one of the internal control system components, because
they influence the working relationship within the organization at all levels (Yemer, 2016)
The management should adopt flexible and adaptable budgetary planning and control system
which is capable of responding to changing environment and other prevailing issues.
According to Margah (2005) since the budgeting controls are outlined at the start of the
budget but in the world of constant change and uncertainty the main purpose of the budget
may become obsolete thus needing change.

2.1.14.Budget Committee
According to Drury (2012) In the event that spending goes hay way as modifications are
being made in budget or activities, the budgeters need a committee where they can discuss
the expenditure being done out of budget or the planned activity need more funds. To fulfill
the need of budgeters a budget committee is formed consisting of chief executive, budget
officer financial controller and managers from the different budget utilizing departments. Chief
executive being the chairperson helps in making decision of the committee binding to all. The
budget planning manager should be directly reporting to the chief executive and act as a
secretary at the budget committee. The main functions of the budget committee are to approve
the budget requested by the departments, approval for modification in activities, change in
expenditure of a particular activity from as planned, review of monthly department budget
utilization reports, variance in budget utilization and reviewing periodic audited budget reports
(Source: different references on internet regarding budget committee).

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 2.2. Empirical literature review

2.2.1. Empirical literature review in other countries

Several researches, case studies and survey have been done in the area of budgetary control
system with different outcomes, in this section few related researches have been discussed in
relation with budgetary control system in governmental sector.
Lambe et al (2015) did systematic review of budgeting and budgetary control in government
owned organizations with attention focused on the Nigerian national petroleum corporation
(NNPC) researcher, because of the need to have comparative and in-depth assessment of the
issue used survey research design and percentage statistics method to review the budgeting
and budgetary control in government owned organizations. Non-probability type sampling
technique was adopted. Having undertaken systematic review of budgeting and budgetary
controls in government organizations for determining the organization objectives and profit
making, it was concluded that budgeting and budgetary control is an indispensable tool to any
organization. When budget and budgetary controls are carefully planned and implemented by
government owned organizations, they can decrease cost and enhance the efficiency of the
organization performance. From research findings it was revealed that NNPC is a well- planned
organization because it utilizes most relevant management theories but still how efficient or
effective system may be but there is always room for improvement because of ever changing
circumstances in the world for which periodic reviews are necessary. Definitely on bases
of periodic reviews there will be change in strategies for improvement which in return will
require change in planned budget for this reason researchers recommended Zero-based
budgeting framework for government organizations.
Onho et al (2017) pursued a critical appraisal of budgeting and budgetary control in
thepublic sector, a case study of ministry of finance, Makurdi, Benue state, using literature
review as main source of data. Benue state budget for three years was compared to appraise
the budgetary control in the public sector. Hypothesis testing concluded that there is no
significant impact of budgeting on performance in the public sector also budgetary controls
are not effective in this sector. Review of the previous year’s budget performance reveal that
revenue projections, performed very poorly also the project undertaken either did not start
and others were not completed. This is not consistent with the evidence from developed

23
countries that budget is strongly associated with performance. A survey carried out in North
America indicated that budget was rated the highest cost management tool for cost reduction
and control which establish the fact that definitely budgeting is effective for control in
developing country but due to some environmental challenges is not fully justified.
The researchers found that budgeting and budgetary control in public sector failed because of
local and state governments’ dependence upon federal allocation, corruption, inflation and
economic and political factors. The study highlighted that budgeting is done by the public
sector only for getting funds from the government. There is lack of accounting and financial
controls and lot many uncompleted projects which are the after effects of non-compliance of
the budgeting exist. Stringent controls including legal action implementation can help enforce
budget execution in Makurdi for effective use of governmental funds.

Chaudhary (2018) have studied the relationship between budgetary control and financial
performance of Nepal Oil Corporation. The impact of budgetary control on financial
performance was studied using descriptive survey design as a sample of the study was used to
gather data through questionnaires distributed to respondents from account, finance,
administration, engineering and project department. The researchers concluded the research
with the findings that not only budgetary control lead to improved profitability but there are
other factors which also effected the profitabilit y of the organization such as price, marketing
and employee’s efficiency. For all these factors to improve profitability management
commitment is essential. Financial objectives, allocation of funds as well as investment
opportunities improved with the implementation of budgetary control process at Nepal Oil
Corporation.

Nair (2017) studied the budget and budgetary control systems on selected Indian companies.
According to the researcher for attaining the financial and other goals of the organization,
budgetary control systems are essential. The budget control traces the variation between the
actual and budgeted financial plans and identifies the causes so that corrective measures can
be taken to avoid such situations of variance in future. The study data analysis revealed that
most of the Indian companies implemented budgetary control systems but still it needed
improvement. The study indicated that Indian companies imply BCS for different purposes
such as some for-cost reduction, maximizing profitability and to minimize the variances in
24
planned and actual budgets. According to researcher, respondents agreed that there are some
hurdles in fully implementing BCS and the prominent factor is the full commitment of the
senior management. The researcher recommended in his conclusion that in order to improve
organization efficiency, senior management should implement measures to solve the
problems associated with BCS implementation procedures. Researcher recommended that
more research is required on BCS since it has direct impact on organization efficiency and
profitability. Venkatasami (2015) conducted a study on budgetary control with special reference
to Coimbatore District Co-operative Milk Producers Union Limited. Researcher adopted
analytical research design in which what, when, why and how topics were used for analysis.
The purpose of this study was to analyze how budgetary control helps the milk union to
select best course of action to improve revenue, to provide detailed plan of action for the business
over a period of time and also to revise the budget in reference to the changing
circumstances. The main objective of the study was to find suggestions to reduce production
cost and improve the financial position based on the BCS department efficiency. The final
conclusion based on the data analysis by the researcher was that the BCS department works
as a backbone of the top management and is the essential support for every management in
their business operations. With the support of good budgetary control, the management of
markets, finance, production and personnel become easier and more efficient. Thereby,
concluding that it is important for every organization to effectively implement budgetary
control systems in its operations.

Fadi (2013) in his investigation of the effect of tight budgetary control on management
behavior at Swedish public sector using questionnaire with special attention on satisfaction,
motivation, commitment and stress, found that generally managers working in public sector
face TBC. The hypothesis concluded that there is negative relationship between TBC and
motivation which didn’t result in significant relationship hence the null hypothesis couldn’t
be rejected. Third hypothesis which investigated a negative relationship between TBC and
organizational commitment found significant relationship between the variables which
concluded that the above conclusion of TBC and motivation is true. The study results found a
positive relationship between managerial stress and TBC, which concluded the fourth
hypothesis which considered relationship between TBC and satisfaction was not supported

25
meaning the managers facing TBC are not less satisfied than the managers not facing it.
Manoharan et al (2017) in his research of Budgeting and budgetary control system and
organizational performance in the case of selected Indian companies examined relationship
between budgetary control and effectiveness of the organization, using statistical method,. In
spite of there being a strong relationship between budgetary control system and
organizational operation efficiency, the researcher concluded that there is still gap in proper
implementation of budgetary control system in the organization.
Badu (2011) studied the budgeting and budgetary control at Ernest Chemist Laurea with an
aim of doing research on budgeting practice in this pharmaceutical company based in Ghana
and assessing the capability of the budgeting experts and their view about the current position
of the company. The researcher did this study keeping in mind that it may help in solving any
issues regarding the budgeting and budgetary control systems in the organization. The
conclusion of the assessment study was based upon the questionnaire used for collecting data
regarding budgeting and budgetary controls in the organization from the staff. The data collected
highlighted that the right budgeting and budgetary control systems were incorporated
but some ethical issues were indicated in reply to the questionnaire.

Mohamed et al. (2015) the research topic was to study the performance impact on budget
control at Dar-Salam bank in Somaliland. The main emphasis was on the performance of the
bank and accounting systems based on the cost and zero-based budgeting being implied in
the bank operations. Data was collected from 70members of the bank staff using
questionnaire and it was analyzed using SPSS for obtaining analyzed results in the form of
charts and tables to interpret the outcome of analysis. This research used both descriptive and
retrospective research designs. The recommendation based on the research data analyzed was
that to improve business decisions, efficiency and productivity, relevant training was required
for the accounting staff in their professional field for improving the overall performance of
the organization.

Gershon (2012) research objective was to study budgeting, budgetary control and
performance evaluation, a case study of Alterrian Service Group. Data for the study was
collected through personal interviews, questionnaire and secondary data source to achieve the
study objective that budget has significant role in operations of the group and that the budget

26
users utilize it in daily operation to achieve the planned objectives of the group. Qualitative
and quantitative methods were implied to analyze the data. This research was mainly descriptive
and explanatory in nature. The findings of the analysis revealed that the budget users couldn’t
justify the planned budget because of not having proper knowledge of budget utilization and
the position they occupied in the organization. The managers from different fields were
empowered with the budgeting and budgetary control department where they were not able
to justify their position as department heads. The recommendation of the researcher was
that all business managers should have adequate knowledge and experience of budgeting and
budgeting controls so that they could impart through knowledge to the project managers about
the budget utilization.
Chemweno (2009) studied the firm employment of an operational budget as a management
tool. The study mainly focused on companies offering mortgage financing in Kenya, to find
how operational budgeting is done, the basis of budget formation and to what limit the
budgets are the basis of management and control tools. The data was collected using detailed
questionnaire and analyzed using descriptive statistics, tables and percentages. The findings
of the study were that in all mortgage financing institutions, budget was prepared on annual
basis and operational budget was the main operational guideline for the institutions based
upon objectives, targets, responsibilities and means and cost of target achievements.

2.2.2. Empirical literature review in Ethiopia

Geletaw and Mesfin (2018) performed study on determinants of budget control in Ethiopian
public organization (The Case of Benishangul Gumuz Regional State) employing
methodology of descriptive research because the information, which concerns the present
status of budget control in public organization was required. This pattern of research was
chosen because the researcher would not control the variable but the phenomenon that existed
had to be described. Thus, the descriptive research helped the researcher to identify the
determinants that contribute to budgetary controls. The study has highlighted that budget
control of public organization increase with effective flow of information and
communication, cost reduction, competent internal audit, management support, budget
monitoring and evaluation. Researchers concluded that since organizational commitment were

27
not statistically enough to contribute for the budget control, it requires further research for
obtaining the impact of these variables on the budget control.
Garedaw (2018) pursued the study on challenges and prospects of budget preparation and
utilization in selected finance bureau of Kaffa zone. Qualitative and quantitative approach
was employed by the researcher to collect data for study and data collected was analyzed
using descriptive and empirical model. The analysis predicted that budget preparation was as
required but utilization was not satisfactory. Researcher compared recurrent budget to capital
budget and the study concluded that recurrent budget utilization was adequate but the capital
budget utilization was not to the mark. The analysis outlined that budget utilization was mainly
dependent upon contractor capacity of executing work, auditing system and diverting funds
from planned to un-planned activities which created gap in utilization of capital budget. For
short comings in utilization of capital budget highlighted by analysis of data, researcher
recommended that more focus should be on capital budget utilization as compared to recurrent
budget to avoid delays of capital projects and their quality by rigid rules and involvement
of the society. The research was concluded on a note that focusing on planed program, adequate
auditing system, re-structuring planning, and construction and design departments is important
to overcome challenges in budget utilization as a solution in Kaffa zone.

Kassahun (2019) research on effect of budget and budgetary control on non-financial

performance of Ethiopian banking industry to fulfill the bank objectives and maintain
accountability of bank operating costs is referred. From this study researcher concluded that
budgetary control systems played major role in saving the operational costs thus improving
the non-financial performance of the bank but it was also observed by the researcher that the
controls had no significant effect on the motivation of bank employees. Managerial
commitment to budgetary control and complete acceptance had positive effect on the
performance of the banks was observed. It was also analyzed that use of budgets to pressurize
employees could lead to negative non-financial performance of bank and vice versa that
meaningful involvement of employees could increase productivity which is one of the factors
of non-financial performance. Analysis of data also highlighted that budgetary control of
banks was a failure of budget controls as they did not focus on long term goals of the bank.
Teamwork between management and finance function affected the bank non-financial

28
performance o f the bank. Finally, it was concluded by the researcher that budget and
budgetary control had an effect on non-financial performance of the banks.

2.3 Summary of Literature Review

In the theoretical and empirical literature review above, researches by different researchers
have been discussed to identify budgetary control systems in public sector of Ethiopia and
overseas. In reference to all above researches mentioned it was observed that budgets are
considered as vital control process for implementation of the operational plans of the
organization. Researches have indicated that there is no single approach to the budgetary
control system, but it varies according to the operations of the governmental and non-
governmental organizations. The main characteristic of budgetary control system is the
control of variance, which is influenced by budget preparation and budget implementation.
The theoretical and research work indicate that budgetary control should not only be
following the planned budget and keeping it on track as planned but at the same time
financial accountability of the departments should also be controlled. Theoretical and
empirical literature referred, does not give guideline on how to curb using BCS, the
over/underutilization of budget.
In reference to study and researches done in Ethiopia in the area of budget and budgetary
control system in public sector, Geletaw and Mesfin 2018 concluded that budgetary control
of public organization increases with effective flow of information and communication which
improve cost reduction, internal audit, management support, budget monitoring and
evaluation. Similarly, Garedaw (2018) mention that auditing system and diverting funds from
planned to un-planned activity will create gap in utilization of budget. Kassahun (2019)
indicated that teamwork is important between management and financial functions to achieve
organization objectives.

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CHAPTE THREE
3. METHODOLOGY
3.1. Research Design
Since, the research design is the master plan/blueprint specifying the methods, procedures for
collecting & analyzing the needed information or the detailed outline of how an investigation
will take place, in this research design section the researcher answered: How data will be
collected, what instruments employed, how the instruments used and the intended means for
analyzing data collect.
Therefore, in this study the researcher used Descriptive research design since it can be done
quickly and easily to answer the problem statement and pertaining research objectives. The
reason behind in using this research design is because it used for description of the state of affairs
as it exists at present. And in answering the research objectives, the researcher proposed an
integrated conceptual framework for the role of accounting information system on organizational
performance in Somali region BoFED.

3.2. Research Approach

Kothari (2004) stated that research brings to light the fact that there are two basic approaches
and these are quantitative and qualitative approach. A quantitative approach helps the research
to generate data in quantitative analysis in formal rigid fashion. In other way, a qualitative
approach helps the research for subjective assessments of attitude, option and behavior research.
The study also uses both qualitative and quantitative data. Qualitative data will applicable since
meanings are based on expressions through words and analysis are conduct through the use of
content analysis. Quantitative data will applicable since meanings are derived from numbers and
analysis will conducted through the use of diagrams and statistics.
The Data obtained in the study will mainly base on primary research data. This is a result of no
prior research conducted on the role of accounting information system on organizational
performance in Somali region BoFED in order to solve the research problem at hand, the
researcher will rely on primary data sources mainly the use of questionnaires and interview.
However, supporting arguments or patterns found in annual reports and brochures were involved
to use secondary data where necessary.

30
 3.3. Source of data
To collect the necessary data the study team used both primary and secondary source of data.
Primary data: - Would gather from employees of the organization by distributing questionnaire
and interview through related parties
Questionnaire: - contain both open-end and close-end questions
Interview: - by directly communicate with the finance manager
Secondary source of data: which are collected or obtained from review of selected materials which
are related to the assessment of budgetary practice and evaluation, like reference book, magazines,
used internet and the organization budget report document.

3.4. Sampling techniques

The sample selection carried out by research, so that it is reliable as to the representation of the
total population, who are believed high civil servants to the finance organization.
The research, therefore, focus on the employee of the organization by using simple random
sampling techniques to acquire the necessary information and to make clear investigation for the
current research. The total population of the study are would include 28 employees. Out of the
total, the researcher would study only forteen (14) or fifty (50%) randomly selected employees
taking this in to account on factors it is found necessary to use personal judgment.

3.5. Method of Data analysis

In this study the data has been analyzed and interpreted using different methods, the method
includes tabulation and percentage. Tabulation used to arrange data in a table or other summary
format to facilitate the process of comparison of various data analysis.

31
 4. Budget
S/n Description Unit Qty U/price Total
1. Note book PC 10 40 400
2. Writing Page 25 5 125
3. Internet Hrs 20 15 300
4. Coffee Pcs 3 20 60
5. Transportation Bajaj and Force 5 100 500
6. Cello Pen Pc 10 15 15
7. Dot pencil Pc 10 10 100
8. Mobile card Pc 5 25 125
9. Printing paper Page 25 5 125
10. Binding Book 1 40 40
Total 1,790

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 5. Work Plan
No Activity Week 1 week 2 Week 3
1 Development of Proposal
2 Development of Questioner
3 Sample Size Selection
4 Data analysis
5 Collection of secondary data
6 Submission of proposal

33
 6. REFERENCE
1. Cherrington “Cost Accounting managerial Approach 2nd edition
2. Hrinshikesh Chakraborty and Srijit Chakraborty 1997 Management Accounting
3. M.N. Arora Cost Accounting Principle and Practice 8th edition New Delhiviskas (2003)
4. Needles, Anderson and Caldweel 1994 Financial and Managerial Accounting third edition
5. Ronald W.Hilton, Michael W.Maher and Frank H.Selto 2000” Cost management stratagies for
Business Decisions
6. Schaum’s Theory and Problem of financial management second edition

34