BUDGETING AND BUDGETARY CONTROL IN NON …

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BUDGETING AND BUDGETARY CONTROL IN NON GOVERNMENTAL

ORGANISATIONS: A CASE OF INFECTIOUS DISEASES RESEARCH

COLLABORATION (IDRC)

BY

AYOREKIRE MACLEAN

2016/HD 06/1237U

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS OF

BUSINESS ADMINISTRATION OF MAKERERE UNIVERSITY

NOVEMBER, 2018

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DEDICATION

I dedicate this work to my family especially my husband Mr. Namanya John, Children Jaren and

Jerry for the support during the time I was persuing my Masters Degree in Business

Administration. I also dedicate this book to my parents Mr. & Mrs Mutakirwa John plus my

brothers Edmond, Edwin, Edgar, Edward and my Sister Lydia.

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ACKNOWLEDGEMENT

First and foremost, I thank the almighty God for bringing me this far. Without His mercy and

love for me, I would not be writing this page. I would like to acknowledge the endless support,

commitment of my supervisor Dr. Mukisa Ibrahim. May Allah watch over you always.

Special thanks to Dr. Turyakira Peter and Dr. Sarah Bimbona who nurtured me into

understanding research as a subject plus all my lecturers who have supported me in all course

units. Friends especially Patricia, Zewlence and Bayusuf, thanks for everything.

I feel overwhelmed with indebtedness to my husband, children and my in law Elly for their

enormous support and tolerance throughout the entire period of the course. I am really grateful

for the love and support you provided to me.

Last but not least, I would like to appreciate in a special way my employer IDRC for allowing me to

use the Organisation as my case.

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TABLE OF CONTENTS

DECLARATION.............................................................................. Error! Bookmark not defined.

APPROVAL ..................................................................................... Error! Bookmark not defined.

DEDICATION.............................................................................................................................. iii

ACKNOWLEDGEMENT ........................................................................................................... iv

LIST OF TABLES ..................................................................................................................... viii

ABSTRACT .................................................................................................................................. ix

CHAPTER ONE ........................................................................................................................... 1

INTRODUCTION......................................................................................................................... 1

1.1 Introduction ............................................................................................................................... 1

1.2 Background to the Study ........................................................................................................... 1

1.3 Statement of the Problem .......................................................................................................... 3

1.4 Purpose of the study .................................................................................................................. 4

1.5 Objectives of the study: ............................................................................................................ 4

1.6 Research questions: ................................................................................................................... 4

1.7 Scope of the Study .................................................................................................................... 4

1.7.1. Subject Scope: ....................................................................................................................... 4

1.7.2 Geographical Scope: .............................................................................................................. 4

1.7.3 Time Scope ............................................................................................................................ 5

1.8 Significance of the study:.......................................................................................................... 5

CHAPTER TWO .......................................................................................................................... 6

LITERATURE REVIEW ............................................................................................................ 6

2.0 Introduction ............................................................................................................................... 6

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2.1 To understand the Budget preparation process. ........................................................................ 6

2.2 Benefits of Budgets and Budgetary control. ............................................................................. 8

2.3 Challenges associated with Budgeting and Budgeting Control. ............................................. 11

CHAPTER THREE .................................................................................................................... 15

RESEARCH METHODOLOGY .............................................................................................. 15

3.0 Introduction ............................................................................................................................. 15

3.1 Research design ...................................................................................................................... 15

3.2 Study population ..................................................................................................................... 15

3.3 Sampling procedure and sample size determination ............................................................... 15

3.4 Data source.............................................................................................................................. 16

3.5 Data collection instrument ...................................................................................................... 16

3.6 Measurement of variables ....................................................................................................... 16

3.7 Data validity and reliability of instruments ............................................................................ 16

3.8 Data entry and processing analysis ......................................................................................... 17

3.9 Ethical considerations ............................................................................................................. 17

CHAPTER FOUR ....................................................................................................................... 18

PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS .................. 18

4.1 Introduction. ............................................................................................................................ 18

4.2 Response rate .......................................................................................................................... 18

4.3 Background information of the respondents ........................................................................... 18

4.3.1 Gender of the respondents ................................................................................................... 19

4.3.2 Age group of the respondents .............................................................................................. 19

4.3.4 Position at IDRC .................................................................................................................. 21

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4.3.5 Years worked at IDRC ......................................................................................................... 21

4.3.6 Departments at IDRC ........................................................................................................... 22

4.4 Non- demographic information ............................................................................................... 23

4.4.1 Budgeting process at IDRC ................................................................................................. 23

4.4.2 Benefits of Budgeting and budgetary control at IDRC ........................................................ 26

4.4.3 Challenges associated with budgeting and budgetary control at IDRC ............................... 29

4.5 Conclusion .............................................................................................................................. 32

CHAPTER FIVE ........................................................................................................................ 33

5.0 SUMMARY, CONCLUSIONS AND POLICY RECOMMENDATIONS ...................... 33

5.1 Introduction ............................................................................................................................. 33

5.2 Summary of research findings ................................................................................................ 33

5.2.1 Bio-data of respondents ....................................................................................................... 33

5.2.2 Attributes of budgeting process in NGOS. .......................................................................... 33

5.2.3 Benefits of budgets and budgetary controls. ........................................................................ 34

5.2.4 Challenges associated with budgeting and budgetary controls............................................ 34

5.3 Conclusions ............................................................................................................................. 34

5.4 Policy recommendation .......................................................................................................... 35

5.5 Limitations to the study .......................................................................................................... 36

5.6 Suggestion for further research ............................................................................................... 36

REFERENCES ............................................................................................................................ 37

Appendix: 1: Questionnaire ....................................................................................................... 42

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LIST OF TABLES

Table 4.1: Gender.......................................................................................................................... 19

Table 4.2: Age group .................................................................................................................... 19

Table 4.3: Level of education and profession qualification .......................................................... 20

Table 4.4: Position at IDRC .......................................................................................................... 21

Table 4.5: Years worked at IDRC................................................................................................. 21

Table 4.6: Departments attached by respondents at IDRC ........................................................... 22

Table 4.7: Descriptive Statistics on the budgeting process at IDRC. .......................................... 23

Table 4.8: Descriptive Statistics on the benefits of budgeting and budgetary control at IDRC. . 26

Table 4.9: Descriptive Statistics on the budgeting and budgetary control- challenges at IDRC. . 29

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ABSTRACT

The study sought to establish the budgeting process, challenge and benefits of budgetary and

budgetary controls at Infectious Diseases Research Collaboration (IDRC). The study based on

the foundation that budgetary and budgetary control play significant role in the resource

management of an organisation to achieve the set target. However, this requires empirical

assessment to the budgeting process in the organisation efficiency. The study was guided by the

objectives, which include budget preparation process in NGOS, determining the benefits of

budgets and budgetary controls and establishing the challenges associated with budgeting and

budgetary controls. The study used a cross sectional survey research design with a quantitative

approach. Primary data was collected using close ended questionnaire and data was analyzed

using SPSS version 23.

Results on attributes of budgeting process indicate that IDRC has budgetary system and

department responsible for budget preparation, regular budget review and approval; projects

demand based budget preparation, availability of budget committee and approval of the budget

by the donors. The dominant benefits of budgeting and budgetary controls were integration of

budget planning and implementations with control and monitoring, effective control of

procurement cost, budget variance analysis, linking the project activities to the set objectives to

improve organisation efficiency. However, unexpected changes in project demands, time

consuming process and unfavorable Donor influence were the challenges of budgeting and

budgetary control.

The study recommends that managers in the organisation should strengthen the budgeting

process and budgetary controls through engaging concerned stakeholders in advance to improve

the implementation process to achieve set targets and support the organisation efficiency.

Furthermore, managers should review the budgets at each stage of project completion to avoid

cost overrun and improve on performance.

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CHAPTER ONE

INTRODUCTION

1.1 Introduction

This research handles issues concerning budgeting and budgetary control of NGOs in Uganda.

This chapter presents information on background of the study, statement of the problem, purpose

of the study, research questions, scope of the study, and significances of the study.

1.2 Background to the Study

In the world today, Budgeting has been widely used as a tool for budgetary control by many

entities to achieve financial performance. Lucey, (2009) agrees that although many of the

principles of budgeting apply equally to nonprofit organisation and profit seeking organisation a

key difference is that the latter organization’s budgets focus on the relationship between

expenditure (input) and sales revenue (output). In nonprofit organization outputs are much more

difficult to measure hence traditional budgeting has been concerned with making sure that for

each expenditure, heading actual spending does not exceed the budget authorized cash.

More so, Morgan, (1997) rants that the budget has grown beyond a financial tool. It is above all

managerial tools in essence; it is the best tool for making sure that key resources, especially

performance resource are assigned to priorities and to results. This entails a repetitive circle of

planning and control which is normally followed by appropriate information about actual result

to the management for comparing them against a budget and initiating a control action if

necessary (Defranco, 1997).

According to Bradstreet reports (2004) on budget and budgetary control, and business failure

aptly summarizes that failure of many businesses these days emerge from the fact that budgeting

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and budgetary control that is the bedrock of any vibrant and successful business or organization

is weak or absent. Various research studies by Covaleski, John, Evans, Joan & Michael (2003)

have highlighted that organisations need to pay serious attention to budgeting and budgetary

control as key elements of management control and a crucial tool in facilitating the achievement

of organization goals and as a basis for performance review. In Uganda, the practice of budget is

both traditional and formal, the Government and other sectors prepare and declare budgets every

year. Government’s financial policies and implementation are clearly lied out in local

government act 2013 as shaped and designed in line with budgetary allocations.

For the case of Nongovernmental organisations (NGOs) in general, they prepare and implement

budgets of different activities of its operation for example at IDRC, Laboratory Supplies and

Patients costs take a bigger percentage of budgets and others follow such as office Supplies,

Utilities, Communication and through Budgetary control on a regular basis, the variances could

be located and corrective action taken in a timely manner.

This signifies that Budgeting can be used as a benchmark by management as a control tool that

allows managers to compare actual performance with estimated or desired performance. Hence,

the budget is widely used as a managerial control technique in an organization (Horngren,

Sundem and Stratton, 2001). Organisations develop plans on how to go about its future

operations and as a way of assessing the performance of their organizations, through making

comparisons of actual results against budgeted results. A failure to achieve budget targets, the

organization may be regarded as inefficient. A case of Infectious diseases research collaboration,

most of the projects budget lines were getting exhausted before the budget end periods and some

of its six projects with annual budgets amounting to USD 688,750 spent USD 864,544 creating a

negative variance of USD 175,794 which is about 25.5% and this may have been partially

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contributed to budgetary control issues (IDRC Financial report, 2017; IDRC Financial report

2018).

Therefore, budgetary control keeps the plans of an organisation running smoothly and up to date

by use of comparisons between the budgeted and actual and taking note of the variances. And it

is against this background that the study seeks to understand more about budgeting and

budgetary control in NGOs to be able to reduce budget deficits in their operations.

1.3 Statement of the Problem

IDRC, as any organisation undergoes through the Budgeting process at the beginning of every

project, where by the budget Committee members draft the budgets according to the activities of

the project and these budgets are usually on annual basis unless the funder has a different set up

(Carter, McDonald and Cheng, 1997).

The Grants department takes lead in Budgeting and budgetary control by tracking the budgets for

all the organisational projects which are approximately 30 projects that are not easy to monitor

closely and in some instances, project budgets are overrun. According to the IDRC Financial

reports, (2016/2017; 2017/2018), some project budget lines were getting exhausted before the

end of budget period there by creating negative variances. This could be due to over spending on

some activities or spending on unbudgeted for activities causing budget deficits hence affecting

the cash flows.

The above if not checked would affect the performance of the organisation in the long run and

therefore the motivation to understand more about budgeting and budgetary control since the

organisation relies more on budgets in performing all its activities.

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1.4 Purpose of the study

This study sought to examine budgeting and budgetary controls in Non-Governmental

Organisations; a case of Infectious Disease Research Collaboration (IDRC).

1.5 Objectives of the study:

The study was guided by the following objectives

i. To establish the budget preparation process in NGOS.

ii. To determine the benefits of budgets and budgetary controls.

iii. To establish the challenges associated with budgeting and budgetary controls.

1.6 Research questions:

The study was guided by the research questions:

i. What is the budgeting process in NGOS?

ii. Which are the benefits of budgets and budgetary controls?

iii. What are the challenges associated with budgeting and budgetary controls?

1.7 Scope of the Study

1.7.1. Subject Scope:

The Study focused on budgeting and budgetary control in terms of perceived grant income and

expenditure at IDRC.

1.7.2 Geographical Scope:

The Study was conducted at IDRC headquarters Nakasero Hill Road Kampala and its sites of

operation, Mbale, Tororo and Mbarara.

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1.7.3 Time Scope

The study focused on period from 2016-2018 as the period ensured that the current information

about budgeting and budgetary control was obtained.

1.8 Significance of the study:

i. The study evokes IDRC to put more emphasis and improve on budget and budgetary

control.

ii. The study provides the management of IDRC with an insight to come up with operational

control and policy compliance and other NGOs in Uganda.

iii. The study enhanced the researcher’s knowledge in conducting research as well as added

to the existing body of knowledge about Budgets and Budgetary control.

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CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter gives an opportunity to understand the different opinions by various authors on

Budgeting and Budgetary control. Literature reviewed in this section has been obtained from

secondary sources and reviewed in relation to the objectives of the study.

2.1 To understand the Budget preparation process.

Budgets are central to the process of planning and control which are major activities of

management in all organisations (Okpanachi and Muhammed, 2013). Budget shows a

quantitative expression of a proposed plan of action by management for a specified period and an

aid to coordinating what needs to be done to implement the plan (Horngren, Stratton, Sutton, and

Teall, 2004). Budgeting in non-governmental organizations is used as a planning tool.

Organizations use a budget as a guiding tool of its activities. According to Goldstein (2005)

conjure that following budgetary system in an institutions aid in setting priorities by allocating

scarce resources to those activities that are most important to the organization. Initialization of

preparation of budget starts with selection of a budget committee which will have the ultimate

responsibility of preparing the budget and other related works. The next step will be to prepare a

budget manual or budget guidelines in case a budget manual is not in use. Before starting draft of

the budget, another significant factor is to be considered seriously, that is determining the

limiting factor or key factor. Maitland, (2001) mentions that the process of preparing and

agreeing on a budget is a means of translating the overall objectives of the organization into

detailed, feasible plan of action.

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The process of budgeting generally involves an iterative cycle which moves between target of

desirable performance and estimates of feasible performance until there is, hopefully

convergence to a plan which is both feasible and acceptable (Emmanuel, Otley and

Merchant,1990). Lau (2013) posit that organisation should have budget committee to provide

general guideline for preparing budgets for effective budgetary process.

Also, if it is looked beyond many details and iterations of the usual budgeting process, for

effective budget preparation and implementation, the following have been suggested by (Finney,

1994); Budget forms and instructions are distributed to all managers, the budget forms are filled

out and submitted, the individual budgets are transformed into appropriate budgeting or

accounting terms and consolidated into one overall organizational budget, the budget is

reviewed, modified as necessary and approved. The final budget is then used throughout the year

to control and measure the organization. Budgeting process pushes managers to take time to

create strategies, targets and goals before activity begins. Budget preparation helps management

focus on the next month or the entire coming year. The budgeting process forces managers to

approve the budget before implementation and regularly review the current operating conditions

and aids in forecasting and implementing needed changes (Anderson, 1996).

Welch, Hilton, Gordon, (1998) have defined the budgeting process as profit planning and control

process and in that way not only have identified the two most important functions of budgets in

organizations, but have also presented budgeting process in a wider context than it is usually

depicted. The budgeting process is more than just a process of combining quantitative financial

plans. It is a tool with which top management cascades strategy goals to operating levels.

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Budgets are ideal for this purpose since they are in essence the detailed quantification of targets

for short term choices of actions. Rhelter (2011) who contend that organisation should introduce

suitable administration procedures to ensure effective preparation of budgets according to each

project demands to influence formation of appropriate budget and budgetary control process. In

practice, the procedures should be tailor-made to the requirements of the organisation, but as a

general rule a firm should ensure that procedures are established for approving the budgets and

that the appropriate staff support is available for assisting managers in preparing and monitoring

their budgets and performance to achieve targets.

Budget preparation is also an excellent vehicle with which to work with all supervised personnel

by requesting their managers and their staffs. At the end of a period the budget helps managers

evaluate performance, locate problematic areas, bottlenecks and provide solutions to these

problems (David, 1988). Venol (2012) assert that successful budgetary process pre-supposes

clear allocation of authority, duties and responsibilities in an organisation through the

establishment of a department to oversee and monitor the entire budgetary process. The

department should communicate the budget policy and expectations to respective units for

consideration in their activity formulation as the foundation of budgeting.

2.2 Benefits of Budgets and Budgetary control.

Budgetary control is a tool implored by management to keep track of actual performance to

ensure budgeted standards are met (Kpedor, 2012). It entails a repetitive circle of planning and

control which is usually followed by appropriate information about actual result to the

management for comparing them against the budgeted and initiating a control action if necessary

(Defranco,1997).

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According to Scarlett (2008), budgetary control provides for the cost effective procurement

principles, procedures and practices of achieving given objectives through budgets. The

budgetary control system helps in fixing the goals for the organisation as a whole and concerted

efforts made for its achievements. Preetabh, (2010) highlighted the benefits of budgetary control

as profit maximization; a budgetary control aims at maximization of profits or an organization

through proper planning and co-ordination of different functions, proper control over various

capital and revenue expenditures and putting resources into best use. Coordination achieved

through working of different departments and sectors. Waren, (2011) noted that budgetary

controls provide for variance within the organisation performance at different departments

bearing on one another; this therefore makes coordination of various executive and subordinates

necessary in achieving of budgetary targets.

The budget brings about improvement and efficiency in the working conditions of the

organisation by setting out targets of the organizations and providing resources to all

departments to work towards achieving these targets. Thus, everybody knows what they are

working for due to the link and given the necessary resources, they will ensure efficiency

(Kaplan and Norton, 1992). The budget serves as a means of motivating managers to attain

stated goals of the organisation. It helps in communicating organizational plans to the various

units or departments in the organisation by creating divisional, departmental, and sectional

budgets and correctly defined responsibilities.

Blocker and Weltmer (1980) who conjure that budget serves as a yardstick or benchmark for

controlling on-going operations and assists in building team spirit and also links the project

activities to the objectives where participation in budgeting is encouraged. This helps in reducing

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wastes and losses by revealing them in time for corrective action. Budget acts as benchmark for

evaluating the performance of managers and serves as a means of educating them.

Blocher and Chen (2002), also argue that budgets help to allocate resources, coordinate

operations and provide a means for performance measurement. Hilton (2000), note that the

budget is the most widely used technique to integrate budget planning and implementations for

planning and control purposes needed to achieve set target. Margah, (2005) assert that budgetary

controls are important tools for a country’s economy this is because it allows planning for

expenditure thus facilitating systematic spending. Finances are put into Optimum use, extending

the benefits to industry and national economy thus minimizing wastage of resources.

A further review of literature on budgeting reveals that budgets serve dual purposes of planning

and control (Douglas, 1994). Budgets are used to communicate top management’s expectations

to managers and employees. The budgets process provides for coordinated planning among

different functional areas (Abernethy and Stoelwinder, 1995). Merika, (2008), the deviations in

budgeted and actual performance will enable the determination of weak spots. This enables an

organisation to concentrate on those aspects where performance is less than stipulated. The

management moreover takes corrective action measures whenever there is a discrepancy in

performance.

According to Okapnachi and Muhammed (2013), absence of effective budgetary control breeds

disregard for laid down procedures, loss of focus and shoddy coordination of activities and these

are capable of crippling an organization.

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2.3 Challenges associated with Budgeting and Budgeting Control.

Existing literature has evidently revealed that budget controls have myriad of challenges that can

at times be a hindrance towards achieving the overall effects of budgetary control. According to

Margah (2005) many of the increasing problems experienced by organisations attempting to

manage their budgetary control procedures have been laid at the door of the budget , presenting a

fixed (Preset and unchanging target ). In a world of constant change and uncertainty, Margah,

(2005) notes that a budget can become outdated during the budget year or even before it begins

thus rendering little or no value to its intended purpose. Present day economic environment

demands that organization adapt new practices. Given the new competitive realities, there is need

for management to embrace flexible and adaptable budgetary planning and control system which

has the ability to quickly respond to environmental changes and complexities.

Carter, (1997) identifies a number of problems that could arise from budgeting. The budget could

be seen as pressure devices imposed by management, thus resulting in bad labour relations and

inaccurate record-keeping, it could also lead to departmental conflicts arising from disputes over

resource allocation and departments blaming each other when targets are not met, it is also

difficult to reconcile personal and corporate goals, and Waste may also arise as managers adopt

the view, “we had better spent or we will lose it”. Furthermore, Fred (2011) asserted that

budgetary control is centered more on cost reduction not value addition in the task

accomplishment which adversely affect the project outcome. This is often coupled with “empire

building” in order to enhance the prestige of a department. There is also the issue of

responsibility versus controlling, i.e. some costs are under the influence of more than one person,

e.g. power costs. Managers may overestimate costs so that they will not be blamed in the future

should they overspend.

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Prendergast, (2000) identifies three main problems associated with budgeting. First, a lot of time

is involved in the budgeting process. Second, budgets are increasingly inaccurate as a result of

shorter product lifecycles and rapidly changing business environment. Finally, there is also the

extent of budget gamesmanship. He argues that over the years, budgets have resulted in a

conflict between top management and their subordinates. While top management attempts to get

the most out of their staff, subordinates on the other hand, work to build slack in their budgets in

an effort to make budget numbers easier to attain. This could lead to budgetary slack.

Neely (2001) who asserted that variation in the demand for project activities is challenge towards

budgetary controls which pose weaknesses in budgetary controls included; restraining of

responsiveness and acting as barriers to change, budgets are rarely strategically focused and

often contradictory, they add little value especially given the time required to prepare them, they

concentrate on cost reduction and not value addition, they strengthen vertical command and

control, they do not reflect emerging network structure that organisations are adopting, they

encourage gaming and perverse behaviors, they reinforce departmental barriers rather than

encourage knowledge sharing , and make people feel undervalued. McNally (2002) is also very

critical of the traditional budget. He argues that “the days of traditional budgeting and planning

are numbered”. Some of the criticisms are that Budgeting processes consume too much time and

incur very high costs.

Consequently, when the budget is authorized, it may no longer be accurate and this causes

problems for governmental organizations in today’s unpredictable and fast-paced business

climate. A study on challenges facing budgetary control systems in developed countries by

OECD, (2007) showed that budgets fail due to reasons such as budgets used as pressure tool,

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central decision making process, lack of job security and managers’ lack of training. Thomas,

(1998) notes that the success of budgetary control systems depend, to a large extent, on the

accuracy with which estimates are made: budget plans are based on estimates. Despite the fact

that numerous statistical and other techniques may give satisfactory results, forecasting cannot be

an exact science. It must also be adapted continuously to fit changing circumstances requiring

that old methods must be discarded and replaced with new ones. It therefore takes a long period

to adapt to a particular system of budgetary control. Another major criticism of budgets is the

over-emphasis on short-term profits at the expense of continuous long-term improvements such

as new product development and customer satisfaction (Hayes and Abernathy, 1980).

Furthermore, one of the biggest problems with budgeting and budgetary control is that, it tends

to promote an inward-looking, short-term culture that focuses on achieving a budget figure,

rather than an implementing business strategy and creating shareholder value over the medium to

long term. For all these reasons, it is believed that these weaknesses lead collectively towards

business underperformance and should therefore be dealt with.

In spite of the numerous beneficial functions budgets play in the management of organizations

budgeting and budgetary control practices could prove to be stumbling block in many

organisations and hinder them from reaching goals or attaining what they budgeted. Budgeting

is, therefore, not a follow proof tool. The above challenges facing the budgeting and budgetary

control system have been present since the first day of their implementation in most

organisations. It was the job of managerial accountants in those and all other organizations to

devise systems that would maximize utilization of budget and budgetary control benefits and

minimize their negative influences. A subsequent review of budgeting theory shows that

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academicians have been identifying budgeting and budgetary control problems and suggesting

solutions and the new budgeting techniques being developed.

Conclusion.

Budgeting and budgetary controls are core drivers of organisation performance in a non-

governmental organisations as suggested by many scholars like (Okapnachi and Muhammed,

2013; Margah, 2005 and Kpedor, 2012) have tried to exhaust the field of budgeting and

budgetary controls but mostly focusing on profit making entities and few scholars have taken a

deep step into the operations of the Nonprofit making organisations where NGO’s belong in

terms of budgeting and budgetary controls and those that have tried have been more of

consultancy type and explorative in nature hence the motivation of this study. Charles (2014)

opine that budget process is costly to many organisations although its relevance towards cost

management exceeds the costs incurred. However, majority of them use qualitative research

design and their studies concentrated on impact of budgetary controls on organisation

performance with little emphasize on budgeting. This therefore necessitated a study to stream

line the implementation of budget and budgetary control using quantitative approach since there

is no study so far carried out in the case study organisation. The next chapter dealt with research

methodology.

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CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This section presents the research methods that I used to carry out the study. It covers the

research design, study population, sampling design, and sample size, source of data, data

collection instruments, reliability and validity measurement of variability and data analysis.

3.1 Research design

The study was a cross sectional survey and adopted a quantitative approach with close ended

questions to get a bigger picture of the research phenomenon. It employed a descriptive and

analytical research design to establish how budgeting and budgetary control is important in

Project work.

3.2 Study population

A population in statistics is the specific parameter about which information is desired and it may

include a set of people, services, elements and events, group of things or households, etc. that are

being investigated (Kothari, 2009). The target population was50 staff of IDRC as extracted from

the Human Resource Department list of staff in 2018 but specifically staff members of the

Grants department, Human resource, Procurement, Project Budget Holders and Finance

department that have much interest in Budgets.

3.3 Sampling procedure and sample size determination

The sample size of 44 Staffs was determined from a population of 50 staffs using Krejcie and

Morgan (1970) table of sample size determination for purposes of this study. Random sampling

technique was used to select the staff and the questionnaires were distributed to those staffs.

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3.4 Data source

The study used primary data source. Primary data was collected directly from the respondents

among the selected staff. This was done through a self-administered close-ended structured

questionnaire following the systematic and established procedures as suggested by (Churchill,

1979).

3.5 Data collection instrument

Data were collected using questionnaires modified from previous studies. The questionnaires

were close ended and self-administered since it caters for large population and made it quick to

get data from respondents (Bakkabulindi 2004). Data were collected in one phase which

involved collecting data that were used to draw meaningful discussions and conclusions for the

study.

3.6 Measurement of variables

Budgeting and budgetary control was measured by; Budget controls, Policies and Procedures

(James, 2015). The research variable was measured using interval scales based on a five point

Likert Scale range from; Strongly Agree 5, Agree 4, Not Sure 3, Disagree 2 to, Strongly

Disagree 1 and ordinal measurement used. A five point likert scale was used so as to increase

response rate and response quality along with reducing respondents’ frustration level (Babakus &

Mangold, 1992).

3.7 Data validity and reliability of instruments

The research instrument was tested for both face and content validity. This was done by

involving the subject experts and my academic supervisor for modification and suggestions to

ascertain the content validity and the Cronbach alpha as invented by Lee Cronbach to test

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reliability of the study instrument. The reliability coefficient of questionnaire variables is 0.87

which is above the acceptable 0.5 coefficient as recommended by (Creswell, 2013).

3.8 Data entry and processing analysis

Obtained questionnaires were first edited to check for completeness of data before data were

analyzed. Using the coding frame developed by the researcher, quantitative data were fed in the

computer and analyzed using statistical package for social scientists (SPSS) computer software

version 23. This provided a comprehensive range of statistical programs suitable for analyzing

data as per the study objectives such as frequency tabulations and descriptive statistics.

3.9 Ethical considerations

The permission for identifying data was sought and obtained from Makerere University

(COBAMS). Each questionnaire was administered together with a letter providing explanation

and assurance that all information provided was treated confidential and their identity kept

anonymous.

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CHAPTER FOUR

PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS

4.1 Introduction.

This chapter presents the response rate, background information of the respondents and

descriptive empirical results about budgeting and budget control based on objectives which

include budget preparation process, benefits and the challenges associated with budgeting and

budgetary controls in Non-Governmental organisation (NGO) using a case study of Infectious

Diseases Research Collaboration (IDRC). Descriptive quantitative results include frequency

percentage distribution tables, mean and standard deviation which are presented in line with

research objectives of the study. The variables of non-demographic survey questions were

measured on 5-likert scaled range: 1-Strongly disagree, 2-Aagree, 3-Not sure, 4-Disagree, 5-

Strongly disagree.

4.2 Response rate

The study used a sample of 44 staff at Infectious Diseases Research Collaboration (IDRC). The

researcher was able to access all the respondents and received 43 filled in questionnaires. The

response rate of 97.7 percent was achieved and this was sufficient to provide reliable findings

since it is above the acceptable statistic confidence interval of 95% significance level.

4.3 Background information of the respondents

The background information for the study includes gender, age, qualification, position, years

worked and the department attached.

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4.3.1 Gender of the respondents

This shows the gender of participants for the study in terms of female and male.

Table 4.1: Gender

Gender Frequency Percent

Male 20 46.5

Female 23 53.5

Total 43 100.0

Source: Primary data (2018)

Table 4.1 revealed that, 46.5 % of the respondents were male while 53.5 % were female. This

implies that, there was slight even participation of gender in the study, thus guaranteed reliability

and validity of the data collected from the staff at Infectious Diseases Research Collaboration

(IDRC).

4.3.2 Age group of the respondents

This was centered on establishment of the age distribution of the staff at Infectious Diseases

Research Collaboration (IDRC)

Table 4.2: Age group

Age bracket (years) Frequency Percent

20-29 35 81.4

30-39 6 14.0

40-49 2 4.7

Total 43 100.0


Table 4.2 revealed that majority of the respondents were between 20 years to 29 years of age at

81.4 percent, followed by those between 30 years to 39 years at 14.0% and the least were adult

between 40 years to 49 years at 4.7 percent. This implied that majority of staff at IDRC are fresh

graduates from the university which is good for curbing unemployment problem among the

20

educated youth which led to economic development. The fresh graduate youth deemed innovator

aggressive to deliver quality work to justify their career development, thus their participation

together with elders guaranteed reliability and validity of the data.

4.3. 3 Level of education and professional qualification

This was centered on establishment of the level of education and profession qualification of the

staff at Infectious Diseases Research Collaboration (IDRC)

Table 4.3: Level of education and profession qualification

professional qualification

Total ACCA/CPA PMP CIPS Others

Qualification Diploma Count 1 0 0 0 1

% within Qualification 100.0% 0.0% 0.0% 0.0% 100.0%

% of Total 2.3% 0.0% 0.0% 0.0% 2.3%

Degree Count 5 1 1 8 15


% of Total 11.6% 2.3% 2.3% 18.6% 34.9%

Masters Count 4 8 3 12 27


% of Total 9.3% 18.6% 7.0% 27.9% 62.8%

Total Count 10 9 4 20 43


% of Total 23.3% 20.9% 9.3% 46.5% 100.0%


Table 4.2 revealed the cross tabulation between level of education and professional qualification

of the respondents whereby only one Diploma holder has CPA/ ACCA; Degree holder-five staff

have CPA/ACCA, one staff has PMP and CIPS, while other had others not defined; Masters

holders-four have CPA/ACCA, eight have PMP, three have CIPS and twelve have others. This

implies that a significant number of respondents were masters’ holder at 62.8%, while majority

were professionals with CPA/ACCA at 23.3%. IDRC has the capacity to deliver quality services

21

to the community since staffs are well trained with degrees, masters’ degrees and some had

acquired professional qualification. This also guaranteed reliability and validity of the data.

4.3.4 Position at IDRC

This was centered to establish the position held by the sampled staff at Infectious Diseases


Table 4.4: Position at IDRC

Position Frequency Percent

Employee 40 93.0

Consultant 2 4.7

Ass Director 1 2.3

Total 43 100.0


Table 4.4 reveals that 93.0% of respondents were employees, 4.7% were consultants and 2.3%

was for assistant director at IDRC. The stratification of participants indicate over all participation

of staff at IDRC which guaranteed comprehensive collection of reliable data for the study.

4.3.5 Years worked at IDRC

This was centered to establish the years worked by the sampled staff with Infectious Diseases


Table 4.5: Years worked at IDRC

Years at work Frequency Percent

1-2 Years 10 23.3

3-5 years 20 46.5

6-10 years 12 27.9

> 10 year 1 2.3

Total 43 100.0


22

Table 4.5 reveals that majority at 46.5% of respondents had served between three years to five

years, 27.9% had served between six years to ten years, 23.3% had served between one year to

two years and 2.3% had served above 10 years. This implies that sampled staffs have required

experience above three years which guaranteed reliability and validity of the data.

4.3.6 Departments at IDRC

This was centered to establish the departments at Infectious Diseases Research Collaboration

(IDRC) which participated in the study.

Table 4.6: Departments attached by respondents at IDRC

Department Frequency Percent

Procurement 4 9.3

Accounts & Finance 13 30.2

Human resources 3 7.0

Grants 5 11.6

Research/Science 18 41.9

Total 43 100.0


Table 4.6 reveals that majority at 41.9% were researchers/ science since the organisation deals in

research on infectious diseases, followed by accountants and financial officers at 30.2% who

prepare the accountability for the donations received to fund different projects, 11.6% were

grants officers and 9.3% were procurement officers. This implies that all significant participating

departments in budgeting at IDRC were involved in the study which guaranteed reliability and

validity of the data.

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4.4 Non- demographic information

Findings are presented using descriptive statistics mainly mean and standard deviations on a

Likert scaled range questionnaires following the study research questions. This presents the

budgeting process, budgeting and budgetary controls benefits and challenges.

4.4.1 Budgeting process at IDRC

The first research objective sought to establish the budget preparation process at Infectious

Diseases Research Collaboration (IDRC). At IDRC budget process is the way an organization

goes about building its budget. A good budgeting process engages those who are responsible for

adhering to the budget and implementing the organization’s objectives in creating the budget

Table 4.7: Descriptive Statistics on the budgeting process at IDRC.

Attributes of Budgeting process N Min Max

Mea

n

Std.

Dev

There are budgetary systems followed in the

Organisation. 43 4.00 5.00 4.35 .22

There is a department responsible for Budget

preparation. 43 2.00 5.00 4.48 .73

Budgets are reviewed and Approved before put to use. 43 4.00 5.00 4.86 .15

Budgets are prepared according to each projects demand. 43 4.00 5.00 4.41 .49

There is a budget Committee in the organisation. 43 1.00 5.00 3.76 .23

The budgets are approved by the different Donors. 43 2.00 5.00 4.60 .62

Valid N (listwise) 43

Source: Primary data (2018): N= Number of respondents

Table 4.7 revealed the attributes of budget preparation process at Infectious Diseases Research

Collaboration (IDRC). Regarding whether there are budgetary systems followed in the

Organisation indicate a mean of 4.35 and standard deviation of 0.22. The standard deviation

indicates minimum dispersion from the mean. Majority of the respondents agreed which implies

24

that there are budgetary systems being followed at IDRC which facilitate implementation of

activities with effective use of resource and create an environment of quality service delivery

throughout the organisation. Staffs at IDRC understand budgets and involve in strategic decision

concerning the budgeting process. These findings agreed with Goldstein (2005) who conjures

that following budgetary system in an institution aid in setting priorities by allocating scarce

resources to those activities that are most important to the organization.

Findings on whether there is a department responsible for budget preparation at IDRC indicates

mean of 4.48 and standard deviation of 0.73. Standard deviations indicate minimum dispersion

from the mean. Majority of the respondents agreed that IDRC has a department responsible for

budget preparations with the full support of all staff and top management which is essential for

the success of budgetary process. It is important that for any budgeting process to provide

tangible results there must be a department assigned with authority and responsibility to

coordinate budget preparation. This finding concur with Venol (2012) who assert that successful

budgetary process pre-supposes clear allocation of authority, duties and responsibilities in an

organisation through the establishment of a department to oversee and monitor the entire

budgetary process.

Findings on whether IDRC Budgets are reviewed and approved before put to use indicate mean

of 4.86 and standard deviation of 0.15. Standard deviations indicate minimum dispersion from

the mean. Majority of the respondents agreed that IDRC budgets are reviewed and approved

before use which is essential in the attainment of targets. Reviewing the budget highlights the

departure from efficient performance which enables the management to suggest an immediate

strategy/ corrective action/ controls to mitigate undesirable activities, thus is more useful for

effective budgetary process. This agreed with Anderson (1996) who opines that the budgeting

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process forces managers to approve the budget before implementation and regularly review the

current operating conditions and aids in forecasting and implementing needed changes.

Findings on whether IDRC budgets are prepared according to each projects demand indicate

mean of 4.41 and standard deviation of 0.49. Standard deviation indicates minimum dispersion

from the mean. Majority of the respondents agreed which implies that the organisation prepares

budget to meet the need of each project in order to achieve the set targets since projects vary in

their demands. The findings agreed with Rhelter (2011) who contend that organisation should

introduce suitable administration procedures to ensure effective preparation of budgets according

to each project demands to influence formation of appropriate budget and budgetary control

process.

Findings on whether there is a budget Committee at IDRC indicate mean of 3.76 and standard

deviation of 0.23. Standard deviation indicates minimum dispersion from the mean. Majority of

the respondents agreed which implies that the organisation has a budget committee responsible

for the coordination and administration of the budget process. Managers on committee do

participate in setting goal, developing plans and formulation of policies for effective execution of

budgetary process. These findings agreed with Lau (2013) who posit that organisation should

have budget committee to provide general guideline for preparing budgets for effective

budgetary process.

Findings on whether budgets are approved by the different Donors at IDRC indicate mean of

4.60 and standard deviation of 0.62. Standard deviations indicate minimum dispersion from the

mean. Majority of the respondents agreed which implies that budgets at the organisation are

approved by different donors, thus influence its effective implementation. Donors include

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person, organization or government which donates something voluntarily, they are funders of the

IDRC projects in Uganda and their engagement in budget predicts successful project

implementation in terms of funding and supervision.

4.4.2 Benefits of Budgeting and budgetary control at IDRC

The second research objective sought to establish the benefits of budgeting and budgetary

control at Infectious Diseases Research Collaboration (IDRC) as revealed in table 4.8.

Table 4.8: Descriptive Statistics on the benefits of budgeting and budgetary control at

IDRC.

Benefits of budgeting and budgetary control N Min Max Mean

Std.

Dev

Budgeting and Budgetary control integrates budget

planning & implementations with control and monitoring. 43 2.00 5.00 4.23 .41

Budgetary Control has led to cost effective procurement. 43 2.00 5.00 4.09 .56

Budgetary control helps in expenditure tracking. 43 4.00 5.00 4.69 .12

Budgetary Control helps in budget variance Analysis 43 3.00 5.00 4.58 .58

Budgeting Links the project activities to the objectives of

the organization 43 2.00 5.00 4.04 .65

Budgeting helps to put resources to better use towards

achieving targets 43 3.00 5.00 4.32 .56



Table 4.8 revealed that the benefits of budgeting and budgetary control at Infectious Diseases

Research Collaboration (IDRC). Regarding whether budgeting and budgetary control integrates

budget planning and implementations with control and monitoring of activities indicates a mean

of 4.23 and standard deviation of 0.41. The standard deviation indicates minimum dispersion

27

from the mean. Majority of the respondents agreed which implies that IDRC budgeting and

budgetary control integrates budget planning and implementations with control and monitoring

of activities to achieve the set targets. Budgetary controls enables organisation to

set financial and performance goals with budgets, compare the actual results, and adjust

performance, as it is needed, thus facilitate successful implementation. These findings agreed

with Hilton (2000) who noted that the budget is the most widely used technique to integrate

budget planning and implementations for planning and control purposes needed to achieve set

target.

Findings on whether IDRC budgetary Controlled to cost effective procurement indicate mean of

4.09 and standard deviation of 0.56. Standard deviation indicates minimum dispersion from the

mean. Majority of the respondents agreed that IDRC budgetary Controlled to cost effective

procurement. Budgetary Control provides expenditure limits for procurement which facilitate

optimum resource utilization, thus minimize resource wastage on projects. This finding agreed

with Scarlett (2008) who opine that budgetary controls provides for the cost effective

procurement principles, procedures and practices of achieving given objectives through budgets

Findings on whether budgetary control helps in tracking expenditure at IDRC indicate mean of

4.69 and standard deviation of 0.12. Standard deviation indicates minimum dispersion from the

mean. Majority of the respondents agreed that establishment of budgetary control helps in

tracking of expenditure in the activities conducted on IDRC projects, thus foster optimum

resource utilization to achieve set targets. These findings agreed with Kpedor (2012) who assert

that budgetary control is a tool implored by management to keep track of actual performance to

ensure budgeted standards are met.

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Findings on whether budgetary control helps in budget variance analysis indicate mean of 4.58

and standard deviation of 0.58. Standard deviation indicates minimum dispersion from the mean.

Majority of the respondents agreed which implies that control limits of standard cost/ output

within the budget facilitate determination of variance when compared with actual output.

Variance is either adverse or favorable thus facilitate monitoring of activities. Organisation

prepares budget to meet the need of each project in order to achieve the set targets since projects

vary in their demands. The findings agreed with Waren, (2011) who noted that budgetary

controls provide for variance within the organisation performance at different departments

bearing on one another; this therefore makes coordination of various executive and subordinates

necessary in achieving of budgetary targets.

Findings on whether budgeting links the project activities to the objectives of the organisation

indicate mean of 4.04 and standard deviation of 0.65. Standard deviation indicates minimum

dispersion from the mean. Majority of the respondents agreed which implies that budgeting at

IDRC link project activities to set objectives. Individual projects have unique identical activities

where the budget link with set objectives to effectively implement the organisation strategy to

deliver quality service. This concurs with the findings of Blocker and Weltmer (1980) who

conjure that budget serves as a yardstick or benchmark for controlling on-going operations and

assists in building team spirit and also links the project activities to the objectives where

participation in budgeting is encouraged.

Findings on whether budgeting helps to put resources to better use towards achieving targets at

IDRC indicate mean of 4.32 and standard deviation of 0.56. Standard deviation indicates

minimum dispersion from the mean. Majority of the respondents agreed which implies that

budgeting facilitate better resource allocation to achieve organisation targets since budgeting

29

create a future plan to spend/ allocate resource/funds. Budgeting facilitate effective allocation

and utilization of resources which is the key towards organisation sustainability. These findings

agreed with Blucher and Chen (2002) who opine that budgets help to allocate resources,

coordinate operations and provide a means for performance measurement.

4.4.3 Challenges associated with budgeting and budgetary control at IDRC

The third research objective sought to establish the challenges of budgeting and budgetary

control at Infectious Diseases Research Collaboration (IDRC) and is revealed in table 4.9.

Table 4.9: Descriptive Statistics on the budgeting and budgetary control- challenges at

IDRC.

Budgeting and Budgetary control –Challenges N Min Max Mean Std. Dev

Budgets can be affected by changes in demands 43 4.00 5.00 4.65 .42

Budgeting is a time consuming process. 43 1.00 5.00 3.74 .17

Budgetary control concentrate more on cost reduction

not value addition. 43 1.00 5.00 3.18 .06

Budgeting and budgetary control are usually short

term focused 43 1.00 5.00 2.12 .08

Budgets are sometimes influenced by the Donors 43 4.00 5.00 4.47 .54

Budgeting process is costly 43 1.00 5.00 3.75 .13



Table 4.9 revealed the challenges of budgeting and budgetary control at Infectious Diseases

Research Collaboration (IDRC). Regarding whether budgets are affected with the changes in

demands indicate a mean of 4.65 and standard deviation of 0.42. The standard deviation

indicates minimum dispersion from the mean. Majority of the respondents agreed which implies

that a change in demand for activities within the project is a challenge for budgeting process at

IDRC. The variation in demand for consumables in the project activities does influence planned

cost per unit which is either adverse or favorable and in case of adverse, it’s probable due to poor

30

planning amongst others. However, for the case of favorable variances, other qualitative factors

like quality need assessment. This finding is supported by Neely (2001) who asserted that

variation in the demand for project activities is challenge towards budgetary controls which pose

weaknesses in budgetary controls included; restraining of responsiveness and acting as barriers

to change, budgets are rarely strategically focused and often contradictory, they add little value

especially given the time required to prepare them, they concentrate on cost reduction and not

value addition, they strengthen vertical command and control, they do not reflect emerging

network structure that organisations are adopting, they encourage gaming and perverse

behaviors, they reinforce departmental barriers rather than encourage knowledge sharing , and

make people feel undervalued.

Findings on whether time consuming process is the challenge associated with budgeting at IDRC

indicate mean of 3.74 and standard deviation of 0.17. Standard deviation indicates minimum

dispersion from the mean. Majority of the respondents agreed which implies that time consuming

is challenge for budgeting process since it involves extra manpower to get the estimates as

accurate as possible. Especially for a big project assignment with various departments, budgeting

exercise takes a huge effort. The time consumed may be low in cases where the organisation uses

budgeting software and the employees are well-trained. This agreed with Prendergast (2000)

who identifies three main problems associated with budgeting. First, a lot of time is involved in

the budgeting process. Second, budgets are increasingly inaccurate as a result of shorter product

life cycles and rapidly changing business environment.

Findings on whether budgetary control concentrate more on cost reduction not value addition at

IDRC indicate mean of 3.18 and standard deviation of 0.06. Standard deviation indicates

minimum dispersion from the mean. Majority of the respondents were non-committal which

31

implies that probably staffs in the organisation are reluctant or there is inefficient/dysfunctional

style of management at the entity. The aim of budgetary controls is to minimize costs in the

project but also ensure delivery of superior value/ quality services to people/ clients. This

findings agreed Fred (2011) who asserted that budgetary control is centered more on cost

reduction not value addition in the task accomplishment which adversely affect the project

outcome.

Findings on whether budgeting and budgetary control are usually short term focused indicate

mean of 2.12 and standard deviation of 0.08. Standard deviation indicates minimum dispersion

from the mean. Majority of the respondents disagreed which implies that the focus of budgeting

and budgetary control at IDRC can take short term and long term activities. This enable the

entity to successful accomplish both the short term and long term events of the project, thus

achieve set targets. These findings are supported by Hayes and Abernathy (1980) who assert that

the major criticism of budgets is the over-emphasis on short-term profits at the expense of

continuous long-term improvements such as new product development and customer

satisfaction.

Findings on whether Donors influence on budget is a challenge of budgeting and budgetary

control indicate mean of 4.47 and standard deviation of 0.54. Standard deviation indicates

minimum dispersion from the mean. Majority of the respondents agreed which implies that the

influence of donors on budgeting challenge for budgeting and budgetary control at IDRC.

Donors influence affect the prioritization of activities on the budget to meet the primary needs of

the society in which projects are implemented, thus adversely affect budgeting and budgetary

controls. The donors always priorities activities which benefit their invisible agenda in provision

of funding which at the end turn onto fund winner’s course as public remained exploited

32

psychologically because of dead weight donations. This concurs with the findings of Margah

(2005) who found out that many of the increasing problems experienced by organisations

attempting to manage their budgetary control procedures have been laid at the door of the

budget, presenting a fixed (Preset and unchanging target ).

Findings on whether budgeting process is costly indicate mean of 3.75 and standard deviation of

0.13. Standard deviation indicates minimum dispersion from the mean. Majority of the

respondents agreed to this challenge which implies that budgeting process is costly. Budgeting

process consumes time and requires engagement of experts and consultants, who are costly,

hence make the whole process expensive although its benefits outweigh the costs incurred

especially when automated. This finding agreed with Charles (2014) who opines that budget

process is costly to many organisations although its relevance towards cost management exceeds

the costs incurred.

4.5 Conclusion

Budgeting and budgetary controls have significant contribution toward organisation efficiency.

However, the study concentrated on the understanding of budgetary process, benefits and the

challenges. The next chapter dealt with the summary of findings, conclusion and policy

recommendation.

33

CHAPTER FIVE

5.0 SUMMARY, CONCLUSIONS AND POLICY RECOMMENDATIONS

5.1 Introduction

This chapter presents the summary of descriptive and qualitative analysis of each research

question, conclusions of the study findings, policy recommendations and areas for further

research.

5.2 Summary of research findings

This section presents the summary of findings on each research question following the results in

the previous chapter.

5.2.1 Bio-data of respondents

Bio-data revealed that, majority of the staff at 53.5% were female at Infectious Diseases

Research Collaboration. Majority of participants were youth between 20 years to 29 years at

81.4%; 62.8% were masters’ degree holders, had experience of above three years working in the

organisation, thus guaranteed reliability and validity of the data.

5.2.2 Attributes of budgeting process in NGOS.

The dominant agreed attributes of budgeting process existing at IDRC were existence of

budgetary system and department responsible for budget preparation, regular budget review and

approval; projects demand based budget preparation, availability of budget committee and

approval of the budget by the donors.

34

5.2.3 Benefits of budgets and budgetary controls.

The dominant benefits of budgeting and budgetary controls at IDRC were integration of budget

planning and implementations with control and monitoring, effective control of procurement

cost, expenditure tracking, budget variance analysis, linking the project activities to the set

objectives and better use of resources to achieve targets with overall mean of 4.0

5.2.4 Challenges associated with budgeting and budgetary controls.

The dominant challenges associated with budgeting and budgetary control were unexpected

changes in project demands, time consuming process, concentrate more on cost reduction not

value addition, unfavorable Donor influence and the entire process is costly with overall mean of

4.0. However, staff disagreed with the challenge of focusing on short term targets at the expense

of long term.

5.3 Conclusions

According to the findings on objective one about the understanding of budgeting process, IDRC

has a functioning budgetary system, budget committee with department responsible for budget

preparation based on individual project demands, regular review and approval of budgets with

donors before implementation.

The dominant benefit realized from budgeting and budgetary controls at IDRC were integration

of budget planning and implementations with control and monitoring, effective control of

procurement cost, expenditure tracking, budget variance analysis, better resource allocation and

linking the project activities to the set objectives to support the organisation efficiency.

35

The dominant challenges associated with budgeting and budgetary control at IDRC were

unexpected changes in project demands which fluctuate the costs, time consuming process,

concentration on cost reduction not value addition, unfavorable donor influence.

5.4 Policy recommendation

Based on the findings and the analysis of the research done, it is recommended that IDRC should

strengthen the budgetary controls and monitoring activities through timely collective

participation of all stakeholders to cater for unexpected changing demands for the project to

improve the budget implementation process to achieve set targets.

IDRC should automate its budgeting process using information technology to the time consumed

in the budgeting.

IDRC should regularly meet donors in advance and inform them about the burning needs of

project beneficiaries to avoid the adverse effects of donor influence within the budgeting process.

IDRC should strengthen the expenditure tracking controls by integrating information technology

budgetary control system with a technical staff to monitor the project expenditure in order to

reduce the wastage within the budgeting process to achieve the set organisation targets.

IDRC should prepare both short term and long term budgets to avoid the focus on short term

events since the projects undertaken are health related and continuous in nature.

IDRC should maintain its budgetary system because of the benefits attached and should recruit

more expertise on board to strengthen the budgeting committee.

36

5.5 Limitations to the study

i. The reluctance of some respondents to accept the questionnaires on arguments that they

are lengthy.

ii. The respondents taking long time to fill in the questionnaires.

iii. The respondents tried to rank their organization or departments towards the most perfect

biases their response.

5.6 Suggestion for further research

i. The rationale of budgeting and budgetary controls in the organisation efficiency.

ii. Relevance of budgeting and budgetary controls and impact on procurement process in

NGOs.

iii. The same study can be repeated using triangulation method of data collection to reinforce

the findings before they can probably be referred to NGOs in Uganda.

37

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Appendix: 1: Questionnaire

MAKERERE UNIVERSITY

COLLEGE OF BUSINESS AND MANAGEMENT SCIENCE.

ACADEMIC RESEARCH QUESTIONNAIRE

CONFIDENTIAL.

Dear Respondents,

This study is about BUDGETING AND BUDGETARY CONTROL in Nongovernmental

organisations in Uganda. You have been identified as a key informant. Please spare few minutes

of your busy schedule to fill this questionnaire. The responses will be aggregated and used purely

for academic research.

Your honest and sincere responses are highly appreciated and shall be treated with utmost

confidentiality.

Section A (Please tick/ fill in as appropriate).

Respondent’s Background Information.

1. Gender.

Male 1 Female 2

2. What is your age group?

20-29 1 30-39 2 40-49 3 50 & above 4

3. What is your qualification?

Diploma 1 Degree 2 Masters 3 PhD 4

4. What is your professional qualification?

ACCA/CPA 1 PMP 2 CILTM 3 CIPS 4

43

5. How are you related to the Organisation?

Employee 1 Consultant 2 Director 3 Others 4

6. How long have you worked with IDRC?

< 1 Year 1 1-2 Years 2 3-5 years 2 6-10 years 3 > 10 year 4

7. Which department are you attached to?

Procurement Accounts

& Finance

Human

resources

Grants Research/Science Others

1 2 3 4 5 7

Section B: Budgeting process.

Please read through and Agree or Disagree on the following practices and behaviours described

below. Please tick the most suitable answers out of the alternatives provided for each question.

Strongly Agee Agree Not sure Disagree Strongly

disagree

5 4 3 2 1

1. There are budgetary systems followed in the

Organisation.

5 4 3 2 1

2. There is a department responsible for Budget preparation. 5 4 3 2 1

3. Budgets are reviewed and Approved before put to use. 5 4 3 2 1

4. Budgets are prepared according to each projects demand. 5 4 3 2 1

5. There is a budget Committee in the organisation. 5 4 3 2 1

6. The budgets are approved by the different Donors. 5 4 3 2 1

44

Section C. Budgeting and Budgetary Control-Benefits

Strongly Agree Agree Not sure Disagree Strongly

diagree

5 4 3 2 1

7. Budgeting and Budgetary control integrates budget planning &

implementations with control and monitoring.

5 4 3 2 1

8. Budgetary Control has led to cost effective procurement. 5 4 3 2 1

9. Budgetary control helps in expenditure tracking. 5 4 3 2 1

10. Budgetary Control helps in budget variance Analysis. 5 4 3 2 1

11. Budgeting Links the project activities to the objectives of the organisation. 5 4 3 2 1

12. Budgeting helps to put resources to better use towards achieving targets 5 4 3 2 1

Section D. Budgeting and Budgetary control –Challenges

Strongly Agree Agree Not Sure Disagree Strongly

disagree

5 4 3 2 1

13. Budgets can be affected by changes in demands. 5 4 3 2 1

14. Budgeting is a time consuming process.

15. Budgetary control concentrate more on Cost reduction not value

addition.

5 4 3 2 1

16. Budgeting and budgetary control are usually short term focused. 5 4 3 2 1

17. Budgets are sometimes influenced by the Donors. 5 4 3 2 1

18. Budgeting process is costly 5 4 3 2 1

Thank you

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