DEBRE MARKOS UNIVERSITY

Research proposal on the assessment of budgetary

performance in case of finote selam town budget
administration office

Name ID number
Amanuel walelign GSE 578/12

Submitted to:- Assefa. D (PHD) Submission Date: 26/06/21

Table of contents
Title page

1. INTRODUCTION…………………………………………………………………………………. 1

1.1 background of the study…………………………………..……………………… 1

1.2 statement of the problem………………………………………………………… 2

1.3 objective of the study ……………………………………………………………… 3

1.3.1 General objective ……………………………………………………….…... 3

1.3 2 specific objectives…………………………………………………………….. 3

1.4 significance of the study…………………………………………………………… 4

1.5 Scope of the study ………………………………………………………………….. 4

2. Research methodology…………………………………………..………………………… 4

2.1 Research approach……………………………….…………………………………… 4

2.2 Data type and source …………………….…………………………………………. 5

2.3 Methods of data collection…………….…………………………………………. 5

2.4 Sampling technique ……………………………..…………………………………… 5

2.5 Sample size determination ……………….………………………………………. 6

2.6 method of data analysis…………………………………………………………….. 7

3. Work plan And Cost Break Down ……………………………………………………... 8

3.1 work plan ………………………………………………………….…………..…………… 8

3.2 Cost breakdown…………………………………………………………………………. 9

References……………………………………………………….………………………………….. 10
 1. Introduction
1.1 Background of the study

Budgetary performance is a tool that used to measure the overall activities of an

organization throughout the business process in order achieve their intended
objectives in efficient and effective manner (Dunk A, 2010).

Historically good Budgetary performance in globally has often meant a great

motivation of goal setting procedure for the sustainability of the economic
development as a whole participating in budgetary process a globally creates the
increasing of yield benefit such as increasing employs motivation and
commitment to the budget fostering creativity among all level of employs
increasing a sense of responsibility increasing job satisfaction and also
performance improvement as a whole (Hoque ,2005).

According to Joshi and Abdulla,(1996) good budgetary performance as a

continental levels is used to access the budget preparation and utilization over the
continent in the current year as well as the performance budget implementation by
comparing the current year budget performance to the previous year budget
performance. So good budgetary performance is an indicator of the economic
development of the continent.

According to muthinji,E.(2009) properly managed Budgetary performance is good

to the country development. Because it used to allocate budgets for the intended
purposes in order to satisfy the desire of the people. But absence of good budgetary
management leads the organizational fulfills their goals and objectives. So, good
budgetary performance is the tool of achieving the country long term objectives.

The budget of the right place supports the organizational objective, customers
services, return on investment, promotiving high profit and others objectives. So
organizations budgetary performance is different from one organization to other
organization. But all need adequate budgetary performance management; this
would be consistent with the finance organization to utilize the planned budget
(Horngern, 2002).

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Budgetary performance of the organization is the indicator of organization
performance about budget utilization and preparation. But during assessment of
Budgetary performance fall many problems in the organization such as budget
deficit, unequal of distribution of budget, lack of proper utilization the budget
amount, for planned activities ,the study will attempt to give a good response for
why Budgetary performance is access on the organization and Budgetary
performance are needed to the organization.

Generally now days, every business is required Budgetary performance, it should

be available management tool, express plan for the future year and states how
available resources would be needed (Schick, 2007).

The study will be focus on to show how to assess budgetary performance of an

organization and a problem that are faced during budget preparation and utilization
stage. So the objective of the study is to assess budgetary performance in finote
selam town finance and economics development organization and to see the
organization if they are earning a good return on budget or not. If they are a good
position it is better to keep on, if not to reduce them try to manage it.

The researcher motivation to conduct this study or research is because of the

following reasons. First to solve the problem related to budget preparation and
utilization in different organization and to forward appropriate recommendation to
the employees and the budget officers about the policy of budget preparation.
Second to create awareness of the employees of finote selam town finance and
economics development about the procedure of allocating budget in to different
sector office and kebeles, finally to investigate the methods of measuring
budgetary performance and the effective of the employees.

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 1.2 Statement of the problem
Budgetary performance is predetermined statement of management policy during a
given period. Which provides a standard for comparison with result actually
achieved from to planned (Brown and Haward, 2001)?

According to Cherrington.(2009)Budgetary performance of the organization is the

main indicator of organization performance. But during assessment of budgetary
performance face many problems such as budget deficit, unequal distribution of
budget among sectors and unwise use of budget that is not spent for planned
activities. Hence there should be an inviting effort to minimize budget problems.

According to Allen R, (2001). Good Budgetary performance can be achieved for

addressing of objectives and goals in the most careful way. But according to Joshi
(1996) during the preparation of budget many problem were takes place and
consequences creates a great impact on the performance of the organizations. The
problems are using inappropriate budget preparation procedures, not well
utilization of budget for each department within the organization and the problem
of the distribution or allocation of budget into different activities.

Budgetary performance is the formal expression of the organization which covers

all phases of operations for a specific period of time (Michael. W, 1999).

The problem of budgeting is not only in preparation stage but also on

implementation. The concern of this study is to examine the assessment of
budgetary performance in particular area finote selam town. The study is primary
focus on the organization, in order to give final solution and suggestion to the
problems that faced in the preparation and implementation of budget. The
researcher raise the following questions that will be answer in this course of study

1. What are the problems that faced during budget preparation?

2. What are the main problems that faced in the budget implementation stage?
3. Are there any procedures takes to reduce the problem of budget preparation
and implementation?

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1.3 Objective of the study
1.3.1 General objective
General objective of the study is the assessment of budgetary performance in case
study of finote selam budget administration office.

1.3.2 Specific objectives

The specific objective of the study is:

1. To identify the problems that faced during budget preparation.

2. To identify the main problems that faced in the budget implementation stage.

3. To investigate any procedures takes to reduce the problem of budget

preparation.

4. To investigate any procedures takes to reduce the problem of budget

implementation.

1.4. Significance of the study

The study will help the organization to have a good budgetary practice and to
properly allocate the available resources and effectively implement it. In addition
to this the study will be use to provide ground line information for the organization
about its budgetary performance. The study helps to examine about the factor
affecting budgetary performance in the organization and create awareness to the
organization about budget utilization and implementation. Furthermore, it helps to
identify ways and means by which the organization budgetary performance is
improved to the best level expectation. It will initiate the employees to undertake a
great measure over the problems concerning budgetary performance and also
serve as a secondary source for further study on the similar issues for a researcher.

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 1.5. Scope of the study
The scope of the study will cover assessment of budgetary performance in case of
finote selam budget administration office by taking five years audited budget
document to measure budgetary performance of the town that covers the year of
2004 up to2008 E.C. But to come up with effective and better study, it is better, if
the study will be conducted on over all organization performance as compared with
other similar organization performance, but due to financial and time constraints.
The scope of the study will be extended to the assessment of budgetary
performance in finote selam town.

2. Research methodology
2.1 Research approach
In this research work the researcher use both qualitative and quantitative research
approach. qualitative research approach is concerned with what people feel and
think about a particular subject. Therefore, the researcher select this approach to
know the feeling, thinking and the activities of employees about budgetary
performance analysis of the finote selam town.

Quantitative research approach can be used in order to measure the budgetary

performance of the town by comparing the actual budget to the planned budget by
comparing in number. There is used to measure the budgetary performance of the
organization by comparing the previous year budget spending to the current year
spending.
Generally quantitative approach used to measure the budget variance whether
favorable or unfavorable budget variance due to this the researcher will use both
qualitative and quantitative research approach.

2.2 Data type and source

To conduct this study the researcher use both primary and secondary data. Primary
data will be gathered or collected from employees of the organizations especially
from budget preparation and control department employees. Secondary data will be
collected from the review of selected materials which are related to assessment of
budgetary performance.
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 2.3 Methods of data collection
The researcher use different methods of data collection based on the nature of the
data. To collect primary data the researcher will use observation. Distribution of
questionnaire and interview. The researcher will distribute questionnaire for
purposely select employees of budgetary management and finance workers of the
company. Here the questionnaire should be understandable, clear and not confuse.
Secondary data will be collected from the audited document of the organizations
and other related written materials that is from magazines and reference books.

2.4 Sampling Technique

Here the sampling technique helps for the researcher to reduce some constraint
such as time &finance. Therefore, the researcher in this paper study will use
purposive (judgmental) sampling technique. Because in order to get relevant and
accurate information about the performance of budgeting the researcher will select
the employees that have knowledge about the budgetary assessment as a result the
researcher select a sample based on his experience or knowledge about the target
group to be sample.

2.5 Sample Size Determination

In purposive sampling the sample is determined by according to the knowledge of
the researcher about the group to be sampled. Therefore in finote selam town
finance and economics development organization. There are twenty eight
employees, among these employees the researcher select purposively fourteen
employees. The base of selection is based on the experience of the organization
employees about assessing of budget preparation and utilization performance.
Based on this among the employees of the organization fourteen employees have
know how about the budget, among these the researcher select eight employees
from budget planning and organizing department, three people from budgetary
audit department and three people from internal control department. Base of
selection is knowledge of employees about the assessing of budget preparation as
well as evaluating of budget utilization performance; so only fourteen employees
have this knowledge due to this the researcher select fourteen employees
purposely.
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 2.6 Methods of data analysis
In this study the researcher uses descriptive statistics method of data analysis. This
method includes tabulation and percentage. Tabulation use to arrange data in the
table to facilitate the process of comparison budgetary implementation.

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3. Work plan And Cost Breakdown
3.1 Work Plan

Here the work plan helps for researcher to do his work in a programmed and
planned manner this work plan or time budget directs the researcher to do each
research work sequentially on their appropriate order. This work plan for this
research is scheduled from September up to June as follows.

N Activities Sep Oc No De Ja Fe Ma Ap Ma Jun

o. t t v c n b r r y e
1 Title
selection
2 Proposal
writing
3 Strengthen
the proposal
4 Preparing
review
literature
5 Construction
of
instruments
6 Data
collection
7 Data analysis
8 Submitting
report’1’
9 Editing
preparing
final report
10 Typing
11 Paper
submitting
&presentatio
n

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 3.2 Cost Breakdown
This cost budget helps the researcher to know on the necessary research materials
inputs and to buy their in the appropriate time. It also helps to control the cost of
the materials because it is already specified on the paper each material prices.

No. Item Unit of Quantity Cost (unit Total cost

measuremen in number in birr in birr
t
Stationary cost
1 Paper Ream 1 11 0 110
2 Pen piece 7 5 35
3 Binding piece 3 8 24
4 Exercise book piece 1 15 15
5 Ruler piece 1 10 10
6 Calculator piece 1 140 140
7 Typing Birr 1 70 70
8 Printing Birr 3 60 180
9 Transportation Birr 2 75 150
10 Mobil card Birr 10 5 50
11 Flash disk Birr 1 80 80
12 Photocopy Birr 40 0.35 14
13 Contingence Birr 131.70
(15%)
Total 965.80

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 4. References
Allen. R, (2001).Multiyear budgeting and investment Journal management
accounting, vol. 15,

Brown.DandHaward, F,(2001). Role of budgeting and budget process. (8th edition)

Cherrington, B(2009). Cost accounting managerial approach 2ndedition

Developingcountries.

Dunk .A. (2010). Budget phases, budgetary participation and managerial

performance.

Hogue .Z(2005).hand book of cost and management accounting 1 st edition

.Londonspiramus press ltd

Horngern.C, T.2002) management and cost accounting 2nd edition.Prentice Hall

Joshi J. and Abdulla M. (1996).budgetary control and performance evaluation

system in corporations

Michael W.(1999)cost management strategies for decision.

Muthinji, E.M.(2009)challenges of budget implementation in public sector. Abase

study of the Nairobi.

Rebecca, S,Natasha, S,andDmran, A.(2011).a guide to financial management

literature :For practitioners in

Schick, A.(2007)cotemporary innovations in budgetary setting and budget

commitment.

Silva, L.M.D and Jayamahe, A.(2012).budgetary process and organizational

performance .

Simiyu, T.(2002). Participatory budgetary theory and practice, Georgis state

university science, 394):354-360.

Thommasi, d.(2001)managing government expenditure published by Asian

development bank, Manila, Philippines.

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