College of Business and

Economics
Department of Accounting
ASSESSMENT OF BUDGET PREPARATION, ALLOCATION
AND UTILIZATION IN CASE OF WOLKITE TOWN OFFICE
OF FINANCE AND ECONOMIC DEVELOPMENT

A Research Paper Submitted to Wolkite University, College of

Business and Economics, Department of Accounting, in Partial
Fulfillment of the Requirements for BA Degree in Accounting

Prepared By: Marta Mulatu

Advisor: Kirubel Asegidew

August, 2017

Wolkite, Ethiopia
ABSTRACT
The study was an investigation of “ASSESSMENT OF BUDGET PREPARATION,
ALLOCATION AND UTILIZATION IN CASE OF WOLKITE TOWN OFFICE OF
FINANCE AND ECONOMIC DEVELOPMENT”. The objective of the assessment of budget
control procedure and utilization and its related problems of the case of WOLKITE TOWN
OFFICE OF FINANCE AND ECONOMIC DEVELOPMENT was to identify the problems
that seriously hamper the success of budget. For identified problem feasible solutions were
recommended. The study has used both primary and secondary source of data in order to
collect the information. Mostly the focuses were given to primary source of data which is
collected by questionnaire and interview method of data collection. After the data has been
gathered, it has processed, analyzed and presented. The data analysis was carried out based on
tabulation and percentage method. The data was re-described by descriptive method. Neat and
careful interpretation of the analyzed information was carried out to arrive at reasonable
generalization. The study has aimed to provide reasonable results that could help the
management to take reasonable decision for their future activity.

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AKNOWLEDGEMNT
Frist I want to thank to Almighty God for his endless support in terms of everything and to his
mother Virgin Marry.

I would like to appreciate and owe my heartfelt thanks to my advisor Instructor Kirubel
Asegidew (MSC) for his tremendous help and guidance that let me finish this paper.

Finally, my deep-heart thank goes to all of my friends who supported in everything I needed.

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TABLE OF CONTENTS
ABSTRACT...................................................................................................................................................2

AKNOWLEDGEMNT..................................................................................................................................3

LIST OF TABLES.........................................................................................................................................4

CHAPTER ONE............................................................................................................................................5

INTRODUCTION.........................................................................................................................................5

1.1. BACK GROUND OF THE STUDY.............................................................................................5

1.2. BACKGROUND OF THE ORGANIZATION.............................................................................6

1.3. STATEMENT OF THE PROBLEM.............................................................................................7

1.4. OBJECTIVES OF THE STUDY...................................................................................................7

1.4.1. GENERAL OBJECTIVE OF THE STUDY.........................................................................7

1.4.2. SPECIFIC OBJECTIVE OF THE STUDY...........................................................................7

1.5. SIGNIFICANCE OF THE STUDY...............................................................................................8

1.6. SCOPE AND LIMITATION OF THE STUDY............................................................................8

1.7. LIMITATION OF THE STUDY...................................................................................................8

1.8. ORGANIZATION OF THE PAPER.............................................................................................8

CHAPTER TWO...........................................................................................................................................9

REVIEW OF LITRATURE...........................................................................................................................9

2.1. INTRODUCTION..............................................................................................................................9

2.2. DEFINITION OF BUDGET...............................................................................................................9

2.3. CHARACTERISTICS OF BUDGET.................................................................................................9

2.4. PURPOSE OF BUDGET.............................................................................................................12

2.5. ROLE OF BUDGETING.............................................................................................................12

2.6. CLASSIFICATION OF BUDGET...................................................................................................13

2.7. TYPES OF BUDGET.......................................................................................................................14

2. 8. BASES FOR BUDGETING............................................................................................................15

2.9. APPROACHES TO GOVERNMENT BUDGETING.....................................................................15

2.10. BUDGETARY PROCESS..............................................................................................................17

2.11. THE PROBLEM AREA OF BUUDGETING................................................................................22

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 2.12. BUDGETARY CONTROL TECHNIQUES..................................................................................23

CHAPTRE THREE.....................................................................................................................................25

RESEARCH METHODOLOGY.................................................................................................................25

3.1. STUDY AREA.................................................................................................................................25

3.2. DATA GATHERING TOOLS.........................................................................................................25

3.3. SAMPLING TECHNIQUES & SAMPLE SIZE..............................................................................25

3.4. Data Processing, Analysis and Interpretation...................................................................................26

CHAPTER FOUR........................................................................................................................................27

DATA ANALYSIS AND PRESENTATION.............................................................................................27

4.1. Results of Questionnaires.................................................................................................................27

4.2. Results of Interview and Observation...............................................................................................36

CHAPTER FIVE.........................................................................................................................................40

SUMMARY, CONCLUSION AND RECOMMENDATION....................................................................40

5.1. SUMMARY AND CONCLUSION.................................................................................................40

5.2. GENERAL RECOMMENDATIONS AND SUGGESTIONS........................................................41

REFERENCES............................................................................................................................................42

APPENDIX..................................................................................................................................................43

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LIST OF TABLES
Table 2.1. Characteristics of an effective budget

Table 2.2. Characteristics that adversely impact budget performance

Table 4.1. Description of respondents Ages, Sex and Educational level

Table 4.2. Assessment of participation of employees in budgeting planning Controlling process

Table 4.3. The type of budget controlling mechanism

Table 4.4. Whether the organization prepare budget utilization report or not

Table 4.5. Underutilization or over utilization of Budget exists in the organization

Table 4.6. Major problem faced by the organization and the solution to the problem

Table 4.7. Assessment of Budgetary allocation

Table 4.8. Assessment of budget utilization

Table 4.9. The budgeting process undertaken by the organization

Table 4.10. Suggestions or recommendation of respondent on budget control and utilization

Table 4.11. Variance analysis on adjusted budget and current expenditure of the organization

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CHAPTER ONE

INTRODUCTION
1.1. BACK GROUND OF THE STUDY
There is no universally accepted definition of budget, however, scholar defined as budgeting in
different ways and meanings. Anthropologists have round records of budgeting activities dating
back to early Babylonian (a Siddiquee et al., 2006). There was budgeting activities in china,
Greece, and Rome in practice of modern budgeting back to the beginning modern government at
the drawn of the industrial revolution which, like accountancy protection, originated in the
industrial 1953 (companies experienced growth in technology, improvement in communication
and transportation and exportation of expanding Worldwide market. A budget a comprehensive
and details quantitative expression of management plan in out lining and utilizing economic
resource of an organization for specified period of time plan refers to future goal that is set to be
achieved by organization (Berger and Udell 2004).

Budget is a quantity of future plan of action and aid to the coordination and implementation of
plan. It is systematic and formalized approach for stating and communicating the firm’s
expectation. A budgeting system builds on historical or actual performance. Budget is the most
widely used method of its unique feature in controlling financial resources. Because of its unique
feature in controlling financial resources, preparation of en annual or otherwise budget is
amendatory in most of the entities.

A budget is regally approved plan of finical operation embodying the organization of

expenditure for specified purpose to be made during the budget period and the proposed means
of financial them (Paul and Taylor, 2006). Most growth theories imply that industrialization is a
carrier of economic growth. Nonetheless, for developing country such as Sudan, Somalia,
Kenya, whose economy in predominantly agrarian the emphasis on budget should not be stressed
by under mining the role of other sectors in the economy rather complementary balance has to be
established between the sectors of the economy to reach the relative benefit of budget. Budgeting
is the most budgeting used accounting tool for planning and controlling an organization and
planning managers an able to anticipate and correct potential problem before they happen (Tracy,
2009). Managers then can focus on exploiting opportunities in stated of fighting fires (Journal of
Ethiopia law PP 369-3110).

The budget is a plan expressed in quantitative terms. Sales are forces as no of unit sold and the
revenue cored is then circulated. On the expense relating to that level of sales must also be
calculated. Dedication will be included to over head of factory overhead expansible which will
not be affected by the level of activities. Allowing for these factors the researcher can estimate
profile that the business will estimate the star of business fiancé at the end of coming year.
Although where primary involved in financial budgeting resource of labor or machine, etc., can

7
also by budgeted for how to manage budget & cash flow this study carried out with objective of
to examine or assess budget administration in Wolkite Town Office of Fiancé and Economic
Development.

Budget identities source of income and assist in planning expenditure most organizations and
many individual find careful planning is an essential activity in achieving goal. Most people,
business and government have limited fund to be spend, and so they must decide which expenses
most important to achieve the organization restated objectives. Budgeting means the act of
preparing budget. So budget preparation use not only planning and also controlling and utilizing
the financial resources. Planning always involves specifying the type and quality of service that
will be provided to constituents, estimating service cost and determining how to for the service.
In general budgets are ensuring allocation, efficiency, motivation; enhance controlling,
communication and coordination.

Budget can be applied for every economic resource like money material and human resource.
The budget division allocated the budget amount depending up on the approved budget of the
work units. All work units have a total budget of the work unit. All work units have atonal
budget ceilings up to which they can prepare their annual operating budget not compared last
year to the previous year.

1.2. BACKGROUND OF THE ORGANIZATION

Wolkite town is located in the southern part of Ethiopia. The area has estimated surface area of
19800 sq. km with the population of 278,000 and it is now estimated to be 1,000,000. The
population is more of younger and compositions regarding ethnicity it is almost wolkite and
beyond center of Gurage zone lives in real area. The administration center of Gurage zone is
Wolkite, which located 158 km from Addis Ababa to the south. The great majority of the wolkite
population is Muslim. There is annelid for addressing poverty human development, rural
development food security, capacity building greater commercialization of agriculture and
industrial development.

Wolkite town finance and economic development main coordination department established in
1996 E.C the organization has three departments such as budget and finance department,
Economic and development department and audit control department.

The objective of this public bases are:

 Controlling of this public expenditure.

 Collecting the government revenue from different source.
 Preparing annual budget loan.
 Managing and controlling government fund.
 Activating zonal economy and others.

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1.3. STATEMENT OF THE PROBLEM
Budgeting is the means by which organization, investors and government revise their revenue
and expense to know whether there business is flooring in the right way as they plan and also
checking the magnitude of cash invested on the business. Wolkite town finance administration
office were the office which secured economic and social development to the community in
which the government allocate budget in every fiscal budget years to this town administration to
bring about socio economic development and good governance. Each government office is
highly effected to fusilier its budget effectively and defiantly without corruption and other
problems. If the budget system is poor or not competent one, the goal of the organization is also
not being achieved in recurrence in the plan and this led the office unsuccessful performance.
Now days there are many problems with are commonly seen in any other from administration in
the finance aspect for insurance, budget administration is usually week due to many reasons in
shortage of skill man power and lack of adequate knowledge of budget experts. There were a
number of constraining or factors for development such as poor budgeting system is a big
challenge result in to challenging for the achievement of the office which made the effectiveness
of the budget ineffective (Ayyagors,, 2006). Budget is a quantitative expression for set of time
period and a proposed future plan of action by management. Budget is also comprehensive
activity that requires details planning, analysis and it is entire process of budget controlling,
reporting and allocation of available financial resource. The accounting system that provides
assistance to the administration in carrying out the plan. In any organization who fails to prepare
its budget systematically is expose to uneconomic and misappropriation in allocating and
utilizing its resource.

Therefore by taking the above problems in to mind the researcher was tried to answer the
followings basic questions.

1. How to asses budget utilization in the organization?

2. Is there budget preparation practice in the office?
3. What are the problems of budget allocation process?
4. Is the budget fairly allocated in the office?
5. What are the factors that affect budgeting process?
6. What mechanisms dose the organization following when the approved budget amount
is not sufficient?

1.4. OBJECTIVES OF THE STUDY

1.4.1. GENERAL OBJECTIVE OF THE STUDY

The general objectives of this study is to investigate how the finance organization prepare,
allocate and utilize the budget and put control mechanisms of the basis of manual, police,
procedures set by the organizations.

1.4.2. SPECIFIC OBJECTIVE OF THE STUDY

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 The specific objectives of the study are:

 To evaluate the strength and weakness of the finance department regarding to budget
preparation, allocation and utilization.
 To asses a problem that faces the department in planning and utilizing the budget.
 To identify the approaches to budget used by the department.
 To evaluate the budgetary estimation system.
 To determine the factors that affects the budget utilization process.
 Finally, to suggest and recommend the organization about budget planning and utilizing.

1.5. SIGNIFICANCE OF THE STUDY

The study has the following significances:

 To create awareness to the organization about budget utilization and controlling.

 Help to know the basic ideas and process while preparing successful proposal.
 Help to increase the research’s experience and ability.
 Helps the department to know what looks like its budgeting system after this study has
conducted.
 Give away for other researcher who wants to make further investigation in the area of
budget practice and to conduct detailed research on issue.

1.6. SCOPE AND LIMITATION OF THE STUDY

The main concern of this study was to see the importance of budget preparation, allocation and
utilization in Wolkite Town finance administration. Here, the focus area of this research is how
the department plans, establish and evaluate the budget. Even though, many problems may be
found in the area, this study will focus on the problem related to budget preparation, allocation
and utilization section.

1.7. LIMITATION OF THE STUDY

In doing this research paper, the researcher has faced the following constraints.
 During data collection it was hard to find the response of the respondents.
 Lack of sufficient materials from the expected organization.
 Time and financial constraints.

1.8. ORGANIZATION OF THE PAPER

The study consisted of five chapters. The first chapter has consisted of the introductory parts
which includes background of the study, back ground of the organization, statement of the
problem, objective of the study, significance of the study, scope and limitation of the study; the
second chapter has covered only the literature review part. The third chapter has covered
research methodology. Chapter four of this research has dealt with analysis of data that has been
gathered from workers of the office. The fifth and the end chapter of this research has covered
conclusion and recommendation.
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CHAPTER TWO

REVIEW OF LITRATURE
2.1. INTRODUCTION
Budget Adoptability Government in democratic society seeks to adopt their policies to the
preferences of society, granting that in the process they exert substantial pressure up on the
nature of thus preferences. Given the lack of precise, clearly defined preferences schedules,
society through government must be the level of various activities and the exact amount to be
spent in each activities. The basic power expenditure rest with the legislative body as the
representative of the voters, but of necessity, the chive executive and the administration exercise
great influence both in guidance legislative action and implementing polices within the frame
work of the broad guidelines established by the legislative. The government in practice primarily
the executive and the administrative organization select to be used to attain the goals of society
(John F. Due Friedlander’s 2006).

2.2. DEFINITION OF BUDGET

Budget is a detail plane of financial operation expressed in quantitative terms. It is a short term
financial plan to serve as advice to aid and guide management towards proper utilization of
recourses and accomplishment of objective set prior by management. (Anthony and
Govindarajan, 1998; 389)

Budget is not only the detail list of estimated expenditure for a given period of time, but also
embodies the proposed means of financing them (Ibid, 389).

According to Lynn and freeman budgeting is the general process of allocating scarce recourses to
unlimited human wants. More specifically a budget is a plan of financial operation involving
both expiration of activities in quantitative terms and specification of human organization will
acquire use recourses during particular period.

2.3. CHARACTERISTICS OF BUDGET

Measuring effectiveness and control

Most government and nonprofit organization provide, services, not tangible products. This
presents both operation and measurement or control difficulties. The problem of developing
measuring of effectiveness in providing services is particularly difficult for most non-profit
organizations.

1. Revenue Budget
In developing the budget government and non-profit organization often have a usual
difficulties in budgeting revenue. These primarily because of much revenue denote result
from the organization rendering of service to individuals. Even clients oriented

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 institutions such as hospitals and universities may have fear for service rotation rate
artificial set at fixed level though out the year, despite the fact that they may incur
significant unbudgeted cost in providing these services.
2. Expense budget

The problem if estimated expenses are more manageable than budgeted revenue. It is
generally easier to record and classify expenses when they are actually incurred. Many times,
however it is virtually impossible to much expense incurred in providing a program service, or
operating department to any a specific revenue sources. In this case the budget will serve as tool
for controlling the program expenditure, but not for ovulating this effectiveness in meeting
members need.

Budget planning

Every government organization need to make basic about how it will allocate its resources. The
mechanisms of the market; however tends to simplify this task for profit oriented organization
than government and non-profit organizations.

Government and non-profit organization budget often is not easily adopted to change
circumstances during the courses of the year. One reason for this is many non-profit
organizations do not undergo significance variation in the level of service they provide over the
course of the year. As other reasons are that there cost structure often contains many costs that
are considered fixed.

Budget Participants

Preparation of budget found to involve first about any one of important who is associated with
government and non-profit organizations. This usually include the top administration of the
organizations, the lead of department or program and the transfer or do not need to face investors
who expect a good return on their investment. Budget are important tool for effective short term
planning and control in organization. An operating budget is allocation of the expected expense
for the budget period. (Ibid, 1998, 377) Basically, the following features characterized an annual
budget.

It estimate the profit potential of the business unit. It is stated in monitory term despite the
monitory amounts may be backed up by non-monitory amount (example; unit sold or produced).
It generally covers a period of one year except in business that are strong influenced by seasonal
factors where there may be two budget per year; a fall budget and a spring budget. (Ibid, 373-
374)

A list of characteristics of an effective budget has been affected by Meyers (1996) below.

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Table 1 CHARACTERSTICS OF AN EFFECTIVE BUDGET

TERM CHARACTERISTICS

Accountability Detailed control should be established which have the goal of insuring
that policy detectives are carried out by manager of contracts and all
concerned parties.
Comprehensiveness Include all uses of government’s financial resources.
Constraints Contains limitation on the amount of money that need be dominant
Cooperation Budget should exist in harmony with the other decision process and
should not be dominant.
Honesty Contains un-biased projection
Judgments Encourage participants to seek the most effective at the least cost.
Legitimacy The budget process should reserve the important decision to legally
appropriate authorities.
Perception Consider both near and long term.
Responsiveness The budget must adapt policies that much public preferences.
Time lines A budget should compete regular tasks when expected.
Transparency The budget and budget procedures should be understood by
participants and outside stock holders.
Source; Meyers, Roy T, 1996. Is there a key to the normative budgeting lock, the World Bank,
Washington DC.

Table 2;

Characteristics that adversely impact budget performance.

Term Characteristics

Extra-budgetary Extra-budgetary fund do not force tradeoffs between competing priorities.

fund Extra-budgetary fund generally circumvent central controls, there by
violating the comprehensiveness standard.
Earmarked Earmarked funds are dedicated to particular uses or purposes. Agencies
funds with Earmarked funds may have title or no incentive to economize.
(earmarking) Earmarking may impede the government’s ability to be flexible in
managing it budget or in allocating resources.
Unpredictability In accurate budget estimates, arbitrary budget cuts, and non-timely fund
disbursement will substantial budget Unpredictability.
Un reliable In accurate and un-reliable information will conspire against enhancing
information budget performance.

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Source; Meyers, Roy T, 1996. Is there a key to the normative budgeting lock, the World Bank,
Washington D.C.

2.4. PURPOSE OF BUDGET

The objective of budgeting and budget is to control the organization approved projects and verify
the annual budget to the extent of approval, and to examine carefully the evaluation and
utilization of those budget. A properly prepared budget provides government and other with
several benefits. The primary purpose of budget is to present and describe the financial
ramification of plan for the future. The budgeting process requires individual to consider future
courses of action and the resources needed to accomplish various activities. It also promotes
coordination and communication among divisions or departments within government function
effectively and efficiently there should be an interaction among departments and clarity of how
action alone affect another. Then, the manager must communicate their plant to each other in
order to coordinate the activities of the government as a whole. Moreover, budgeting also aids
allocation of limited resources by ensuring that information is available help managers determine
each activity should receive the limited resource of the organization.

A budget also serves a useful benchmark against which to evaluate and control actual
performance result to the budget to determine what area deviated from planned activities and
whether to take corrective actions. When actual budgeted results do not much, the financial and
operating activities of the government needs to be adjusted, the budget may need to be revised,
or both by the responsible authority.

Thus, the evaluation process serves to control operation by determining when and where a
company did not achieve planed results. (Anisworth, 1997; 145-146)

2.5. ROLE OF BUDGETING

The role of budgeting is greatly for governmental and non-governmental organizations, and not
for profit organizations, and not profit organizations. It is useful in key managerial function such
as planning coordinating and indicates the society concerned what decisions have made of the
organizational objectives (Anthony and Govindarajan, 1998; 375).

Planning

A budget that provides a detailed action plan for organization enable the manager to anticipate
the organizational emergencies long before they arises .Then manager seek solution through
careful study and think a head to prepare for anticipated problem or condition. (ibid; 375).

Organization

One of the main function of budgeting is to increase efficiency. Budgeting, especially program
budgeting reveals the fact described be Neath ; which operational department or program or
responsibilities centers exist only for historical reasons, whether the department are

14
accomplishing activities for which they are responsible , and whether interdepartmental
communication is minimal or non-extent of all. Thus, the economical method to accomplish the
objectives should be used; diseconomies can be identified in organization under budget. This
contributes to great deal of efficiency to the organization. (Anthony and Govindarajan, 1997;
376)

Coordination and cooperation

Budget control promotes better coordination among different level of departments in their effort
so that the objectives of the organization as a whole harmonize with objectives of its part. For
any organization that is each have specific, well defined responsibility and all activities are
organized along program liner. Interdepartmental program are designed so that each participant
is fully aware of its role. Thus, budgeting through managerial participation in the budget
preparation, pools together the plan of each manager in an organization and cooperation. (ibid;
376)

Resources allocation

Organizational resources are generally limited with alternative set of computing uses. Budgeting
provides a wise means of allocating the resources among those uses in accordance with their
priority goals. (Thomas, 1978; 250)

Control

Control is necessary to ensure that plan and objective as laid down in budget are being achieved.
Control as applied to budgeting, is systemized effort to keep management informed of where
planed performance is being achieved or not. For their purpose, comparison should be made
between planes and performance. The difference is reported to decision makers of taking
corrective action or for deciding on incentives to those who perform well. Thus, control is by no
means possible without budget. (Drebin, 1978; 66-70)

2.6. CLASSIFICATION OF BUDGET

2.6.1The rational for budget classification

A primary purpose of budget classification is to control expenditure in terms of appropriation. It

also serve to secure information that will be helpful in the preparation of the budget ‘for
succeeding periods. It also insures that money is expanded economically and is also used to
prepare financial statement. Moreover it also used for comparative purpose. (Tenner and Lynn,
1960; 106)

2.6.2 Types of budget classification

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The purpose of budget classification to some extent influences the type of budget classification
used. As a result, budget can usually be classified on the basic of three different but not
necessarily exclusive criteria.

1. Based on time range

A. Capital budget; obviously deal with the acquisition of fixed asset. They are usually prepared
separately from the operating budget and by different people. They are likely to approve by
legislative body year at a time. But it is very helpful for wise of management\of a resource to
plan to acquisition of aided asset or project several years in advance this is so called the capital
program.

B. Operating budget; are a concerned with the current year expenditures. They are sometimes
called recurring expenditure because similar sort of expenditure needed year after year.

2. Based on the phase of progress

A Tentative budget; are budgets that have not yet been officially approved but are still in
process.

B Enacted budget; budgeted that have been officially approved and are a binding legal
document.

3. Based in behavior of expenditure

A. Fixed budget; are an expenditure requests that are affixed in total dollar amount cannot be
exceeded.

B. Flexible budget; are expenditure request that are fixed as per unit cost of periodically (i.e.
Fiscal year). Recurrent periodically (i.e. Fiscal year). Recurrent periodically (i.e. Fiscal year).
Recurrent good and service and can increase it changes in circumstance in indicate more unites.
(Lynn and Freeman; 1974, 55-58)

2.7. TYPES OF BUDGET

2.7.1 Recurrent budget (operating budget)

It is defined as all non-discretionary expenditure payment of salaries, debit payment, legal

obligation and other office expenditures that are incurred periodically (i.e. Fiscal year).
Recurrent budget are used by government organization to formalize their activities of a given
period usually fiscal year. They included estimates of the resources expected to be available
during the year and projection of how those will be expended. For many governments
organization requires the use of and operating budget. By the beginning of each fiscal year a
balanced budget( on in which a total of the estimated funds available the project revenues and

16
fund balance must be sufficient to meet the anticipated expenditure) be approved by their
legislative bodies.(Babunakes,micheal;1976)

2.7.2 CAPITAL BUDGET (CAPITAL PROGRAM)

The capital budget is defined as discretionary expenditure of economic development activities

with clear defined time table. This are the planes expenditure and the means of financing thus
expenditure expected to be made for long leaved or capital asset such as land, buildings and
equipment. The usually cover more than one year period.

2. 8. BASES FOR BUDGETING

In well-established program, previous year’s budget with variance is usually ground for the
preparation of budget. If on the other hand, the program is new, the preparation of effective
budget requires much deviation to working with carful research to produce realistic estimator of
both revenue expenditure. They should be planned to maximize service output without producing
a surplus or a deficit. To consider past budgets as a base of preparation, it should be understood
that conforming to a budget is not necessary good, and departure from a budget (deficit or
surplus) is not necessarily bad. Because budget are set based on circumstances that were believed
to exist, a manager who discovers a better way of operating than stated in the budget should
operate in that fashion. (Douglas, 1995; 622-628)

2.9. APPROACHES TO GOVERNMENT BUDGETING

A government budgeting system should be designed to fit its environmental factor. Some of
which way be unique. Its system should provide a planning and control balances that are
appropriate to its circumstances. The several approaches to government budgeting have marked
different on their emphasis on planning, controlling and evaluation. The approaches are
performance approach, planning programming budgeting approach, zero base budgeting
approach and objective of expenditure approach. The first three approaches are known as modern
approach were as the last are is called traditional approach.

2.9.1 The performance approach

Performance approach, according to Lynn and freeman, is concerned with an expression in

financial terms of the major activities or functions of unit, (1982 p62). The description of each
program is based up on the object of expenditure which are regard to do it. Such a budget
expresses the operation of the a government in term of output of service performed for the
public rather than in term of input, that is, manpower to be hired ,service to be paid, or goods to
be bought.

The performance approach focuses on classifying budgetary account by functions, activities and
organizational unit and objective of expenditure. It also lays attention on investigating and
measuring existing activities in order to obtain maximum efficiency and to establish cost
standard and others. Moreover, the most important contribution of this approach ; both input

17
and output are measured and the result of each activities formally monitored as are costs
incurred in obtaining this results, its emphasizes up on the inclusions with in the appropriated
budget of a narrative description activities with requests to supported by estimate of cost and
accomplishment in quantitative term. (Tanner and Lynn, 1997; 62-63)

The performance approach assists both the legislative and the public in understanding the muter
of activities under taken by executive branch. It provides the legislator additional freedom to
reduce or expand the amount requested for particular function of activities. This approach also
provide the chief executive with additional revenue of control over his subordinates rather than
being restricted only to how much his/her subordinates spend, and he/she may evaluate the
performance of activity in terms of both birr and activity unit standard. (Ibid, 63-64)

The performance approach according to Tenner and Lynn is most popular over other approaches
for the following reasons. It prints the legislative body to make balanced decisions provides
answers to areas such as agencies, the reason for asking appropriations, the type of services the
agency rendered to justify its existence, the type of programs or activities the agency to achieve
its objectives the volume of work regulated in each activity the level of service the legislative
and tax payers expects if the required amount are appropriated.

2.9.2 PLANING-PROGRAMING-BUDGETING APROACH (PPB)

PPB approach emphasizes broad policy, goals, strategies and objectives rather than details of
spending. It considers long rang planes and then evaluates costs and benefiters of different ways
of meeting the goals and objectives. It also emphasize the governments over all programs rather
than specific departments.

PPB approach has many contributions mostly it is on planning process (i.e. the process of
making programs and policy decisions that leads to a specific budget and specific melt-year
plan). However, it does not replace need for the carful budget analysis to ensure that approved
carried out in an efficient and cost conscious manner; nor does not remove the need for the
preparation for the detailed and types of information support budget submission.

The main peculiar characteristics of PPB are; it focuses on identifying the objective of the
government and the relating all activities these regardless of organizational placements, future
year implications are explicitly identified, all pertinent costs are considered ,and systematic
analysis of alternatives is reformed.(Ibid ;67)

2.9.3 ZERO-BASE-BUDDGETING APPROACH (ZBB)

One methods of continually evaluating programs and services is ZBB approach. It’s primarily
idea is that each program must justified its existence every year. No program is assumed to be
continual from one year to next. The starting point for the budget each year is zero.

18
The essential idea of ZBB is that the continued existence of programs or activities is not taken
for granted; each service must be justified in its entirely every year. It is designed to force
annual revises of programs, activities and expenditures to save money by identifying out dated
programs and unnecessarily high level of services to concentrates the attention of officials on the
cost and benefits of services, to cause a search for new ways of providing services and achieving
objectives to improve the objectives of the managements to plan and evaluate to provide better
justifications for budget and finally, to improve decisions made by the executives and
legislatives branches of the government. On the other hand, ZBB is time consuming and a
pleasant from point view of managers where operations are being review. (Lynn & Freeman)

2.9.4 OBJECT-OF-EXPENDITURE APPROACH

Object of expenditure approach also called traditional approach has an expenditure control
orientation. It continues to the most widely used. Object of expenditure approach is simply list
expected expenditures and say how much is required for each one. The amount of expenditure
required spend will be depend in how much control the budget authority wants to exercise over
the department head. The level of details on such approach detail of expenditures, there is more
exercise over the department head control and less flexibility and vice versa. (Lynn & freeman,
1982; 60)

This approach becomes popular as the bases for legislative control over the executive branch. It
involves; subordinate agencies submitting budget request to the chief executives in term of
expenditures to be made that is, the number of people to be hired in each specified position and
salary levels, and specific goals or services to be purchased during the upcoming period, the
chief executive compiling, modifying and submitting an overall request for organization to the
legislator in the same object- of- expenditure terms, the legislature making line items
appropriations, possible after revising the requesting along the objective of expenditure input
lines, and a great degree of legislative control will be typified if appropriations are stated in
terms of the most detailed levels. (Ibid, 60-61).

2.10. BUDGETARY PROCESS

The budget process refers to a complete cycle of activities of the government and it has come in
to use describing the complete cycle of activities of the government. It includes budgetary
planning and preparation of requests or appropriations, executive branches reporting on budget
execution, and consideration by the legislative body of manner in which its authorization has
been carried out.

2.10.1 BUDGET PREPARETION

Financial planning requires that the preparation of budget should be stated in time for its
adoption before beginning of the period to which it applies. To ensure the adequate time will be
allowed, a budget calendar is frequently prepared lasting each step in the budgetary procedure
and the time allowed for its completion. The budget officer considers series of steps, to prepare

19
the yearly budget. This includes must revenue estimate, expenditure planning and preparing the
budget document.

1. REVENUE ESTIMATES

Unless there is possible source of revenue estimates from different sources, expenditure planning
is not possible. Therefore the possible source of revenue have to be known and the revenue
should be estimated based on them before taking steps to expenditure planning. According to
Tenner &Lynn (1960; 15) the budget officer must have an excellent idea of the revenue which
taxes currently provided by law will yield at current rates. Having produce that such an estimate,
the budget officer and the chief executive can compare it with their knowledge of change
demand on the government. Such a comparison should be provided an impression of the
adequacy of the estimated revenue to meet the need of expenditure. Thus, before taking any steps
to expenditure planning, the possible source of revenue has to be known and the revenue should
be estimated based on the possible sources.

2 Expenditure planning

Expenditure planning is considered as a year round activities that includes the following steps.

Step 1; communication of budget instruction. The budget instruction includes a statement of

broad goals, polices expectations and other appropriate comments from the executive to the
department heads. Practically should also include the budget calendar, supporting documents and
procedure for filling out any necessary forms.

Step2; call for department head; collects estimates of expenditure from the sub-units revises
them and combines them in to determinant budget.

Step3; estimate of other charges;

Step4; revision of estimates; the chief executive with knowledge of priorities and total
estimated revenue revised department estimates .This is especially important if the expenditure
requests have exceeded the revenues estimated.

1 PREPARING THE BUDGET

The chief executive, after considering the requests and taking necessary action on them, prepare
the budget document to be selected to the legislative body for approval. (Lynn and free man.
1974; 78-90)

2.10.2 BUDGET EXECUTION

Steps are taken to control the budget properly after appropriation ordinance are passed. Budget
execution refers to the implementation of plan of organizational unit in to real action and

20
includes every decision and transaction meet during the budget period. The budget execution
process includes allotment, accounting treatment, pre auditing and reporting activities.

ALLOTMENTTS
Appropriations ordinance or act does not specify the rate at which expenditure are to be made
throughout year. Allotment is evident however that the follow of revenue and expenditure is not
unit for. Allotment are executive assignments of appropriated sums by time period or to
organizational unites or activities. (Hay Wilson; 1995, 70)

Allotment is the allocation of the amount appropriated indicating the time appropriation is
consumed, the rate of usage and the organizational unit responsible for consumption. Unlike
appropriation which is made by legislative body and frequently can be changed by that body
only, allotments are made by the chief executive and can be changed by his/her without any
action of the legislative body.

The first step in expenditure control is a cable by the chief executive departmental allotment
schedule. At this, each department knows the maximum amount, which his department may
spend. His task now is determine how much of the appropriation is spend during each month,
quarter or other period; and must determine how the sum will be spread among his/her activities.
(Tanner and Lynn 1968, 37)

The department allotment schedules together with any addition data supporting the remaining for
allotment such as work programs are submitted to the chief executive, which has received
statement from the budget officer showing estimated receipts by month, quarter for other periods
up on receipts of department allotment schedule, the total allotment are requested to each period
during the year, are tabulated and compared with the anticipated receipts as far as possible,
adjust are made to being expenditure with in the actual resources available for the particular
period. If the budget is effectively control, organizational unit must stay within their
appropriation and the amount allotted to them for a particular period.

BUDGET ACCOUNTING

According to the tanner and Lynn, budgetary accounting is one of the principal devise through
which control of budget execution is exercise 1960, 45). The estimated revenue and
appropriation in the amount approved by legislative body are actual recorded in the books
where .they may be compared with the actual development of the period. However the activities
with which appropriation account are set up depend on the detail with which appropriate are
made separate general account are established for estimated and actual revenue. This separate
accounts for appropriation are set up in the general ledger manual.

 Appropriation account
 Expenditure account
 Encumbrance account

21
PRE-AUDITING

This refer to function of approving transaction before they have been takes place or recorded.
Responsibility for the function is always assigned to the chief accounting office through the large
department, who perform some or all of the pre-auditing function for revenue transaction, pre-
auditing include; verification of auditing, accuracy of task, revenue base, calculation,
classification and coding for entry in the recorded, from the expenditure side pre-auditing may be
directed toward prevention of miss appropriation of funds. Over spending of appropriation,
expenditure for illegal purpose and finally it ensure the use of proper method and procedure.

Control of miss appropriation of fund is exercised by combination of appropriation procedure,

pre-audit and post office accounting this is done under direction of the chief accounting officer
of the government to determine whether prescribed procedure have been followed. The
examination of the book of accounts by an independent past auditor is also a powerful tool for
identification of miss-appropriation. Furthermore the use of proper methods and procedure is an
integral part of the process of internal control.

Expenditure are illegal if they exceed the appropriation that authorized them or it they are made
for purposes not considered by the appropriations.

REPORTING

Reporting is an essential element of budget execution for which the executive branch all the
government is responsible. In performing this functions, the executive should meet the need of
many different ,group .the annual financial report is made to provide the legislative body ,
investors, public finance students, political scientists, and the general public is the information
which each group needs. The monthly statements are primarily designed to meet the need of
administrative persons such as the chief executive, supervisor at the general level of the
government and budget examiners. The principal part of the foreign budget report is to provide
information for action, solutions, and variation from the budget. The annual financial report is
prepared by the financial officers of governmental unit to show it is financial condition and
operation. (Tanner and Lynn, 1960; 347)

2.10.3 BUDGET LEGISLATION

After preparation of final budget officer, budget document including massage of chief executive
is termed over to a specially by committee, which make any investigation it deems necessary,
calls on departmental needs to justify their requests and on the chef executive to explain his/her
recommendation and conduct public hearings on the proposed budget. The committee then
makes it recommendations over to legislative body. After completing the budget hearing
investigation and considering the committee recommendations, the legislative body proceeds
adopt the budget through passage of appropriation ordinance. (Hay and Wilson, 1991; 68)

22
2.10.4 BUDGET EVALUATION

Budget evaluation is analysis of alternative specially the full costs of each and the magnitude of
benefit that can reasonably be expected, from each option seeking to satisfy one or more
objective. It is the systematic method of examine specific problem and finding alternative
solution while identifying the cost and benefit of each solution. It also provides meaning full
alternatives and priorities in decision making, besides trying to determine whether resources are
allocated in the best way to be effective in

Achieving objectives, It also measures progress towards achieving these goals and help to test it
programs attaining there objectives. Furthermore, it can help administrators demonstrative to the
legislative body and the public that existing programs and planned further programs accomplish
their stated objectives. It act as catalyst in that it provided the estimation for change. That is
budget evaluation help to; make decisions, modify, expand, reduce, continue or terminate
programs. (Michael, babnakis, 1976; 51-52)

Evaluation involve defined goals and specific measures of impact. This involves the
establishment of the unit of measures of productivity, cost and actual accomplishment. In other
words as a pre request, evaluation needed the availability of the feature or conditions associated
with performance and program budgeting system. (p 53)

The term “evaluation” has been expressed in a different way and has been variously described as
a performance auditing, implementation review and program monitoring. Evaluation can be both
prospective and retrospective. Retrospectives refers to the assessment of progress and impact
analyzing the reason for success and failure and deriving lessons that in turn, could contribute to
the achievement of government objectives. Evaluation is not mare analysis of expenditure flow
but is wider than this. More specifically its feature are;

 An analysis of objectives of each program, the approach to their formulation and target
setting and the adequacy of the system evolved for their implementation.
 The examination of the effectiveness of the procedures and scheduled used for the
implementation of the budget.
 An assessment of the impact programs in the light of their objectives and analysis of the
flow of benefit and their use.
 To ascertain the wastage of man power, materials, and money.
 It increased economies, efficiencies and effectiveness in governmental operations.
 It provides justification for elimination of uneconomic project and programs.
 It provides the introduction of increased nationalities in to the decision making process

2.11. THE PROBLEM AREA OF BUUDGETING

The advantage derived from budgeting system are so obvious that there would hardly be concern
were the system is not in use in one form or the other. Despite, such a wide application, budget

23
have certain limitations, which would be kept in view and taken care of if full and effective use
of the budgetary system is to be made. The limitations are as follows;

A. budgets are based on estimate :

The budget are essentially based on the estimates and forecast. Estimates and forecast
relating to future can never be perfectly accurate since future is always uncertain. At
the time of interpreting the result, these limitations should be kept in view otherwise a
slight error may lead as to adverse situation.
B. Lack of balanced budget ;
Government is expected to promote development, provide social, reduce
unemployment and even social security funds, which require large amount of budget
on the other hand, there is a remarkable persistence in the nation that government
budgets ought to be balanced debts. And these two goals are critical problem in
government budgeting.
C. Time effective;
Budgeting is a length and time consuming process. The preparation and finalization
takes a lot of the time. During the periods, the organization conditions may change and
estimates may go wrong by that time.
D. Budgeting is not an authorized process;
Continues effort are necessary on the part of the officials responsible for the execution
budget. The successful operation and execution n of budget depend up on the
efficiency of the executive personal. They may vary in their efficiency. Moreover,
there may be tendency on the part of the executives concerned to show off and try to
pass on their mistake to other. Interdepartmental rivalries in getting a large share of
budgetary allocation often create special problems.
E. Rigidity in control;
The budgetary control system tends to bring about rigidity in control; it based on
quantitative data. On the other hand, organization conditions are dynamic which
require adjustment to change circumstance (L. Mathura, 1996; 20)
F. Delay of budget;
Most of the time in our country budget is released at the middle and at the end of the
second quarter of the year. Until the requested budget is approved and released, the
office entitled to use of the last authorized budget. When it approved and released it
may not equal to that of the last year. This create difference problems on work plane
and finally it will be exposed for misuse.
G. Budgeting is not a substitute of management;
Budgeting is essentials a tool of decision making and it helps the management in
taking sound decision. However, it cannot replace the management. The efficiency and
utility of budgetary system depends on the skill and experience of management. If used
cautiously, it can aid management in caring but decision.

24
2.12. BUDGETARY CONTROL TECHNIQUES
Budgetary control is a technique of managerial control through budget. “the term budgetary
control applies to system of management and accounting control by which all operations and
output are forecasted as far as possible and the actual results, when known, ,are compared with
the budget estimates.” Thus the tem budgetary control in designed to evaluate the performance in
terms of goals budgeted through budget reports. Budgetary control is categorized in to legislative
control and administrative control

2,12,1 LEGISLATIVE CONTROLE

It is through the parliamentary process of appropriating the amount of expenditure and the areas
or purpose of expenditure and approving the sources and levels of revenue through hearing
report of the auditor general and prescribing corrective action

2.12.2 ADMINISTRATIVE CONTROLE

Such a control comprises the plane of organization that are concerned mainly with operational
efficiency. It may include controls; such as time and motion studies quality controls through
inspection, performance report and statistical analysis. Administrative control has the following
aspects;

2.11.2.1the most government money does not flow automatically for agencies after legislative
approver appropriations the central budget office for at least three reasons allocate it monthly,
quarterly, or at other intervals.

 To avoid premature exhaustion of appropriation, necessary supplementary

appropriations.
 To keep the rate of expenditure in line with flow of revenue and
 To provide the fund agencies actually need in the course of budget implementation.
( Axelrod

2.12.2.1 CONTROL THROUGH ACCONTING PROCESS

The accounting system control actual expenditure from appropriations to allotment. Most
proposed expenditure must run through the accounting system to make certain that it complied
with the term of appropriation bill, the allotment and the financial law of the government. The
accounting and financial control includes control accounts bank reconciliation, self-balancing
ledger and internal auditing etc… such control ensures accuracy and reliable of financial records
adherence to prescribed managerial polices and state custody over asset.

2.12.2.3 CONTROL THROUGH AUDIT

25
Auditing is an examination of records facilities, system and other evidences to discover or verify
desired information. Auditing is of different types that are internal versus external and pre-
auditing versus post-auditing.

 Internal audit are those performed by professional employed by the organization being
audited.
 External audit are performed by outside professional independent from the organization
being audited.
 Pre auditing is an advance verification of legality of transactions before resources are
commuted on their completion.
 Post auditing is an examination of records and activities after they have already been
completed

Advantage of auditing

The following are the advantages of auditing;

 Audit account are more readily accepted as correct and authentic record of the
transaction.
 Error and Freud are detected on time
 Comparison can be made between the accounts of the current year and other year.
 As an appraisal function, audit previous the extent and operations of various controls in
the organizations and point out the weakness and adequacy in them.

2.12.2.3 INTERNAL CONTROL

It is a means of assisting modern organizations management in discharging its function. Internal
control is defined as the method procedure with in the agencies established to safeguarded asset,
check the accuracy and liability of financial and other data. Promote operational efficiency and
encourage adherence to the prescribed policies and procedures of the agency.

Objective of internal control are the following;

 To eliminate the act of Fraud and error

 To prevent the misappropriation of cash or goods
 To exercise more pressure over the staff members.
 To detect fraud or an error prompt.
 To ensure that the accounting system produces reliable information.

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CHAPTER THREE

RESEARCH METHODOLOGY
3.1. STUDY AREA
The study was conducted on ASSESSMENT OF BUDGET PREPARATION, ALLOCATION AND
UTILIZATION IN CASE OF WOLKITE TOWN OFFICE OF FINANCE AND ECONOMIC
DEVELOPMENT (BOFED) which is found in SNNPR of Ethiopia at distance of 158 km away
from the center Addis Ababa.

3.2. DATA GATHERING TOOLS

To collect the necessary data the researcher was used both primary and secondary sources of
data. The primary data was included questionnaire, direct observation and interview.
The researcher was used primary source of data collection method through questionnaire and by
conducting interview.
A questionnaire possessing a number of questions with close ended type of question that are
relevant and exhaustive as to the subject of the study was designed in such a way that the
respondent feel easily, on the hand to get detail information about the factors affecting budgetary
process. Interview was used for selected managers of finance and economic development of the
general manager of the organization.
Finally the research was used secondary source of data collection method which are obtained
through review & selected materials such as related reports and balanced transaction budget
expenditure manuals of the year (2006 – 2008) budget. But such materials are not disclosed for
any external body as reference.

3.3. SAMPLING TECHNIQUES & SAMPLE SIZE

The sample selection will be carried out by a research so that it is reliable as to the representation
of the total population who are believed to be workers of the organization. The research therefore
will focus on specific target group by using random sampling technique to acquire the necessary
information from respondents and to make clear investigation for current study. Taking this in to
account on factors it is found necessary to use personal judgment since it is difficult to determine

27
how large the population is so that sample size has been used from three departments based on
their quota 9 people will be selected from finance department 6 people from economic
department and from budget planning department 4 people will be selected.

3.4. DATA PROCESSING, ANALYSIS AND INTERPRETATION

While conducting the study different types of data was collected, so that the intended outcome is
obtained. To analyze and interpret the collected data tabulation and percentage method was used.
Tabulation was used among data in a table or other summary format to facilitate the process of
comparison of various data analysis that was made by the help of descriptive data analysis.

28
CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION

In this chapter data collected through questionnaire distributed to respondents and interview
made with some authorized personnel of the organization and personal observation were
analyzed and discussed. And also information obtained from secondary sources such as reports
and related forms action have been analyzed and described.

4.1. Results of Questionnaires

A total number of 19 copies of questionnaires were distributed to workers of Gurage zone
Bureau of fiancé and economic development (BOFED). The questionnaire were distributed to
three department namely. Finance department 9 copies. 6 copies to economic and budget
department, and 4 copies to revenue and cost budget department. The data obtained through
questionnaires were tabulated, analyzed and interpreted by using table and percentages given
below.
Table 4.1: Description of respondents are sex and educational level.
No Items Respondents
Number Percentage
1 Age
(25 – 35 ) 11 57.89%
(36 – 45) 5 26.3%
Above 45 3 15.78%
Total 19 100%
2 Sex
Male 14 73.68%
Female 5 26.32%
Total 19 100%
3 Educational level
MA and above 0
Degree 10 63
Diploma 4 25
Grade 12 complete 2 12%

Total 16 100%
As can be clearly so on in the table (4.1) above on questionnaire indicated that out of 19
respondents. 11(57.89%) of the respondents were placed in the age (25 – 35) of 5(26.3%) of the
respondents were placed in the range of 35 – 45 years and 3(15.78%) of the respondent were
place in the age of above 45 years.
From this easy the above data) we can refer that half of the workers i.e. above 11(57.89%) were
found between the age of 25 – 35 years. And the rest 11 (57.89) of the workers were placed in
the range of 35 – 45 years and above. With regards to the sex of the workers question no 2 (two)

29
above. The data indicated that the majority i.e. 14(73.67%) of the respondents were male and
5(26.3%) of respondents were female. From this analysis we can understand that the numbers of
male workers were greater than number of female workers by more than half of the organization
work were performed by male workers.
When we can see the educational level of employees. The data obtained from above table,
10(63%) of respondents were degree holder 4(25%) of respondent were diploma holder and
grade 12 completed respondents were 2(12%) in number and there were no respondents having
or holding masters, degree and above from this we can understand that the majority of the
workers are degree holders and some of the workers are diploma holder and grade 12 completed.

Table 4.2 Assessment of participation of employees in budgeting planning and controlling process
No Items Respondents
Number Percentage
1 Do you participate in budget planning and utilization
controlling
Yes 14 73.68%
No 5 26.32
Total 19 100%
2 If your response for question No # 1 above is yes in which
types 5 35.71%
Administrative 4 28.57%
Project/capital 5 35.71%
Planning and controlling 0
No responded
Total 14
3 If you answer for question # 1 above is no what your reason
is? 2 40%
It is not your responsibility 2 40%
Only special workers participate 1 20%
because of random selection 0
other
Total 5 100%
Table 4.2 above clearly indicated that for question # 1 14(73.65%) of respondent replied that
they have participated in budget planning, controlling and utilization of the organization on other
hand 5(26.32%) of respondents indicated that do not participate in budgeting process/activity.

In the same table above for question #2 type budget they participate 5(35.7%) of respondent
replied that they are participating the preparation budget for administration function 4(28.57) of
respondent replied that they prepare project/capital budget under taken in the organization and
5(35.71%) of the respondent sold that they have participated in the preparation of general budget
and controlling function.

From this one can understand that organization budgeting activity was mainly concerned in the
preparation of budget plan and administration of its implementation with process.

30
Administration budget refers to the functional classification of budget covers expenditure for the
following service like executive, legislation judicial functional and physical affairs and public
orders. Project or capital budget are budget related to different activities that have a specified
objectives for the achievement of certain goals.

For question #3 in the same table above employees that do not participate in the budget planning,
controlling and utilization because 2(40) of the respondents reveled that it is not their
responsibility and 2(40%) of the respondent said that budgeting activity was given for only
special workers were of the respondent that means 1(20%) of the them said that because for
random selection.

Table 4.3: The types of budget controlling mechanism used by the Bureau
No Items Respondent
Number Percentage
4 Which type of budget control mechanism is practicable in your
organization
preliminary (preventive control 4 21%
concurrent (in the process control) 9 48%
feedback (After process control) 6 31%
other control 0 0
Total 19 100%

As clearly should in table 4.3 above concerning budget control system. 4(21%) of the
respondents revealed that preliminary (preventive) control as its name indicated that budget
control mechanism were taken. Before implementation takes place and it anticipate and prevent
mistakes by considering future possibility of undesirable outcome. 9(48%) of the respondent
replied that concurrent (in process control mechanism is desirable.
From this we can understand that more than half of the organization budget control mechanism
was concurrent control mechanism on an organization also use the rest system as needed.
The rest is 6(31%) of the respondent said that the feedback (after process control is favorable to
the organization. The purpose of feedback control mechanism is to measure and asses a process
or operation. When it is finished and to prevent any future deviation related to the organization
activity.
Table 4.4: Whether the organization prepare budget utilization report or not.
No Items Respondents
Number Percentage
5 Does your organization prepare budget utilization report
Yes 18 94.73%
No 1 5.27%
Total 19 100%
6 If your answer for question #5 above is yes at what time
interval? 1.2 11.1%
Monthly 8 44.4%
Quarterly 6 33.3%
Semi annually 2 11.2%

31
 Annually
Total 18 100%

Table 4.4: Above mainly concerned with the preparation of budget utilization report and internal
that the organization report its performance.
As shown clearly in above table for question #5 18 (94.73%) of the respondents responded that
organization prepare budget utilization report that compares actual with plan and objectives.
Budget performance report provides management with feedback operation.
In the same table 4.4: question 6, 2(13%) of the respondents said that performance report is
prepared on monthly basis 8(44.4) of the respondents answered that utilization report is prepared
on quarterly basis 1.0 is four time in the 6 (33.3% of respondent replied that budget utilization
report is prepared on semiannual basis.
From this table with given evaluable data obtained from respondents we have understand the
organization prepare budge utilization report mostly at quarterly and semiannual basis.

Table 4.5: whether or not underutilization or overutilization of budget exist in the organization
Items Respondents
Number Percentage
7 While your organization prepare budget utilization report is
there is any over or under utilization
Yes 18 94.73%
No 1 5.27%
Total 19 100%
8 If the response for question #7 above is yes what do you thing
the course for that problem?
Lack of skilled manpower 8 44.4%
Lack of proper control 6 33.3%
Lack job training 3 16.7%
Other 1 5.5%
Total 18 100%

As shown in table 4.5 above for question 7 regarding to whether the organization force under or
over utilization of it budget 18 (94% of respondent said that organization face either under or
over utilization for many times. i.e. the organization do not use its budget efficiently and
effectively that most of the time either it utilized less than what should be allocated at certain
period on the other hand 1(5.5) of respondents indicated that there was under or over utilization
of budget in the organization.
From this we can understand that there was some efficient utilization of budget. It was revealed
by some of the respondents were high budget under or over utilization in the organization
because of different problems.
In the same table 4.5 for question #8 above the respondent were asked to give some of their
response for under and over utilization of budget in the organization and they responded as
follows.

32
According 8(44.4%) of respondent said that the organization do not utilize its budget because of
lack of well trained personnel. 6(33.3%) of the respondent stipulated that the case for under over
utilization of budget was lock proper management 3(16.7%) the respondents reveled that there
was lock job training problem of workers the remaining is 1(5.5%) that respondent indicate that
the organization do not use its budget sustainable ways due to different reasons. Such as using
under policies and procedures not evaluating activities on regular time etc. from the above
analysis we understand over utilization and underutilization of the organization are due to lack of
skilled manpower, lock tamper control and lock of well training of the workers in the
organization.

Table 4.6 major problem faced by the organization with regard to budget preparation controlling
and utilization and the solution to tackle the problem
No Items Respondent
Number Percentage
9 What problem do you observe with budget preparation control and
utilization in your organization?
Lack of feeling responsibility 1 6.25%
Lack for regular time 3 15.79%
Training workers - -
Shortage of budget 8 42.1
Lack of proper managements 7 36.84
Total 19 100%
10 What do you think should be done to solve these problem in question
of above?
Training employees as possible 5 31.25%
Evaluate activities on regular time 7 43.75%
Using clear policy procedure
Hiring experienced employees 2 12.5%
Other 2 12.5%
Total 16 100%

As shown in table 4.6 above for question #9 concerning problems observed with budget process.
1(6.25% of the respondents replied that there were lack of feeling responsibility in their duties.
3(15.79) of the respondents said that lack of regular training for employees on regular basis was
none of the problem that they observed 5(42.1) of the respondents respond that shortage of
budget was one of the serious problem that observed in budgeting process of (36.84) of the
respondents responded that lock of proper control or management was also another problem that
they observed is budget control procedure and its utilization in the organization.

From the above table we can understand that from the total respondents 3(15.79) to of the
respondents indicated that the organizational manager allocated budget to view financial
departments from this point of view first the budget is allocated by higher professional workers

33
of the different part of government office allocated by higher professional workers of the
different parts of government office sector. From this we can conclude that to solve the problem
related to budget preparation control and utilization the organization should attempt to allocate
activities on regular time give training program to the worker and to her related ways.

On the same table (4.6) for question #10 the solution to the above problems. 5(31.25%) of the
respondents revealed that training employee as much as possible concerning budgeting process
could be the solution to tackle the problem. 7(43.73%) of respondents replied that evaluating
activities on regular time i.e. measuring the performance of activities to be done regularly before
actual implementation is one of the important way to solve the problem. 2(12.5%) of respondents
respond that to tackle the problem observed above the organization should use clear policy and
procedure as well hired experienced employees.

Table 4.7: Assessment of respondents’ response on budgetary allocation

No Items Respondents
Number Percentag
e
11 Budgetary allocation is mostly allocated by?
The organizational manager 3 15.79%
Higher professional workers 13 68.42
The fiancé department 3 15.70%
Other 0 0
Total 19 100%

From the above table we can understand that from the total respondents 3(15.75%) of the
respondent indicated that the organizational manager allocated budget to various financial
departments from this point of view first the budget is allocated by higher professional workers
to different part of government office sectors. The most widely budgetary allocation assigned by
higher professional workers i.e. from the total respondent 13(68.42%) of response budgetary
allocation mostly allocated by higher periodical performance and the rest 3(15.7%) of
respondents said that budget is allocated by the fiancé department.
From the above analysis of budget allocation we can conclude that budget is mostly allocated by
higher professional workers allocate the budget. Both the organizational manager and the
finance department allocated the budget to their respective departments.

Table 4.8: Assessment of Budget utilization of the organization

No Respondents
Number Percentage
12 In what why budget must be utilized in the organization
By recording found available and expense 7 36.84%
Budget planned according 12 63.16%
Other way 0 0%
Total 19 100%

34
From the above table we can understand that respondents response from the total 7(36.84%) of
them indicated that budget utilization could be performed by recording revenue and expense
accordingly without recording of revenue and expense budget is not utilized within the
organization to utilize budget within the fiancé could be accomplished. First record revenue and
expense in general ledger account and subsidiary ledger account.
On the other hand 12 (63.16%) of the respondents said that budget utilization is accomplished
when budget planned accordingly and appropriately distributed within the organization from
their data we can conclude that for an organization to utilize its budget first record every
available revenue and expense and adopt a good planned budget for every department
accordingly.
Table 4.9: The budgeting process undertaken by the organization
No Items Respondents
Number Percentage
13 Which are budgeting processor undertaken in your organization?
Budget planning and formulation 9 47.37%
Legislative enactment 1 5.26%
Budget execution 7 36.84%
Budget evaluation 2 10.53%
Total 19 100%
14 If you response for question #13 above is budget planning and
formulation process what it follow
Recurrent budget planning and formulation 2 28.57%
Capital budget planning formulation 2 28.57%
Both 3 42.86^
Total 7 100%
15 If your answer for question #13 above is budget execution what
are different stage that should be followed
Budget disbursement procedure 0 0
Budget payment and control 2 33%
Reporting procedure 1 17%
Expenditure authorization 2 33%
Auditing procedure 1 17%
Total 6 100
As it has been indicated in table (4.9) above for question #13 concerning the budgeting process
undertaken. 9(47.37%) of respondents said that budgeting process undertaken include budget
planning and formulation. Budget planning and formulation starts with capital budget calls being
issued by bureau of planning and economic development and sector bureau head in beginning of
January and followed beginning to February by recurrent budget call issued by the regional
fiancé bureau to each sector bureau head.
In the same table 1(5.26%) of the respondents replied that the budgeting process also include the
legislative enactment. The legislative enactment focused on after receiving consolidation of
recurrent and capital budget from the regional fiancé Bureau. The regional council is responsible
for the approval of budget estimated lastly the approved budget is distributed among the sub –
regional administrative units.

35
And also 7 (36.84%) of the respondents responded that the budgeting process taken in the fiancé
bureau involves budget execution under budget execution. The regional and sub-regional distrait
unit has autonomy over the execution of its capital and recurrent budget applications but this
power is strongly delimited by well-defined rule. Finally for question #13 of the above table
(4.9) indicators 2(10.53%) of the respondents said that budget evaluation is one of the budgeting
process that is under token in the organization formal budget evolution is performed on quarterly
basis so as to maximize the use of available resource.
In table 4.9 above for question of 14 above 2 (28.75%) of the respondents responded that the
process of budget planning and formulation follows recurrent budget planning and formulation.
And 2(28.57%) of the respondents said that the process contains of follows capital budget
planning and formulation. The rest 3(42.86%) forth respondents responded that in the budget
process there were both recurrent and capital planning and formulation.
From the analysis we can understand that for organizational budget process recurrent and capital
budget planning and formulation were taken place for accomplishment of the organization
objective for a given period of time.
Recurrent budget and formulation each work sector officer role in budget preparation is to
respond to the budget call by providing all required information to prepare the recurrent cost
/budget call by providing all required information to prepare the recurrent cost/budget estimates
i.e. staffing member operational and maintenance activities or year as included in the sector
action process. The words council provider substantial inputs since it is possible responsible
through its executives committee member for tax collection carried out by the sector but it
cannot advise or approve the recurrent budget estimates.
At zonal level each sector department collect and consolidates the revenue estimator and
information for the preparation of recurrent expenditure submitted by each woreda center parts
sectors offices in the zone.

Capital budget planning and formulation of the regional subsidy and the donor financing pledged
or contributions are announced the BOFED estimates the capital budget requirement have been
satisfied.

For question #15 of the above table (4.9) concerning the budget execution 2(33%) of the
respondents equally said that the stages that the budget execution follows are budget and
payment control procedure and expenditure authorization procedure each respectively. On the
some question #15 1(17%) of the respondents disclosed that each of reporting and auditing
procedure were under taken to in budget execution process.
From the data obtained we can conclude that for the organization under taken its budgeting
process which possess different stage to achieve its activities and to show the actual works
performed by the organization regarding the activities of the organization budget disbursement
procedure budget and payment control.
Expenditure authorization, auditing and reporting procedure were under taken enforcement of the
management.
36
Budget and payment control procedure. The use of budgetary resource have a number of
controlling method were followed federal regulation and apply both the process requiring pre –
auditing before disbursement and to the payment process. Expenditure are viewed before
disbursement against budget appropriation by each fiancé units concerning payment the fiancé
units control expenditure justification documents before issuing capital payments documentary
evidence quests to transfer (journal receipts vouchers good receiving notes purchase order sets0
are sets to the fiancé department for further control.

Auditing: In addition to detailed internal control systems. Internal and external auditing is under
taken at each administrative layers. Each fiancé office has a qualified internal auditing is
undertaken and closed the book at year and. If any problem are recognized during the auditing at
onto is transmitted to regional council for adoption.
Reporting Procedures: one quarterly or semi – annual basis the internal auditors or some called
inspector of the fiancé units check the bank the ledger. The bank account the recurrent budget
and from the recurrent to the capital budget. External auditing: at the regional level the regional
audit bureau is responsible for auditing all government institutions government budgets
including donor funding it reports directly to the regional council and it is not accountable to the
auditors general at federal level. If the audits discover any criminal conduct. A report directly
made to the justice and appropriate action will be taken.

Table 4.10 suggestions / recommendation on the overall budget control and utilization.
No Respondents
Number Percentage
16 What do you think is your suggestion on the overall budget
control procedures and utilization of your organization?
The organization should follow proper policy and procedures 9 47.37
concerning budget control and utilization
The organization should have proper formulation of budget 3 15.79
process and policies?
The organization should give regular training for worker 6 31.57
regarding to budget control utilization
1 5.26
Others
Total 19 100%

As clearly shown in the above table (4.10) concerning the suggestions on the overall budget
control and utilization in the organizations on the overall budget control and utilization in the
organizations 9(47.37) of the respondents suggested or recommended that the organization
should follow proper policy and procedure concerning budget controlling and utilization
3(15.79) of the respondents recommended that the organization should have proper formulation
of budget and polices to control and utilize the available budget and to meet or achieve the
descried goals.

37
 And 6 (31.57%) of the respondents recommended that the organization should provide or set a
training program for workers that are mainly assigned to perform the budgeting process. This
training program for workers will be used as a tool for controlling and utilizing the organizations
budget. The rest (5.26) of the respondents said that to control and utilize the organizations budget
it should we other related ways or techniques.
4.2. Results of Interview and Observation
The interview was conducted with different authorized workers of the organization like
managers of the organization economic development head and planner of the Bureau and the
observation was made in different activities. Regarding the budget plan policy review
preparations of budget (source and produce and controlling system.
Regarding the budget cycle according to the response obtained from the budget head the budge t
has its own cycle. These are:
Budget Call; it is responsibility of Bureau of finance and economic development (BOFED) these
cycles involves strategy plan performance (physical financial and development program for the
zone. This all are the zonal sector and that heads to development direction based on parceling
amount of budget.
Per – ceiling means forecasting or producing the amount of budget require for future. The actual
calling is the exact amount at hand when budget is allocated to activities. And the difference
between the pre-ceiling and actual was adjusted after the zone and woreda budget were
computed it submit to BOFED by their sector has help the sector for
- Plan evaluation of physical and financial performance of the sector
- Plan for coming year.
The budget recommended the regional level makes budget appropriation. The feedback (report
is made to the BOFED and the sector that facilitate the management control system. These
control system were:
- Timely evaluation of the field, or physical and document repots
- Auditing internal and/or external
Source fiancé: the source of fiancé forth organization is treasury for recurrent budget and
assistance and capital budget and revenue collected from taxes etc. the assistance and loan are
obtained from the regional government to perform its activities.

Evaluation Review: review regarding the evaluation review it depend on the type of the project
which means long term project need long term internal review for evaluation while short term
project require short – term internal review for evaluation. At sectorial level the performance is
on the monthly basis and at regional level with combined on the quarterly basis. But at regional
level with house of people representative on semiannual basis from august February)
In addition to review evaluation process there are two types of auditing activities for the purpose
of controlling the available resources and to taka some connective action if there were deviation
on the performance of budgeting activity.

38
These auditing types are internal by internal auditor at timely and external by BOFED or audit
commission at yearly.

Table 4.11 variance analysis on adjusted budget and current year expenditure of BOFED
report. 2006 – 2008 in birr)
2006 2007 2008

Co Descripti Adjust Current Varian Adjust Current Varia Adjust Current varia
de on ed year ce ed year nce ed year nce
budget expendi budget expendit budget expend
tures ure iture
10 Administ 631295 568499 63129 76552 666004 99517 84857 755233 9334
0 rative and 66.2 09 57 209 22 87 679 34 345
general
service
20 Economi 505036 414129 90906 61830 531743 86562 69143 636118 5531
0 c service 53 95 58 630 42 88 294 30 464

30 Social 113632 943155 19317 12660 119009 75963 13200 126720 5280
0 service 19 50 669 5576 241.4 35 7834 801 033

40 Other 252518 156561 95956 29443 315726 (2129 28285 248915 3394
0 service 20.5 32.4 94.1 157 2.3 466) 893 86 307

Source: Total Budget Vs. expenditure by budgetary institution of Gurage zone Bureau of fiancé and
economic Development reports.
As clearly described in table above (4.11) the performance reports of the budgetary institution of
the Bureau of finance and economic development of Gurage zone for the fiscal year from (2006
– 2008) was written in the organizational document in detail description forms. However for our
purpose have taken the general expenditure area. The first point to notice some item of the
adjusted budget have variance. Some have brackets around them and other do have some of the
budget which have bracket one budget estimated or budget adjusted is less than the current year
expenditure of the year or actual performance of the year.

From this the Bureau of finance and economic development the budget that we are going to
analyze in the budget for the year 2006 – 2007 and 2008/ for the purpose of simplicity the
BOFED budget adjusted in the year are classified as administrative and general service.
Economic service social service and other seen this sequential years.
39
So the budget adjusted for the bureau in 2006 for administrative and general service birr
631295662.2 economic service birr 50503653 social services birr 113633219 and that of other
service birr 252518266.5. The actual performance of the current year expenditure for each
service are birr 65916609.41412995, 94315550 and 15656132.4 for administrative and general
service, economic service, social service and other service respectively. The percentage they
actually performed or the budget that actually expensed are 59% in administrative and general
service 82% in economic service, 83% in social service and 62% in other service.

However the variance of the adjusted budget and the current year expenditure or the actual
expenditure of the current years are 6312957 (11%) in the administration and general service and
9090658 (18%) in economic services 1931769 (17%) in social service and 9595694 (38%) in
other are not used in the year 2006 from the adjusted budget.

From the above table (4.11) we can see that for the year 2007 the budget adjusted for
administration and general service was birr 76552209 and the actual current year expenditures
were birr 6600422 and the rest 9951787 birr was the variance for the year. From this 87% of the
adjusted budget of the adjusted budget is actually performed where as 13% of it was not used in
the current year in administration and general service.

The BOFED adjusted budget for economic services further fiscal year 2007 above was 61830630
birr. Among this the current year budget used was birr 53174342 which is 86% and about 14%
(8656.285 was the variance for the year in economic service. in the year 2007 the adjusted
budget is actually performed where as 13% of it was not used in the current year in
administration and general service.

The BOFED adjusted budget for economic services father fiscal year 2007 above was 61830630
birr. Among this the current year budget used was birr 53174342 which is 86% and about 14%
(8656.785 was the variance for the year in economic service. in the year 2007 the adjusted
budget for social service was 126605976 Birr from this amount above 94% 9birr 119009241) is
actually performed and 6% 9birr 7596.335) of it was not used correctly budget in 2007 for other
service was about birr 29,443,175 birr. Among this the actual performance is birr (2129466) was
expended as over utilization of the adjusted budget. In percent the actual performance 107% and
that of the over utilize 11 – 07% in other service for the year.

For the year 2008 the adjusted budget for administration and general service is birr 84.857679.
For economic service birr 69143294 for the social service birr 132, 00834 and other services
amount birr 28.285893. the actual performance for each service was birr 75,523334 (89%) in
administration and general service birr 6361 11830 992%) in economic services 12672080 (96%)
in social service and 24,891586 (88%) in other service the respective variance which is not used

40
in the current year from each services was birr 9334345 birr 5531 & 64 for 5280033 and birr
3394307 in general economic, social and other service respectively.

Generally we can understand from the above manual report we can under food that BOFED of
Gurage zone faces the problem of variance over or under utilization of the adjusted budget from
different public service they were performed in particular year. Even if there were no 100%
efficient of the budget the result indicated that BOFED to reaction for its weakness and identify
the causes of the problem of over underutilization of budget and given appropriate solution to the
problem to minimize the percentage of variance for the activity they performed for the current
year.

41
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1. SUMMARY AND CONCLUSION
The main objective of data which are collected from the primary and secondary source were
analyzed and discussed by using percentage and descriptive statements. The data were collected
from respondents and information obtained from secondary source of in the general manager
bureau. The study has come up with following findings, and conclusions presented sub heading,
which are target area of the study.

To summarize the employees data, age, sex, and educational level almost half of the worker
placed between those ranges from 25 – 35. Regarding to the sex the majority of the workers from
the total employees of the organization were male. This indicates the proportion female workers
in the organization is small. Concerning the educational level the majority of the worker were
degree holders. But no one who have MA degree.
 From this we can understand that organization have lack of well qualified professional
workers.
 Organization budget is not utilized and controlled correctly
 As budget is long process work starting from preparation to implementation and
utilization. Most of the workers have participated in the budgeting process. This indicate
that the worker who participate in the budget process they must be well qualified and
well trained workers.
 The organization has loading on responsibility of employees and shortage of employees
who perform activities different sector under the organization may not report their report
and evidence on time.
 The organization does not allocate the budget on time to each sector due to manpower
problem and adequate procedures and policies the organization that follows.
 The organization quarterly budget report is not correct because there were under and over
utilization of budget. The courses for this under over utilization lack of skilled
manpower, lack of proper control and lack of job training for workers.
 With regard to the problems observed at budget preparation controlling and utilization
many problems were stated that hinder the organization to prepare budget properly and
utilize efficiently and effectively. Among these problems lack of feeling proper
management shortage of budget and lack of regular training for workers were the major
problems.
 The solution to protect or avoid the problem observed in budget planning control and
utilization training employees as much as possible evaluate activities on regular time
using clear policy and procedures and hiring experienced employees were suggested
tackle the problem.
42
  The organizations actual performance and the overall activities was audited by internal
auditor on the monthly and quarterly basis and eternal auditor at year ended. This the
organization budget evaluation was undertake on for the purpose of controlling the
available resources and to take some corrective action if there were deviation on the
performance of budgeting activity.

5.2. GENERAL RECOMMENDATIONS AND SUGGESTIONS

Based on the major findings of the study and the conclusion made earlier. The researcher would
like to forward the following recommendations that help the organization to change the existing
situation that affect the budgeting system and to improve the order all performance of the
organization.
 The organization should hire well experienced workers in order to achieve the
organization goals and objective to have effective and efficiency utilization of budget.
 The organization should provide the opportunity to professional employees to participate
in budget planning process and assign authority and responsibility for good preparation of
budget plan and utilization. Active participation of employees on their specific job loads
to proper implementation of the organization, goals.
 The organization must inform to sector offices submit the reports on time through formal
communication of channels of governmental organization.
 The organization should adopt sound budget controlling mechanism in order to avoid the
problem of under or over utilization of budget this could be done by using accounting
system (i.e. record the found available and expense incurred, and transferred the amount
from subsidiary ledger to the general ledger account balance.
 The finance department should use appropriate allocation of budget and control its
implementation by adopting good co – ordination system with departmental manager.
 Even the organization force problems as much as possible to avoid some problems and
narrows the gap between the society requirement and what the organization allocate the
budget to them (to the society).

43
REFERENCES

Wilson kattlur hay. 2006), Accounting for governmental and non for profit
entities, McGraw Hill, twelve Edition, 2006.
Mohad. Arif Pasha, Allah Bakash.s(2007) Cost accounting.
John F. Due,Annf, Frielaender(2006). Government finance.
Anderson/Need les/Caldwell(1989), managerial accounting.
Anthony R. and Govindarajan V.(2004 &1998): management control system,
Eleventh edition. McGraw Hill.
Tenner and Lynn, municipal and government accounting. Fourth edition.,
Thomas E.(1978), Cost accounting; budgeting and control. South western
publishing, Cincinnati.
Lynn S.E and Freeman J.R.(1982), Fund accounting and theory and practice,
second edition., prentice, Hall Inc, Newberys.
William E. Thomas,(1978) Reading in cost accounting budgeting and control,
fifth Edition.
Meyers, Roy T.(1996), is there a key to the normative budgeting Lock, the world
book, Washington, D.C.

44
 APPENDIX
WOLKITE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING
QUESTIONNAIRE
I, Marta Alemu is Wolkite University’s student who is making a research on ASSESSMENT OF
BUDGET PREPARATION, ALLOCATION AND UTILIZATION IN CASE OF WOLKITE TOWN
FINANCE ADMISTRATION. For this reason your contribution by filling this questioners to the
researcher is greatly appreciated and responses on confidential and the respondent is not required to write
his/her name. Thus the student kindly request any respondents to fill and return this questionnaire
honestly simply by ticking ( ) as many reasons as apply or by giving short answers of a case may be.

Thank You!
Age __________________
Sex Male Female
Education Degree Diploma TTI Grade 12 complete
MA and Above
1. Do you participate in budget planning or controlling process?
Yes No
2. If your answer for Question # 1 above is “yes” in which area?
Administrative Capital
Plan and control No responses
3. If your answer for question # 1 above is “No” in which type?
It is not your responsibility
Only special worker participate
Other
4. Which budget control system mechanism is or are practicable in your organization?
Preliminary (preventive) control
Feedback (after process) control
Concurrent (in the process)
Control
5. Does your organization prepare budget utilization report?
Yes No
6. If your answer for question # 5 above is “yes” at what time interval
Monthly Quarterly
Semi – annually annually
7. Which your organization prepare budget utilization report is there any over or underutilized?
Yes No
8. If your response for question # 7 above is “yes” what do you think about the cause for the problem?
Lack of skill manpower
Lack of job training
Lack of proper control
Other
9. What problem do you observe with budget preparation control and utilization in your organization?

45
 Lack of feeling responsibility
Lack of regular training for the workers
Lack of proper management
Shortage of budget
10. What do you think should be done to solve these problem in question # 9
Training employees as possible
Hiring experienced evaluating activities
On regular time
Using clear policy and procedures
11. Budgetary allocation is mostly allocated by?
The organization manager
High periodical performance
The finance department
Other
12. In what way budget must be utilized in the organization?
By recording fund available and expense
Budget planned accordingly
Other way (specify)
13. What are the budgeting process under token in your particular reorganization?
Budget planning and formulation process
Legislative enactment
Budget execution
Budget evaluation
14. If your response for question # 13 above is budget planning formation process if follow?
Recurrent budget planning and formulation
Capital budget planning and formulation
Both
15. If your answer for Question # 13 above is budge execution what the different stages that if follows?
Budget disbursement procedure
Budget and payment control procedure
Reporting procedure
Expenditure authorization
Auditing procedure

46