CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND TO THE STUDY The word ‘budget’ originated from a French word bougette meaning little bag. In Britain, the word was used to describe the leather bag in which the chancellor of the ex-changer used to carry to the parliament the statement of government needs and sources as described by. After several thoughts of consensus, the budget became the document contained in the bags which represent plans of government expressed in money and submitted to legislatives for approval. Government use budgets as a guiding tool for planning and control of its resources, be it financial or otherwise. The use of budget involves knowing how much money you earn and spend over a period, particularly one year. When a budget of an establishment, department or ministry is created, it means creating a plan for spending and saving money. The process of preparing budget requires a call circular to the various departments, establishments, ministry or representatives who are expected to participate in the budget discussion as well as serve as budget committees. The person who heads the budget committee is known as the budget director. The budget director heads the budget committee and receives departmental or organizational submissions for onward transmission to the chairman for authentication and verification. On receipt of the budget submission, the chairman is expected to go through the documents, make any necessary adjustment, corrections, modifications, additions based on the mission or corporate objectives, and then forward it to the legislative arm of the council as a bill document. The legislative council reads the budget document carefully, discuss every aspect of it, make any amendment if any and send it to the Executive for his consent and authentication. Once the executive sign the document, it becomes a legal document to use for spending and control of money at any tier of government. It should be noted that any department, establishment or ministry has a vote on which funds can be drawn, thus budget not only serves as an instrument of revenue/expenditure estimation but also as a catalyst for mitigating corruption in the use of public resources for the good of the state. Nigeria is now ranked as one of the most corrupt nations of the world and aspiring to be among the top 20th economies of the world by the year 2020 but she is yet to adopt Balanced Scorecard in her budgeting processes and implementations. A balanced scorecard budget perspective aligns budget strategy with objectives and incorporates performance measures at the time of setting out the budget. Key indicator of performance and growth is the embedment of budget discipline at all the tiers of government, thus money spent must be justified and satisfied by all the established budgetary and budget monitoring organs and this is the locus of Balanced Scorecard perceptive of Public Sector Budget. The aim of this paper is to evaluate budget in the public sector from balanced scorecard perspectives. Towards this purpose, the specific objectives of the study are to investigate how budget performance differs from state to state in Nigeria and to carry out a correlation appraisal surveyed States and responses obtained on budget performances of the selected states in Nigeria from years 2000 to 2010. 1.2 STATEMENT OF RESEARCH PROBLEM The researcher will like this research to tackle the following problems. - To determine whether planning and budgeting has an effect on the performance of the Nigeria public sector. - To find out the roles of effective planning and budgeting in performance of Nigeria public sector. - To know the relevance between planning and budgeting, and the Nigeria public sector. - To know how planning and budgeting has contributed to performance of Nigeria public sector. - To find out how important is planning and budgeting in the performance of Nigeria public sector. 1.3 OBJECTIVES OF THE STUDY Nwaorgu (1991) says objective of the study contain major things the researcher intends to do towards providing solution to the problem identified in the statement of the problem. The objectives of this study are as follows: - To find out the effect of planning and budgeting in the performance of Nigeria public sector - To enumerate the roles of effective planning and budgeting in performance of Nigeria public sector. - To know the relationship between planning and budgeting in performance of Nigeria public sector. - To enumerate the ways which planning and budgeting in the performance of Nigeria public sector. - To know the importance of planning and budgeting in performance of Nigeria public sector. 1.4 SIGNIFICANCE OF THE STUDY Chukwuemeka (2002), contributed that the significance of the study contains the benefits or values of the study contains the benefits, or values of the various groups that would come into contact with it. This research will reveal whether planning and budgeting has more negative effects than positive one on the performance of Nigeria public sector. It will enable the ministry of finance to know how far they have went in effective planning and budgeting towards the performance of Nigeria public sector. Students, researchers, scholars, audience, the government and the society at large stand to benefit a lot from the findings, of this study. 1.5 RESEARCH QUESTIONS Nwaorgu (1991), research questions are these questions posed by the researcher, seeking answers to which would lead to the solution of the problem. Research questions have to provide focus and direct attention to the major issues in the study. This study is therefore, guided by the following research questions. - Does planning and budgeting have effect on the performance of Nigeria public sector? - Does effective planning and budgeting play any role in the performance of the Nigeria public sector? - Does planning and budgeting has any relationship with the performance of Nigeria public sector? - How important is effective planning and budgeting in the Nigeria public sector? - How effective is planning and budgeting in enhancing the performance of Nigeria public sector? 1.6 RESEARCH HYPOTHESIS According to Obasi Ferdinand (2008), these are intelligent guesses regarding some pertinent variable, the research hypotheses are:- Hi: Effective planning and budgeting enhance the performance of Nigeria public sector. Ho: Effective planning and budgeting does not enhance the performance of Nigeria public sector. Hi: Planning and budgeting has effect on the Nigeria public sector. Ho: Planning and budgeting does not have effect on the Nigeria public sector. 1.7 SCOPE OF THE STUDY Nwaorgu (1991) said that the scope of study refers to all those aspects of the study the researcher deliberately eliminated off the study due to certain reasons. It has to do with the content areas coverage of the study, not the geographical areas coverage. This researcher set out to discover effect of planning and budgeting in the performance of Nigeria public sector. This researcher chose this scope in order to allow the researcher do an in-depth research on the performance of the public sector in relation to effective planning and budgeting of the nation. 1.8 LIMITATION OF THE STUDY The research work would have widened its scope as regards as various literature to review and with total assistance from the use of case study but for some factors that acted against it, such factors includes time constraints resulting from the coincidence of academic activities and the research work, financial constraints and respondent attitude towards welcoming the relevant question for the purpose of the study. 1.9 DEFINITION OF TERMS PLANNING: BUDBET: PERFORMANCE: PUBLIC SECTOR: DEFICIT: SURPLUS: CHAPTER TWO 2.0 INTRODUCTION 2.1 LITERATURE REVIEW There exist several definitions of budgets from authoritative sources, but the common thread that cut across all the definitions is the plan of activities linked with financial resources. People (Organization) use time to communicate with each other but there are different languages of time just as there are different spoken languages, this is the view of Lane H. W & DiStefano (1988). Budget in that wise is a means of communicating to business stakeholders in monetary terms of what the Firm/Organization intends to spend and how much revenue they intend to generate from that expenditure for a given period. Concurring with time based definition of budget, Folk J.M (2002) had it that budget is a detailed plan for acquiring and using financial and other resources over a specified time period. It represents a plan for the future expressed in formal quantitative terms. Government over the years has been preparing budgets for anticipated revenues and anticipated expenditures. Anticipated revenues of government includes recurrent revenues, consolidated revenues, grants, fines and licenses, incomes from rented government properties, federal allocations and a host of others, while anticipated expenditures includes recurrent expenditures, personnel costs, administration, maintenance cost and capital expenditures. Budget had been defined by Reeve J.M & Warren C.S (2008) as an accounting device used to plan and control resources of Operational Departments of Governments and Divisions. These definitions and explanations of budget are alike but this paper adopted the concept of budget defined by Omolehinwa, Ade (2005) as a financial and/or quantitative statement, prepared and approved prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective. Budgeting mission is to touch the lives of people at the grassroots by incorporating what people need to better their lives. Education, health, power, roads, water and shelter are not exceptions. Budgeting involves understanding of how much money you earn and spend over a period of time. When you create a budget, you are creating a plan for spending and saving money through control. The budget is used as an instrument to tract the flow of resources. The control aspect of budget tries to monitor, ensure that every naira must be justified to fulfill the budget purpose. Other functions of budget as propounded byMbieli Patrick (2006) include; regulate Corporate areas of expected revenues and actual expenditures, provides resources for execution of projects, acts as a means of checks and balances in financial administration, and gives rooms for proper auditing and accounting of Public revenue. According to Edwards J.R (1994) one of the fundamental uses of budget is the ‘control’ functions. To him, budget is a financial plan which is prepared based on the expectations of the future activities and is used to control those activities. In Governmental circles, as opined by Baker Richards (2005) budgets are used to assist management control and to provide the legal authority to levy taxes, collect revenue and make expenditure in accordance with the budget provisions. It is the budget that establishes and communicates the objectives and priories of governing units. It is asserted Milam E.E (2007) that budgeting promotes planning, coordination, enhances performance measurement and introduces corrective actions. Management uses budget a base to initiate expenditure actions. Previous budgets help governments to tract the level of success or failure achieved over the years. In order to keep track of activities that need to be included in the Budget document, many Government organizations prepare their budgets based on incremental rather than other types of budgeting. It is observed byHilton T.W( 2006) that the use of the revised current year estimates of income and expenditure as a starting point for determining the budget for next year is frequently claimed to be one of the most fundamental weakness of the budgetary process. It is urged that such an approach fails to consider whether a particular item is still required or whether the amount currently incurred is reasonable. Once an item appears in the budget at inception, its inclusion in future budgets is taken for granted and only incremental changes in the item are considered. In this type of situation, attention is therefore focused on the marginal or incremental difference between this year’s budget and last year’s budget rather than on the whole of the budget, and it is this that gives rise to the term incremental budgeting. In Nigeria to overcome the lapses of incremental budgeting, what is in vogue and encouraged by current administration is clean slate type of budgeting which is otherwise known as zero based budgeting. At the end of the year all unspent money will be returned to treasurer. Some ministries often find it difficult to return such money so they resort to looking for activities that will allow spending of more money in order to spend their budget. This act has prompted a new terminology called ‘Budget Engineering’. A balanced scorecard budget obviates budget engineering found in both incremental and zero based budgeting process and budgets. It is the opinion of Secett, M. (1993) that for budget to be translated into concrete development and growth there must be a real forecast of goals or targets at all the tiers of governments. The essence of Governments relying on budget is because it serves as a map of activities at all tiers of government. Reliable, accurate and timely presentation of budget will facilitate early government goals attainment. In order to draw Governmental map of activities, budget may be formed from a ‘Balanced’ or ‘Unbalanced’ locus. According to the author of SAP.com (2010) a balanced budget is a situation in which estimated revenue of the Government during the year is equal to its anticipated expenditure while that of unbalanced budget is a situation whereby Income and Expenditure are not equal to each other. The unbalance may turn to be a surplus or deficit budget. A budget is termed ‘Surplus’ where revenues are estimated to be greater than projected expenditures, while ‘Deficit’ budget represents a situation where estimated revenues are less than projected expenditures. Budget may also be classified based on time frame. In the words of Milam E.E (2007) Capital budget is a long-term plan regarding investments in facilities, equipment or other lines of governmental ventures. According to the author in ehow.com (2011) Operating budget captures the routine revenue and expenses of different levels of government for a short time frame. In Nigeria, Operating budget is called Recurrent Expenditure Budget. Recurrent Expenditure Budget covers a time frame of one year, starting from January to December each year. Balanced Scorecard perspective of Budget is whatHorngren T.C (1982) had in mind while stating that for budget to achieve its functions of compelling planning, provide performance, promote communication and coordination, it had to be administered ‘intelligently’. One of the founders of Balanced Scorecard Budget perspective is Rohm Howard (2002) who asserted that the Balanced Scorecard is a communications tool to make strategy clear to everyone and it is a system for increasing accountability. In the Governance parlance, balanced scorecard pertains to serving Country by helping improve the lives of the people and community. It is about increasing value by providing more cost-effective services within the ambits of the Budget. To the Business sector, it deals with increasing business opportunities and raising quality of goods and services provision.Smith Jean M (2006), citing Rohm, 2005 agreed that Balanced Scorecard is a tool that measures performance based on strategy and objectives. On definition and explanation of balanced scorecard,Smith Jean M (2006) quoting Procurement Executives’ Association, 2005 defined the Balanced Scorecard as a conceptual frame work for translating an organization’s strategic objectives into a set of performance indicators distributed among four perspectives of; Financial, Customer, Internal Business processes and Growth. We know that Customer in government terminology is the populace/community and Internal business processes represents the Government employees. 2.2 System of Budgeting and Implementation: An Overview Budgeting in the public sector is a document or a collection of documents that refers to the financial condition of the government (Turns, 2006). A budget is prospective in the sense that it refers to expected future revenue and expenditure, in the Federal Government circle the budget is greatly limited in legal status. It is the official recommendation of the president to the congress. In other to provide for a responsible government, budgeting is generated to a cycle. The cycle allows for the system to absorb and respond to new information and in doing so the government is held accountable for its action though it should be recognized that many Factors curtail the extent to which the president can make major changes in the budget. In some states, preparation and authority is not always given to governors while some have responsibility for preparation and submission, some share budget making authority with other elected administrative officer, civil servant, political appointees, legislative leader, or some combination of these officers. In the federal government level, preparations start from, large agencies. The agencies begin by assessing their programmes and considering which programmes required revision and whether new programmes should be recommended. At same time, estimates are made by the president’s staff regarding anticipated economic trends in order to determine available revenue under existing tax legislation. The budget approval in the public sector (Government) occurs at three stages namely ministerial approval, executive approval and legislative approval. The preparation of budget phase commences five months before the beginning of the fiscal year. Guidelines are issued from the ministry of budget and planning in a form of circular. When the circular demanding the budget estimates to prepare is received by each ministries and department, a departmental committee of budget estimate is set up by each ministry and extra ministerial department. The committee is headed by the ministerial head of budget and personnel. It has its function as consideration and reconciliation of the budget proposals submitted by various departmental branches, division and units of the ministry. 2.4 Ministerial Approval Phase Each ministry submits their estimates to the Ministry of Budget and Planning for further consideration and approval. The Ministry of Budget and Planning in turn set up a committee called “Draft Committee” for the review of draft estimates submitted by the ministries. These committee asked each ministry or department to come and defend its proposals; having concord on the proposal, the budget department aggregate the budget in the form of a consolidated estimates of revenue and expenditure. This is sent to the presidents for its approval. 2.5.1 Executive Council Approval Phase The president on receipt of the advanced proposal as approved by the budget and planning present the draft estimate before his cabinets members known as the council of ministers for further consideration and approval. This council discusses and agrees the estimates with the president’s political priorities of government and therefore the president gives his executives approval of the draft estimates before sending it to house of legislature inform of appropriation bills. 2.5.2 Legislative Approval Stage The National Assembly comprises the house of representative and the house of senate. The president presents his budget package to the National assembly at a joint meeting of the two houses of assembly. This meeting is known as BUDGET SESSION. It is up to the national assembly to approve, modify or rejects the Bills. In each house there are standing committees, which relates to the ministries and departments. At such committees, each ministries and departments are invited to defend the increasing budgeting allocation, in justification of their Programmes. The house debates the bill and makes modifications where necessary. After the house must have considered and reconciled the budgets estimates in the light of national economic and priorities then the appropriation committee is brought for appropriation purposes. If the house are convinced and satisfied with the proposals, each of them will approve the budget. Where there are discrepancies in opinion on some particular items, the two houses appoint finance committee that would resolve such differences. The resolution of the finance committee is final on the difference. Afterward they both sit to approve the budget. On approval of the national assembly the budget is sent back to the president for his assents and signature. And consequently it becomes the appropriation act. These will now be printed and distribute to the ministries and department inform of approved estimates. 2.4 New Trends in Cost Monitoring and Auditing Value for Money Audit The scope of government auditing has been widened over the years by the demand for independent verification of information to the extent that it can no longer be limited to the audit of financial operations. Government auditing now extends to financial audit, regulatory audit, economy, efficiency, and effectiveness audit. The audit objectives has been viewed traditionally as an independent examination of the financial statements of an entity followed by the expression of independent opinion as to the truthfulness and fairness of the financial statement against the criteria of generally accepted accounting principles and standards However, in the case of government accounting, the general absence of the profit motive and the presence of the provision of social and economic services have combined to extend the audit objective to include an ascertainment of whether the establishment being audited is achieving the purposes for which its programmes are authorized and whether it is doing so economically, efficiently and effectively. Value for money is the concept that seeks the maximization of the use of scarce resources for the welfare of the public by ensuring that activities and programmes are carried out at low cost and to high standard. In order to achieve this phenomenon, three elements are usually covered and these are: Economy, Efficiency and Effectiveness. According to Afemishe (2003), these three elements of value for money can be described as follows: a. Economy is the practice by management of the virtues of thrift and good housekeeping. An economical operation acquires resources in appropriate quality and quantity at the lowest cost. b. Efficiency is making sure that the maximum useful output is gained from the resources devoted to each activity, or alternatively, that only the minimum level of resources are devoted to achieving a given level of output. The efficiency of an operation could be said to have increased if either lower cost were used to produce a given amount of output, or a given level of cost has resulted in increased output. c. Effectiveness is ensuring that the output from any given activity is achieving the desired results. There is, therefore, the need to establish that the desired goals are being achieved in order to evaluate effectiveness. The type of interrelationship among these three elements is that all of them must be in place before the assessment of value for money can be said to complete. Right things must be done, using the right method and at minimum cost. For instance, as much as effectiveness is linked with the achievement of set objectives, it is also important to expect that the objectives are achieved by the application of the right methods that is, efficiency. The use of a sledge hammer to kill a housefly, though effective is not efficient. The application of value for money concept to auditing leads to the concept of Value for Money (VFM) audit. It is applicable to both the private and public sector, but more emphasis has been placed on its application to the public sector. It is related to the extent to which funds are spent economically, efficiently and effectively. It is also referred to as Comprehensive Audit or Efficiency Audit. CHAPTER THREE RESEARCH METHODOLOGY 3.1 Research Design The researcher adopted survey research method which will be based on a personally administered questionnaire. The researcher chose this method because, this study is based on performance of the media organizations involved and also because the population of the study is large and heterogeneous to be observed directly. More so, this method is used because it is suitable for gathering vast array of data and it makes data arrangement and computation less cumbersome. 3.2 Population of the Study The population of the study can be said to be animate or inanimate things which a study is focused. It could be class, school, libraries, towns, local government area, states, nations or persons the research is interested in getting information for the study (Nnayelugo: 2001). In this research study, the population used comprises of some public sector of the government in Osun state. The rough estimate of the population size is 10,000. The sample size of 100 respondents is drawn from the total population. 3.3 Research Sample and Sampling Technique A sample size of ‘100’ will be drawn from the population. The sample population will be gotten from the population of the study in such a way that it will be representative of the major divisions of the study population. The sampling technique adopted is the simple random sampling method through which the researcher will get 100 respondents, with the use of questionnaire. This is due to the fact that simple random sampling offers the respondents equal chance of being selected. 3.4 Instrument for Data Collection The questionnaire is the instrument for data collection. The questionnaire will be in two parts; part one will be the demography of the respondents like; gender, age, marital status etc. and part two will contain questions relating to the study underway. The questionnaire will consist of about 10 close-ended questions appropriate to elicit the desired information. 3.5 Validity of the Instrument The instrument (questionnaire) used is valid because it is the most appropriate instrument for data collection in survey study because; it removes the influence of the researcher in gathering information for the research; its impersonal nature makes data realized from it reliable, and most importantly, it makes both respondents and researcher trust the confidentiality of their communication. 3.6 Method of Data Collection The method of data collection used is the primary source, which according to Churchill (1978:28), is data originated from the researcher for the purpose of the study at hand. The primary data was collected through the use of questionnaire which was self administered to the respondents. 3.7 Method of Data Analysis For proper analysis of the data collected during the course of this study. Appropriate descriptive and inferential statistical tools of analysis of data will be used in analyzing the collected data. The use of these data analysis methods cannot be done without appropriate coding. For this reason, responses will be assembled in what is known as the coding sheet, using unique coding scheme for responses to questions in the questionnaire. CHAPTER FOUR 4:1 DATA PRESENTATION, ANALYSIS AND RESULTS In this chapter, the data analyzed and the results arrived at, were presented. A total of 100 copies of the questionnaires were distributed and encouragingly, all were completed and returned. This shows 100% response, which is highly appreciated. Meanwhile, this was as a result of the receptive nature of the respondents as well as personal approach which the researcher adopted in administering the questionnaire. ANALYSIS OF DATA TABLE: 1 GENDER DISTRIBUTIONS OF THE RESPONDENTS. OPTIONS FREQUENCY PERCENTAGE Male 54 54 Female 46 46 Total 100 100 The above table shows that 54 (54%) respondents were male, 46 (46%) were female this shows that most of the respondents were male. TABLE 2. AGE DISTRIBUTION OF RESPONDENTS. OPTIONS FREQUENCY PERCENTAGE 15-24 years 20 20 25-34 years 65 65 35-44 years 10 10 44+ 5 5 Total 100 100 The above table shows that 20 (20%) were between the age range of 15- 24 years, 65 (65%) were between the age range of 26-35 years, 10 (10%) were between the age range of 36 and 46 years while 5 (5%) were between the age range of 47 and above. This shows that a greater number of the respondents fall within the age range of 26-35 and above. TABLE 3: EDUCATIONAL QUALIFICATIONS OF THE RESPONDENTS. OPTIONS FREQUENCY PERCENTAGE FSLC - - SSCE/NABTEB 22 22 DIP/ND 48 48 HND/B.Sc. 14 14 M.Sc./PHD 16 16 Total 100 100 Table 3 shows that none of the respondents have FLSC, 22 (22%) have SSCE/NABTEB, 48 (48%) have DIP/ND, 13 (13%) have HND /B.Sc. 15 (15%) has M.Sc./PHD. This indicates that a greater number of the respondents have DIP/ND qualification. TABLE 4: MARITAL STATUS OF THE RESPONDENTS. OPTIONS FREQUENCY PERCENTAGE Single 78 78 Married 22 22 Divorced - - Total 100 100 In table 4, the data collected shows that out of the 100 respondents that completed and returned their questionnaire, 78 (78%) were single, while 22 (22%) were married, while none of the respondents were divorced; this shows that most of the respondents were single. TABLE 5. LITERACY LEVELS OF RESPONDENTS. OPTIONS FREQUENCY PERCENTAGE Yes 95 95 No 5 5 Total 100 100 The above table shows that 95 (95%) were literate while 5 (5%) were illiterate. This means that most of the respondents were literate. The researcher assisted the illiterate people by reading out the questions of the questionnaire and indicating their responses against the questions. The researcher did this in their local language in order to enable them understand effectively. SECTION B Table 6 Does broadcast news commentary influence social change? OPTIONS RESPONDENTS PERCENTAGE Yes 76 76% No 24 24% Total 100 100 From the above table, it is shown that out of the 100 respondents who completed the questionnaires, 76 (76%) choose yes, while 24 (24%) choose no. Table 7 Does a Government policy effect dissemination of broadcast news commentary? OPTIONS RESPONDENTS PERCENTAGE Yes 65 65% No 35 35% Total 100 100 From the above table, it is shown that 65 (65%) of the respondents choose yes, while 35 (35%) choose no. This shows that a lot of the respondents choose yes. Table 8 Are people more exposed to radio than television? OPTIONS RESPONDENTS PERCENTAGE Yes 59 59% No 41 41% Total 100 100 From the table above, it is shown that 59 (59%) of the respondents choose the yes OPTIONS, while 41 (41%) of them choose the no OPTIONS. Table 9 Are the audiences satisfied with the information they get from local media? OPTIONS RESPONDENTS PERCENTAGE Yes 61 61% No 39 39% Total 100 100 From the above table it is shown that 61 (61%) of the respondents choose yes, while 39 (39%) choose no. This shows that majority of the respondents choose yes. Table 10 Do people believe in what they hear over the radio? OPTIONS RESPONDENTS PERCENTAGE Yes 78 78% No 22 22% Total 100 100 From the above table it is shown that 78 (78%) of the respondents choose yes, while 22 (22%) choose no. This shows that majority of the respondents choose yes. Table 11: do you think that radio news has any impact on its listener? OPTIONS Frequency Percentage Yes 75 75 No 25 25 Total 100 100 With above aforementioned table shows that 75(75%) respondents says that radio has impact on listeners while 25(25%) against.