effect of planning and budgeting in the performance of Nigeria Public Sector

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					                               CHAPTER ONE



      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.


       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.


       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.


       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.

       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


   -   How effective is planning and budgeting in enhancing the performance of

       Nigeria public sector?


       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

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.


      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.


      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.






                                  CHAPTER TWO



      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


      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


      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


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


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
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
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


        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.



         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.


         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.


         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.

          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.


          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.

   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

       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

   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.

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