Fidelity Bank Budgetary Control PDF

Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 7, No.6, June 2018
Impact Of Budget And Budgetary Control On Employee And

Organizational Performance – A Study Of Nigerian Banks
Egbunike, Patrick Amaechi, Associate Professor, Department of Accountancy, Nnamdi Azikiwe University, Awka, Ni-
geria
King Sunday Ozioma, Department of Accountancy, Nnamdi Azikiwe University, Awka, Nigeria
Abstract
The purpose of this study was to appraise the impact of budget and budgetary control on the performance of Nigerian
Banks as well on the performance of their individual employees. The study focused of five of Nigeria’s top banks: Access
Bank Plc, First Bank Ltd, Guaranty Trust Bank Plc, United bank for Africa Plc, and Zenith Bank Plc. The selected banks
controlled over 50% of the Nigerian Banking industry’s assets and deposits as at Q3, 2017, indicating that results from
this study can be said to be generally applicable to the Nigerian banking industry. Data was sourced primarily through the
medium of questionnaires. Collated data was analysed using percentages while the hypotheses were tested using Chi-
Square. Findings showed that having a good budget and budgetary control system, including constant monitoring and re-
view of budget performance, is crucial to both employee and organisational performance in Nigerian banks.The use of
performance based incentives (such as cash rewards, bonuses, and promotions) is a better way of achieving improved
budget performance rather than the use of punishments / sanctions. An effective balance of rewards and sanctions however
need to be applied in order to achieve optimum results.
Keywords: Budget, Budgetary Control, Performance, Nigerian Banks
Introduction a basis for its revision’. Budgetary control involves: es-

To succeed, every individual or organisation needs to tablishment of budgets and continuous comparison of
have a clear vision, a clear plan, and a clear strategy. actual with budgets in order to appraise if targets are
Whereas a plan is the roadmap between where an organ- being achieved, revision of budgets after considering
isation is and where they would want to be, the strategy changed circumstances, and placing the responsibility
deals how the organisation intends to move from where for failure to achieve budget targets.
they are to where they want to be. Indeed strategy is “the
direction and scope of an organisation over the long- Over time, budget and budgetary control have emerged
term, which achieves advantage in a changing environ- important tools for enhancing organisational perfor-
ment through its configuration of resources and compe- mance in Nigerian banks; the budget provides a bench-
tences with the aim offulfilling stakeholder expecta- mark against which these banks are able to compare ac-
tions”.According to Sakissian (2017), ‘a strategic tual performance. The Nigerian banking industry, as any
roadmap is a time-plan that defines where a business is, other country’s banking industry, is of strategic im-
where it wants to go, and how to get it there’. A good, portance to the performance of the economy as a whole.
realistic plan is therefore a sine-qua-non for business Nigerian banking stocks have been one of the most ac-
success. In as much as a clear plan is crucial for success, tively traded in the Nigerian stock markets in recent
a plan would only have very limited value if it is not years, resulting from the fact that Nigeria’s banking in-
quantified in monetary terms, hence the need for a budg- dustry has been the most vibrant and one of the most
et. Budget is often described as ‘a plan quantified in profitable in the past two decades. Several of Nigeria’s
monetary terms’. top banks, such as Zenith Bank Plc, Guaranty Trust
Bank Plc, and Access Bank Plc, have grown from small
The Chartered Institute of Management Accountants banks with a few business offices in Nigeria just two
(CIMA) defines the term ‘budget’ as ‘quantitative ex- decades ago to global brands with subsidiaries in many
pression of a plan for a defined period of time. It may countries, across several continents. The monumental
include planned sales volumes and revenues; resource success of these banks in the past decade make them
quantities, costs and expenses, assets, liabilities and cash good candidates for study.
flows’. CIMA also defined budgetary control as ‘the
establishment of budgets relating to the responsibilities This study assesses the impact of budgets, budgeting,
of executives of a policy and the continuous comparison and budgetary control on the performance of employees
of the actual and the budgeted results, either to secure by and the organization as a whole in Nigerian banks with
individual action the objective of the policy or to provide focus on select Nigerian banks. For purposes of this
© The Author Blue Ocean Research Journals

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study, five of Nigeria’s biggest banks, namely Zenith performance will be measured. For example, this might
Bank Plc, First Bank Ltd, United Bank for Africa Plc be the minimum profit and loss performance expected by
(UBA), Guaranty Trust Bank Plc, and Access Bank Plc senior management. Performance against budget may be
was selected. As at end of Q3, 2017, these five banks part of the organisation’s appraisal system for individu-
were all among Nigeria’s top six banks, both by asset als who are deemed accountable for such performance’.
size and profitability.
The Association of Accountancy Bodies in West Africa
Research Questions Public Sector Accounting study manual defines budget
The study sought to answer the following research ques- as ‘an authorised financial plan of the anticipated reve-
tions: nues and expenditures’, while the Institute Chartered
a. What approaches to budgeting are predominantly Accountants of Nigeria(ICAN) study manual on Public
used in Nigerian banks? Sector Accounting and Finance defines budget as ‘a fi-
b. How realistic and achievable are budgets set in Nige- nancial and/or quantitative statement prepared and ap-
rian banks? proved prior to a defined period of time for the purpose
c. What is the impact of attainability on budget perfor- of attaining a given objective. A budget is normally for a
mance in Nigerian bank? year. It is therefore a short-term plan. One of the primary
d. What impact does the use punishments, sanctions and objectives of budget is to measure the profit earnings of
/ or rewards (bonuses, increased salaries and promo- an organisation’. Simply put therefore, a budget is a pan
tion) have on budget performance? of action expressed in quantitative or monetary terms
e. What is the attitude of the banks to failure to meet set while the budgeting process is an essential component of
deposit and / profit budgets? management control systems, which provides a system
f. What is the impact of staff involvement in the budget of planning, coordination and control for management.
setting process on motivation to attain the set targets?
g. What is the impact of good budgetary control (in- History of Budgeting
cluding constant review and monitoring of approved It is not exactly known when modern budgeting as we
budgets) on the overall performance of the organiza- have it today started, but it is believed that budgeting
tion? dates back to the Egyptian and Roman civilization peri-
ods (around 2500BC to 500BC). Back then, the mer-
chants believed in drafting all expected expenditure
Research Hypothesis against expected income in respect of their businesses so
For the purpose of analysing the data, the following hy-
as to be able to know the kind of venture that would be
potheses were tested:
profitable. Today, budgets are an indispensable tool for
a) Ho1: Budgeting and budgetary control has no signifi-
management, planning and control for most countries,
cant impact on organizational performances in Nigerian
businesses, and even individuals.
banks;
In Britain, ‘the budget is prepared by the Treasury team
b) Ho2: Budgetary control does not affect the perfor-
led by the Chancellor of the Exchequer and is presented
mance of individual employees in Nigerian banks.
to Parliament by the Chancellor of the Exchequer on
Budget Day. It is customary for the Chancellor to stand
Literature Review on the steps of Number 11 Downing Street with his or
Budget and Budgeting her team for the media to get photographic shots of
The Chartered Institute of Management Accountants the Despatch Box, immediately prior to them going to
(CIMA) Official Terminology, 2005 defines a budget as the House of Commons. Once presented in the House of
‘a quantitative expression of a plan for a defined period Commons it is debated and then voted on. Minor chang-
of time. It may include planned sales volumes and reve- es may be made however with the budget being written
nues, resource quantities, costs and expenses, assets, and presented by the party with the majority in the
liabilities and cash flows’. CIMA Official Terminology, House of Commons (the Government), the Whips will
2005 went further to explain that ‘budgeting is the pro- ensure that it is passed as written by the Chancellor’.
cess of expressing the predicted costs and resources for a
planned course of action over a specified time period. In the US, ‘the federal budget is prepared by the Office
Budgets can be drawn up for business units, depart- of Management and Budget, and submitted to Congress
ments, products, teams or the entire organisation. Anoth- for consideration. Invariably, Congress makes many and
er term for a budget is a financial plan, but budgets can substantial changes. Nearly all American states are re-
refer to non-cash resources, such as staff or time. Budg- quired to have balanced budgets, but the federal gov-
eting helps all types of organisation to plan and control ernment is allowed to run deficits’. In India, ‘the first
their operations, and to support their managerial strate- budget of India was submitted on 18 February 1869 by
gies. A budget sets out the benchmark against which James Wilson. James Wilson is known as the father of

Indian budget. Finance Minister is the head of the budget

making committee. The budget is prepared by the Budg- b. Cash budget:This is a detailed budget of estimated
et Division Department of Economic Affairs of cash inflows and outflows.
the Ministry of Finance annually. This includes supple-
mentary excess grants and when a proclamation by the c. Capital budgeting: This is the planning process
President as to failure of Constitutional machinery is in used to assess whether an organisation's long
operation in relation to a State or a Union Territory, term investments such as those on new machinery,
preparation of the Budget of such State’. replacement of machinery, new plants, new prod-
ucts, and research development projects are viable
In Nigeria, formal budgeting dates back to pre- enough to deserve funding through the firm's capi-
independence days. Presently, the executive arm of gov- tal structure (debt, equity or retained earnings)
ernment led by the president, must prepare and lay be-
fore the National Assembly budget estimates annually. d. Operating budget:This contains estimates of the
The budget estimates is reviewed by the National As- total value of resources required to carry out opera-
sembly, and once passed is returned to the President for tions for a specified period. It is the budget of the
accent. Once the document is accented to by the Presi- revenues and expenses expected in a forthcoming
dent, the budget becomes law, and its implementation is period. This budgets can include financial indica-
mandatory on the executive. Similar process is applica- tors such as cash, profit/loss, working capital and
ble in the state and local government levels. non-financial items such as staff numbers, orders
and volumes of output. Progress is monitored regu-
Purpose of the Budget larly by comparing actual performance against
Budgets are used for the following: budget. Variances are investigatedand necessary ac-
tions taken to optimise positive variances and / or
a. Planning: Budgets are used to plan. A budgeting mitigate negative variances.
process forces the organisation to look at the future
b. Control: Budgets provide a standard against which Approaches to Budgeting
actual performance can be compared. This enables Incremental Budgeting: This approach involves adding
appropriate actions to be taken to either enhance a percentage to last year's figures to arrive at this year's
positive variances or mitigate negative ones. budget. The percentage added is essentially to incorpo-
c. Communication: Budgets are a communication rate the effects ofinflation and other known changes.This
channel to both senior and junior management method of budgeting is suitable for businesses and or-
alike. ganisations where costs are not expected to change sig-
d. Motivation: A budget is a target to be achieved. nificantly; where there is good cost control; and where
There should be reward for achieving set revenue there are limited discretionary costs.
targets and staying within expenditure budgets; this
serves as a motivator. Advantages of the Incremental Budgeting Approach
e. Co-ordination: The budget allows co-ordination of a. It is the quickest and easiest method
all parts of the business towards a common goal. b. If historic figures are acceptable, only the incre-
f. Evaluation: The budget can be used for perfor- mental amount needs to be justified
mance evaluation. The budget may be used to eval- c. It avoids ‘re-inventing the wheel’
uate the actions of a manager within the business in d. It is simple to understand and operate.
terms of costs and revenues which they have con- e. It is cheaper to produce.
trol. f. It encourages the continuity of projects.
g. Authorisation: The budget acts as formal authori-
sation for a manager for expenditure, hiring staff, Disadvantages of Incremental Budgeting
and pursuit of other plans contained in the budgets a. The method allows past errors to be carried for-
ward.
Types of Budget b. Uneconomic activities that should be discontinued
There are very many types of budget and budgets may be may be continued
classified using several criteria. c. Managers may strive to spend as much as possible
so as to get an increased budget the following year.
a. Master Budget: The master budget is the summary d. New viable projects may not be initiated.
of all the functional budgets. This budget consoli-
dates all subsidiary budgets and usually comprises
the budgeted statement of profit or loss, statement
of financial position, and statement of cash flows.

Rolling Budgets manager begins with a zero base of resources. The man-
A problem with the annual, incremental budget is that it ager only receives resources if they can be justified. It is
can quickly become unrealistic. This leads to the targets a management effort which provides for systematic con-
becoming unreachable and managers becoming demoti- sideration of all activities and programmes.
vated. A rolling budget is one that is kept continually up
to date by adding another accounting period (e.g. month The 'Zero-Base' budgeting technique is a programme
or quarter) after the earliest accounting period has ex- budgeting reform that was introduced by Peter Pyhrr of
pired. Texas, but popularised by a Past President of the United
States of America, Jimmy Carter, in 1976. The technique
Advantages of Rolling Budgets requires every item of expenditure to be justified as if the
a. Produces more accurate budget particular activity or programme is taking off for the first
b. Has better and more relevant information for per- time. It is the preparation of operating budgets from a
formance appraisal purposes 'zero-base' of expenditure cost. Under the technique,
c. Forces management to take the budgeting process resources are not necessarily allocated in accordance
more seriously with the previous patterns. Each item of expenditure
proposed has to be annually re-justified. 'Zero-Base'
Disadvantages of Rolling Budgets budgeting seeks to avoid perpetuating obsolete expendi-
a. More costly and time consuming ture items.
b. The budget may be demotivating because the tar-
gets are changing regularly The ZBB approach is particularly suitable for fast mov-
c. An increase in budgeting work may lead to less ing businesses/industries, public sector organisations,
control of the actual results. and where there are discretionary costs such as research
and development (R&D).
Fixed and Flexible Budgets
A Fixed Budget is a budget prepared for a single level of Zero-Base Budgeting Process
activity while a Flexible Budget is a budget prepared There are four stages in the implementation of ZBB:
with the cost behavior of all cost elements known and a. Managers should specify for their responsibility
classified as either fixed or variable. The budget may be centres those activities that can be individually
prepared at a number of activity levels and can be evaluated.
‘flexed’ or changed to actual level of activity for b. Each of the individual activities is then described in
budgetary control purposes. a decision package. The decision package should
state the costs and revenues expected from the giv-
Advantages of Flexible Budgeting en activity. It should be drawn up in such a way
a. A problem with the annual, incremental budget is that the package can be evaluated and ranked
that cost centers are given the same amount of against other packages.
money to spend regardless of activity. Flexed c. Each decision package is evaluated and ranked
budgets adjust the target to reflect the amount of usually using cost/benefit analysis
work to be carried out. d. The resources are then allocated to the various re-
b. Flexible budgeting should enable better perform- sources
ance evaluation as a result of comparing like with
like. Advantages of Zero-Base Budgeting
a. ZBB enables inefficient and obsolete operations to
Disadvantages of Flexible Budgeting be identified and discontinued.
a. Flexible budgeting demotivating when it is per- b. ZBB leads to increased staff involvement at all lev-
ceived as ‘shifting the goal post’ especially if bo- els. This should lead to better communication and
nuses are denied despite beating the original motivation.
budget. c. It allows for optimum allocation of resources. This
b. It may be difficult to split costs into fixed and vari- is made possible by the formulation of alternative
able elements. courses of action and evaluating each on its own
c. It can be argued that all costs are variable in the merit. Resources are therefore allocated by need
long run and benefit accruing, rather than political or emo-
tional considerations.
'Zero-Base Budgeting' (ZBB) d. It creates questioning attitude instead of assuming
A problem with the annual, incremental budget is that that current practice maximizes expected money
departments are given money each year because they value. Wasteful spending is thereby reduced.
have been given it in the past. Zero based is designed to e. It provides a better yardstick for the measurement
eliminate this wastage. ZBB starts with the idea that each of performance.

f. The technique allows for the participation of the d. ABB can provide useful information for a total
various organs of the decision unit. quality management (TQM) environment by relat-
g. It focuses attention on the future rather than the ing the cost of an activity to the level of service
past; old and new projects are therefore appraised provided
on the same basis.
h. Under 'Zero-Base' budgeting, important projects
can continue to receive funds, owing to their viabil- Disadvantages/ of Activity Based Budgeting
ity. a. ABB would need a considerable amount of time
i. It is good for profit-oriented projects. and effort to implement
b. ABB might not be appropriate for some organisa-
tions when their activities and cost structures are
Disadvantages/Problems of Zero-Base Budgeting considered.
a. The time involved and the cost of preparing the c. It may be difficult to identify clear individual re-
budget are much greater than for less elaborate sponsibilities for costs.
budgeting methods
b. Managers may feel demotivated due to large
amount of time spent on the budgeting process. Planned, Programming and Budgeting Sys-
c. It is difficult to compare and rank completely dif- tem (PPBS)
ferent types of activity. The Chartered Institute of Public Finance and Account-
d. The rankings of packages may be subjective where ancy defines Planned, Programming and Budgeting Sys-
the benefits are of a qualitative nature. tem as: "Primarily, a system associated with corporate
e. Lack of and sometimes unreliable data may inhibit management which identifies alternative policies, pre-
or undermine the usefulness of the approach. sents the implications of their adoption and provides for
f. In determining decision packages, there is, some- the efficient control of those policies chosen. It embraces
times, the problem of fixing the minimum level of several established concepts and analytical techniques
expenditure. within the framework of a systematic approach to deci-
g. There is need to make accounting structure con- sion making, planning, management and control. The
form to the 'Zero-Base philosophy, for the purpose principal features of Planned, Programming and Budget-
of evaluation and control. This may necessitate a ing system are that it relates to objectives and outputs, as
general review, overhauling, adding or scrapping of it emphasises the choice." This method of budgeting is
activities and functions. mostly used in the public sector.
Planned, Programming and Budgeting Systems:

Activity Based Budgeting (ABB) a. Breaks work down into programmes designed to-
ABB uses the principle of Activity Based Costing (ABC) wards achieving various objectives
to estimate the firm’s future demand for resources and b. Several departments may contribute towards a sin-
hence can help the firm to acquire these resourcesmore gle programme.
efficiently. ABC is an alternative to absorption costing c. Budget targets may spread over more than one
and its aim is to calculate the full production cost per year.
unit: Production overheads are grouped into cost pools d. The means to achieve programmes should be effi-
according to how they are driven; cost drivers are identi- cient and cost-effective.
fied for each activity; overhead absorption rates are cal-
culated for each activity; finally activity costs are ab- Advantages of Planned, Programming and Budgeting
sorbed into the product and the full production cost cal- System
culated. a. Lays emphasis on long-term effect.
b. Achieves effective use of budgeted resources and
Advantages of Activity Based Budgeting anticipated performance.
a. ABB draws attention to the costs of overhead activ- c. Ensures rational decision-making and forces those
ities which can be a large proportion of total over- seeking budgetary allocations to consider alterna-
head costs. tives.
b. ABB recognizes that it is activities that drives d. Leads to rapid economic development.
costs. If the drivers (causes) of the costs are better
controlled that should overall result in better man-
aged costs.
c. It provides information for the control of activity
costs

Disadvantages of Planned. Programming and Budg- ble system of targets designed to support the overall stra-
eting System tegic aims of the company. The power to decide these
a. There may be resistance to change, particularly targets, and to revise forecasts to assist in cash flow
among the very Senior Officers in the Governmen- planning is devolved downwards, the aim being to moti-
tal hierarchy. vate and inspire staff rather restrict behaviour. Perfor-
b. Transitional problems at the introductory stage. mance is measured against suitable indicators designed
c. The old accounting system may have to be modi- to show progress towards achievement of the targets,
fied to cater for the requirements of the new con- rather than historical variance analysis
cept.
d. Problem of data collection and physical monitoring. Hope and Fraser argued that using rolling budgets and
e. It may be difficult to install. non-financial performance indicators should achieve the
f. It makes heavy demand on resources. following:
g. The uncertainty of the future makes long term a. Create a culture based on beating the competition
planning difficult. (since goals are related to external benchmarks) ra-
ther than simply gaining more internal resources.
Criticisms of the Traditional Budgeting Sys- b. Rewards can be team-based increasing the amount
tems of motivation.
The following are some of the criticisms of the tradition- c. It is easier to judge the performance of people low-
al budgeting systems which are based on fixed annual er down the organisation (who are closer to the cus-
periods: tomers).
a. Encourage rigid planning and may not be appropri- d. It empowers more junior managers meaning they
ate in a fast changing environment. can respond more quickly to changes in the external
b. Encourage managers and employees to meet the environment.
budget even if this results in undesirable and uneth-
ical actions. The Beyond Budgeting model will particularly suit in-
c. Encourage managers and employees to spend what dustries where there is rapid change in the business envi-
is in the budget even if it is undesirable. ronment; organisations using methods such as total qual-
d. Reinforce barriers between departments rather than ity management (TQM); organisations with skilled staff
encourage knowledge sharing. who want to be empowered; and organisations undergo-
e. Ignore key drivers of shareholder value by focusing ing radical change, such as business process re-
on short-term performance engineering (BPR).
f. Traditional budgeting systems can be time consum-
ing
Traditional Budgeting and Beyond Budgeting
Compared
Beyond Budgeting Below is a summary of differences between the tradi-
The Beyond Budgeting model rejects the traditional ap- tional and beyond budgeting model:
proach in favour of continuous rolling plans and a flexi-
Traditional Beyond budgeting
Target Incremental targets Stretch goals
Fixed incentives Relative target & rewards
Planning and Control Fixed Continuous planning
Variance controls KPI’s and rolling forecast
Resources & Coordination Pre-allocated resources Resources on demand
Central co-ordination Dynamic co-ordination
Organisational Culture Central control Focus on value creation
Management of the numbers Front line authority
Rewards Individual departments have Viewed as one team

their own targets and

therefore are unwilling to Break down barriers with

share expertise, skills and emphasis on learning
information
Benefits of Beyond Budgeting c. Improves quality of decision since managers are

a. Employees will be responsible for setting appropri- closer to the customers and the target markets
ate targets which are linked to the strategy of the
organisation and their rewards will depend on their Budgetary Control
success in achieving these targets. The Institute of Chartered Accountants of Nigeria
b. Targets may be linked to external benchmarks and (ICAN) Study Pack on Public Sector Accounting and
not past performance Finance defines budgetary control as ‘the whole system
c. Beyond Budgeting organisations operate with of controls - financial or otherwise - to ensure that in-
speed and simplicity. Especially to customer re- come and expenditure are in line with the budgets and
quests that wastage is reduced to the barest minimum. Budget-
d. Beyond budgeting should help empower employees ary control is a positive and integral part of a public sec-
and engage them in helping the organisation to tor organisation's planning and appraisal activities so as
achieve its overall goals rather simply explaining to achieve the set objectives. In other words, budgetary
past performance control is a process of comparing the actual with a budg-
e. People will be motivated to question fixed costs eted activity, resulting in a variance, which could be fa-
and seek sustainable long term cost reductions. vourable or adverse’. Likewise, the ATSWA (Account-
f. The beyond budgeting approach should encourage ing Technicians – West Africa) study manual, defined
innovative solutions budgetary control as‘a process which is undertaken
g. There is trust to share knowledge and best practices throughout the budget period, where budgets and their
h. There is flexibility to respond quickly to new de- targets are continuously examined for review or adjust-
velopments ment, depending on performance so far and is used as a
means of making managers and heads of departments
Participation in Budget Setting accountable for their outfits and actions’.
There are two approaches: Top-Down and Bottom-Up
approaches Budgetary control has to do with monitoring of actual
performance to see if there are variances between the
Top-Down Approach budgets and actuals, and with a view to taking appropri-
Under this approach, budget is imposed on the budget ate steps to either enhance positive variances or mitigate
holder by senior managements negative variances. Simply put, a budgetary control sys-
tem comparesactual financial performance to budgeted
Advantages of Top-Down Approach: financial performance.
a. A situation whereby managers set targets that are
too easy to meet is avoided Objectives of Budgetary Control
b. A situation where budgets are not in line with cor- The objectives of budgetary control include the follow-
porate objectives is avoided ing:
c. The budgeting process is quicker a. Help the organization to achieves its objectives
d. Senior management are able to retain control b. Encourage planning for the short and long term
e. Avoids bad decisions that result from inexperience c. Communicate ideas and plans for the employee and
of managers the organisation
d. Coordinate activities that work towards the com-
Bottom-Up Approach mon goal
Under this approach, divisional managers have the op- e. Provide a framework for responsibility accounting
portunity to participate in the setting of the budget f. Establish a system of control for measuring per-
formance
Advantages of Bottom-Up Approach: g. Motivate employees to improve their performance
a. Managers are more motivated due to sense of own-
ership and empowerment Behavioural Aspects of Budgeting
b. Frees up senior management’s time and they can It is important to consider human nature, not just num-
focus on other tasks bers when putting together a budget. For instance, the
managers who draw up a budget may have personal pri-
orities that skew the numbers. The employees who live

with the budget may also resent the limits it puts on d. Ecobank Nigeria – acquired Oceanic Bank
them. e. Fidelity Bank Nigeria
a. When top-down approach is used, without consult- f. First Bank of Nigeria
ing the lower ranks,workers and lower-level manag- g. First City Monument Bank – acquired FinBank
ers may think the budget sets an unrealistic standard h. Guaranty Trust Bank
and be demotivated rather motivated to work hard to i. Heritage Bank plc – acquired Enterprise Bank
achieve the budget. (formerly Spring Bank)
b. Managers who participate in drawing up the budget j. Keystone Bank Limited – formerly Bank PHB
may have vested interests. For example, a depart- k. Providus Bank plc
ment head has a stake in emphasising her depart- l. Skye Bank – acquired Mainstreet Bank Lim-
ment's need for extra resources and a bigger share of ited(formerly Afribank Nig Plc)
the money. That can lead to him inflating estimates m. Stanbic IBTC Bank Nigeria Limited
of the money the department needs or how much it n. Standard Chartered Bank
contributes to the company. An effective budget- o. Sterling Bank – acquired Equitorial Trust Bank
making process has to include enough objective p. Suntrust Bank Nigeria Limited
analysis that it can get past the human factor. q. Union Bank of Nigeria
c. Some employees see a budget is a form of punish- r. United Bank for Africa
ment. Managers can use budgets to deny even rea- s. Unity Bank plc
sonable requests or penalize employees. Workers t. Wema Bank
may feel they can't do their jobs properly because of u. Zenith Bank
restrictions. Employees can become even more hos- v. Non-interest banks
tile if meeting the budget is a key standard in as- w. Jaiz Bank
sessing performance. Also,if the budget is unfair, x. Merchant banks:
some employees may be inclined to perpetrate un- y. Coronation Merchant Bank
ethical conducts like pad estimates and forge fig- z. Rand Merchant Bank
ures. aa. FBN Merchant Bank Limited
d. Using Bottom-UP approach can help make employ- bb. FSDH Merchant Bank
ees to commit to making the budget work. Efforts to cc. Foreign Bank Representatives:
involve employees should be sincere, as a phony dd. Barclays Bank plc
display of interest in the employees' view or a show ee. Deutsche Bank
of hearing their concerns won't work. Employees are ff. JP Morgan
likely to see through those tricks, and that can make
them even more cynical about the management Aside banks listed above, there were also hundreds of
goals and decisions. licensed micro-finance banks operating across the
country
Make-Up of the Nigerian Banking Industry
At the time of writing this report, the under listed were Nigeria’s Big Banks
the major money deposit banks operating in Nigeria. At end of Q3, 2017, the under listed were Nigeria’s big-
gest banks; together they controlled over 60% of the
a. Access Bank – acquired Intercontinental Bank industry’s assets.
b. Citibank
c. Diamond Bank
Net Asset Net Assets Balance Sheet

2017 2016 Balance Sheet Previous Year Deposits Loans PAT
S/N Bank N’ million N’ million N’ million N’ million N’ million N’ million N’ million
1 Zenith 767,690.00 690,908.00 5,131,818.00 4,649,685.00 3,062,214.00 2,155,749.00 129,335.00
FBN
2 Holdings 631,051.00 582,575.00 4,863,911.00 4,736,805.00 3,545,124.00 2,675,376.00 45,002.00
3 ETI 621,954.00 538,043.00 6,408,083.00 6,255,847.00 4,783,037.00 3,300,098.00 57,955.00

4 UBA 507,627.00 488,069.00 3,770,585.00 3,504,470.00 2,650,100.00 1,623,420.00 60,920.00
5 Access 505,243.00 454,495.00 3,540,894.00 3,483,866.00 2,247,623.00 1,849,216.00 56,395.00
6 GT Bank 581,909.00 504,903.00 3,212,944.00 3,116,393.00 1,970,942.00 1,428,244.00 125,578.00
7 Diamond 235,883.00 226,708.00 1,996,472.00 2,049,799.00 1,462,605.00 1,071,339.00 5,911.00
Stanbic
8 IBTC 168,911.00 140,798.00 1,417,733.00 1,053,523.00 813,773.00 384,956.00 37,672.00
9 Sterling 97,332.00 85,660.00 961,019.00 834,190.00 555,381.00 557,443.00 5,905.00
Methodology Data Presentation And Analysis

Data Sources and Methods of Collection Percentages were used to analyse the responses collated
Data was collected mainly through the medium of ques- while the Chi-Square method was used to test the hy-
tionnaires. These questionnaires were administered both potheses
electronically and in hard copy formats to 106 randomly
selected professional banking staff in the select financial Analysis of Questionnaire Responses
institutions, namely Zenith Bank Plc, First Bank Holding Question 1 sought to find out if the banks had an effec-
Ltd, United Bank for Africa Plc (UBA), Guaranty Trust tive budgeting and budgetary system. Over 87% of the
Bank Plc, and Access Bank Plc. At the end of Q3, 2017, respondents either strongly agreed or at least agreed that
these five banks controlled over 50% of the Nigerian their institution has an effective budgeting and budgetary
banking industry, in terms of asset size and in terms of control system whereas 9.43% either strongly disagreed
profitability. This implies that conclusions reached from and disagreed that their banks has an effective budgeting
this study can be said to be applicable to the generality and budgetary control
of the Nigerian banking industry.
The questionnaire employed mostly Likert scale style of

questions and thus Chi-Square was considered a suitable
method and applied to test the hypotheses formulated.
the respondents either strongly agree or at least agree

Question 4 was designed to assess how realistic and that budgets in their banks tend to be realistic and
achievable approved budgets are in the banks. 59.43% of achievable. 16.98% either strongly disagreed or disa-

greed that budgets in their organization are realistic and achievable
Question 7 assessed the level of budgetary control in the tored and compared against actual performance in their
banks. 84.91% of the respondents either strongly agreed organisations as against 7.55% that either disagreed or
or agreed that budgets are continuously reviewed, moni- strongly disagreed.
Questions 8, 11, 12, 13 & 14 sought to assess the impact

of rewards and punishments on the performance of indi- For 66.98 of the respondents, desire for bonuses and / or
vidual employees in the banks. 25.47% of the respond- promotion rather than fear of punishment are the main
ents either strongly agreed or at least agreed that failure motivating factors. 83.96% of the respondents are like to
to meet set deposit and profit targets are met with stiff work harder to achieve their deposit and profit targets if
sanctions where as 50.94% either strongly disagreed or there are incentives attached to meeting or surpassing the
at least disagreed. 19.81% agreed or strongly agreed that set targets; 55.66% of the respondents will still strive to
fear of punishment rather than desire for rewards was achieve their budgets even if there are no incentives at-
their main motivation for striving to attain their deposit tached. Only 19.81% will be unlikely to strive to achieve
and profit budgets as against 64.15% who disagreed or their deposit and profit budgets if there is no punishment
strongly disagreed

for those who fail to meet their deposit and profit budgets


Question 9 and 10 sought to assess some of the factors budgeting process. Only 47.17% of the respondents will
that motivate individual employees to strive to attain set be motivated to strive even harder to achieve set deposit
deposit growth and profit budgets. 64.5% of the re- growth and profit budgets if they perceive the targets as
spondents are likely to be more motivated to work harder unrealistic and hardly attainable
at achieving set budgets if they were involved in the

Question 15 was used to assess the key issue of the im- constant review and monitoring of approved budgets - is
pact of budgetary control on the overall performance of crucial to the overall performance of the organization.
the organization. A massive 91.51% strongly agreed or The results obtained here agrees with the results obtained
at least agreed that good budgetary control – including from the testing of hypothesis 1.
Testing of Hypothesis 1 Responses to question 15 on the questionnaire was used

to test hypothesis as shown below:
Ho1: Budgeting and budgetary control has no signifi-
cant impact on organizational performances in Nigerian
banks.

Outcome (O) Expected (E) O-E (O - E)2 {(O - E)2}/E
GTB 4 2 2 4 2
UBA 11 5.5 5.5 30.25 5.5
ZENITH 33 17.5 15.5 240.25 13.72857143
FIRST
BANK 20 10.5 9.5 90.25 8.595238095
ACCESS 29 16 13 169 10.5625
40.3863095
With significance level set at 95%, P=5%=0.05

Degrees of freedom = (rows – 1) * (columns - 1) Testing of Hypothesis 2
In this case, (5-1) * (2 – 1) = 4 Ho2: Budgetary control does not affect the performance
With 4 degree of freedom, critical value table score of individual performance of employees in Nigerian
is 9.49 banks
Decision: Responses to question 13 on the questionnaire was used

Test value > Table Value then REJECT H0 to test hypothesis 2 as shown below:
40.39 > 9.49 thus H0 is REJECTED
Outcome
(O) Expected (E) O-E (O - E)2 {(O - E)2}/E
GTB 4 2 2 4 2
UBA 8 4 4 16 4
ZIB 31 16.5 14.5 210.25 12.74242424
FBN 19 9.5 9.5 90.25 9.5
ACCESS 29 15.5 13.5 182.25 11.75806452
40.0004888
Decision
40.0 9.49 thus H0is REJECTED

c. Budgets in the banks are sometimes, but not always
Findings, Conclusion And Recommenda- realistic and achievable.
tions d. Banks mostly continuously monitor and review
Findings performance of approved budgets. This enables
From the survey carried out and the hypotheses tested, them to implement control measures in order to
the following are the findings. maximize the benefits of positive variances and
a. Banks in Nigeria mostly have an effective budget- mitigate negative variances.
ing and budgetary control system. e. Failure to meet set deposit growth and profit budg-
b. Management of Nigeria banks are mostly always ets are sometimes met severe punishments, such as
ready to provide necessary support and resources reduced salary, suspension, and / or termination of
needed to achieve approved budgets. employment. The use of punishments / sanctions to
push employees to improved performance only

achieves limited success however; evidence does motivated to work hard towards achieving ap-
not show that sanctions is a very effective way to proved budgets if they were involved in the budget-
achieve improved performance. Only 19.81% of re- ing process. Involvement leads to greater sense of
spondents agree or strongly agree that fear of pun- ownership leading to employees being more in-
ishment rather than desire for incentives is their spired and motivated to work harder.
main motivation for striving hard to achieve deposit b. The banks should use a fine balance of incentives
growth and profit budgets.Incentives and rewards (such as cash rewards, bonuses, and accelerated
work better. Evidence from the study shows that promotions) and / or punishments / sanctions (such
83.96% of the respondents are likely to work much as official reprimands, salary cuts, suspensions, and
harder to achieve their deposit and profit budgets if even terminations) to motivate employees to bring
there are incentives (monetary and / or promotion) out their best.
attached to meeting or surpassing the budgeted tar- c. More of incentives rather than punishments / sanc-
gets tions should be employed to motivate employees to
f. Goodbudgetary control – including constant review high performance. Most employees would be likely
and monitoring of approved budgets - is crucial to to work much harder to achieve their deposit
the overall performance of the organization. growth and profit budgets if there are incentives
g. The banks tend to mostly use either incremental (monetary and / or promotion) attached to meeting
budgeting approach, zero-base budgeting approach, or surpassing the budgeted targets
or a combination of the two approaches. d. When employees perceive budgets as unrealistic
h. For most of the banks, budgets are prepared annual- and unattainable, they are demotivated rather than
ly but budget and performance review meetings are motivated to strive hard to achieve approved budg-
held monthly ets. If deposit growth and profit budgets are too
i. For most of the banks, the budgeting process is ei- easy to attain however, the budget would not be
ther Bottom-Up / Top-Down or Top Down able to bring the best out of the employees. The
j. Most employees are likely to be motivated to work banks should ensure that budgets are such that are
harder at achieving their deposit and profit budgets not easy to attain but definitely not unattainable.
if they were involved in the budgeting process. e. Management of banks should ensure employees
have all necessary resources and supports (requisite
Conclusion training and materials) needed to actualize ap-
This study clearly shows that budgeting and budgetary proved budgets.
control have a very strong impact on the performance of f. Management of banks should ensure adequate
individual employees as well as on the overall organiza- communication of budgets and what is required to
tional performance of Nigerian banks. Indeed good employees. Employees should never be left in
budgetary control – including constant review and moni- doubt of what is required of them.
toring of approved budgets - is crucial to the overall per- g. Banks should continuously monitor the perfor-
formance of these organizations. mance of approved budgets. Actual performance
should be compared with budgets regularly. Prompt
The use of performance based incentives (such as cash actions should be taken to encourage/enhance ob-
rewards, bonuses, promotions, etc.) is a better way of served positive variances and/or mitigate/reduce the
achieving improved budget performance of individual impact of observed negative variances.
employees rather than the use of punishments / sanctions
(such as salary cuts, suspensions, and outright termina- References
tions). While the use of sanctions is not to be entirely 1.] Association of Accountancy Bodies in West Africa
ruled out, the banks need to strike a good balance be- (2016). “Public Sector Accounting for Accounting
tween the use of incentives and uses of sanctions, in or- Technicians Scheme of West Africa”
der to achieve a very high budget performance. High
budget performance of individual employees mostly 2.] BPP Learning Media Ltd (2009). “ACCA Paper F2
automatically also dovetail into high organisational per- Management Accounting”
formance.
3.] BPP Learning Media Ltd (2015). “ACCA Paper
Recommendations P5Advanced Performance Management”
Based on the findings from this study, the following rec-
ommendations are made: 4.] Chartered Institute of Management Accountants
a. Management of banks in Nigeria should as much as (2005), “Management Accounting Official Termi-
possible have the bulk of the employees involved in nologies”
the budgeting process. Employees are likely to be

5.] Chartered Institute of Management Accountants 13.] “Objectives of Budgetary Control”. Retrieved 15th
(2006), “Budgeting Gateway Series No.27.” Re- July, 2017 from
trieved 8th October, 2017 from http://www.tutorsonnet.com/introduction-objective-
http://www.cimaglobal.com/Documents/ImportedD of-budgetary-control-homework-help.php
ocuments/cig_tg_budgeting_mar08.pdf
14.] Sarrkissian, A. (2017). “What is Strategic
6.] Chartered Institute of Management Accountants Roadmap?”. Retrieved 12th September, 2017 from
(2007), “Beyond Budgeting Gateway Series https://yourbusiness.azcentral.com/strategic-
No.35.” Retrieved 8th October, 2017 from roadmap-14662.html
http://www.cimaglobal.com/documents/importeddo
cuments/cid_tg_beyond_budgeting_oct07.pdf 15.] Sherman, F. (2017). “Behavioural Aspects of
Budgeting in Managerial Accounting”. Re-
7.] Egbunike, P.A (2014). “Management Accounting: trieved 3rd February, 2018 from
Techniques and Applications”, Revised Edition, https://bizfluent.com/info-8561309-behavioral-
Onitsha. Frances New Dawn. aspects-budgeting-managerial-accounting.html
8.] Institute of Chartered Accountants of Nigeria 16.] Siyambola, T. T. (2013). “The Impact of Budgeting
(2015). “Public Sector Accounting and Finance” and Budgetary Control on the Performance of
Study Pack Manufacturing Company in Nigeria”. Journal of
Business Management and Social Sciences Re-
9.] London School of Business and Finance (2015). search (JBM&SSR) Vol. 2, 12, 2319-5614. Re-
“ACCA Paper P3 Business Analysis Class Notes” trieved 15th July, 2017 from
http://www.borjournals.com/a/index.php/jbmssr/art
10.] London School of Business and Finance (2015). icle/view/305
“ACCA Paper P5 Advanced Performance Man-
agement Class Notes” 17.] Wikipedia (2018). “Budget”. Retrieved 3rd Febru-
ary, 2018 from
11.] McLeod, S. A. (2014). “Aims and Hypotheses”. https://en.wikipedia.org/wiki/Budget
Retrieved 6th January, 2018 from
www.simplypsychology.org/aims-hypotheses.html 18.] Wikipedia (2018). “List of Banks in Nigeria”. Re-
trieved 3rd February, 2018 from
12.] Nairametrics (2017) “How Nigerian Banks Rank in https://en.wikipedia.org/wiki/List_of_banks_in_Ni
Terms of Deposits, Balance Sheet Size, ROE, etc.” geria
Retrieved 3rd February, 2018 from
https://nairametrics.com/nigerian-banks-rank- 19.] https://en.wikipedia.org/wiki/List_of_banks_in_Ni
terms-deposits-balance-sheet-size-roe-etc/ geria

APPENDIX 1 – RESEARCH QUESTIONNAIRE
1. My organization has an effective budgeting and budgetary control system

Strongly disagree
Disagree
Neutral
Agree
Strongly agree
2. Approach to Budget preparation

Tick as appropriate
Incremental budgeting: basing the budget on that of the previous period, while adjusting for
inflation and expected growth by a percentage increase.
Zero-Base budgeting: the budget starts from a base of zero for each period, Budgets for pro-
posed activities are assessed and prioritized (in relation to the company’s activities) and allocat-
ed funds in order of priority
Judgmental budgeting: Solely determined based on what is ‘felt’ to be the appropriate budget.
None of the above (Specify you company’s approach)

…………………….………………………………………………
…………………………………………………………………….....
………………………………………………………………………..
3. Budgeting Process
Tick as appropriate
Bottom-up budgeting: Managers of each departments work out their own budget and these are
combined to establish the company’s total budget
Bottom-Up/Top-Down budgeting: Managers of each department submit budget requests,
which are combined and presented to top management, who adjust the total budget to conform
with overall goals and strategies
Top-Down budgeting: The total size of the Company’s budget is established by top manage-
ment, then budget is divided between departments or divisions
Top-Down/Bottom-Up budgeting: The top management work-out the total size of company’s
budget, then budget is modified by managers of each departments. The modified budget is then
resubmitted to management for approval
None of the above (Specify you company’s approach)

………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
4. Budgets in my organization are always realistic and achievable

Strongly disagree
Disagree
Neutral
Agree
Strongly agree

5. Frequency of budget review meetings (i.e. meetings to review actual performance against approved budgets)
Daily
Weekly
Monthly
Others (Specify)………………………………………………………………
6. Management is always ready to provide all resources and support needed to achieve set budgets
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
7. Budgets are continuously reviewed, monitored and compared against actual performance
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
8. Failure to meet set deposit and / profit budgets are always met with severe punishment (reduced salary, suspen-
sion and / or termination of employment)
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
9. I am likely to be motivated to work harder at achieving my deposit and profit budgets if I was involved in the
budgeting process
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
10. If I perceive my deposit and profit budgets as unrealistic and hardly attainable, I am likely to work even harder in
bid to attain the targets
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
11. Fear of punishment rather than desire for bonuses and promotion is my main motivation for striving to meet ap-
proved deposit and profit budgets.
Strongly disagree
Disagree
Neutral
Agree
Strongly agree

12. Desire for bonuses and promotion rather than fear of punishment is my main motivation for striving to meet my
budgeted targets.
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
13. I am likely to work much harder to achieve my deposit and profit budgets if there are incentives (monetary and /
or promotion) attached to meeting or surpassing the budgeted targets
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
14. I am unlikely to strive to achieve my deposit and profit budgets if there is no punishment for those who fail to
meet their deposit and profit budgets
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
15. Good budgetary control – including constant review and monitoring of approved budgets - is crucial to the over-
all performance of the organization
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
16. Job function of the respondent

Marketing / Profit centre
Operations / Other cost centre
Others (Specify) ………………………………………………… …………
17. Which organization do you work for

Access Bank
First Bank
GT Bank
UBA
Zenith Bank
Others (Specify) ………………………………………………… …………
18. I would like to receive a copy of the survey report

Yes
No
Medium of delivery (e-mail address) ………………………………… …………

APPENDIX 2 – ANALYSIS OF RESPONSES TO THE QUESTIONNAIRE
Question / Respons- Strongly Neu- Strongly disa-

S/N Agree Disagree TOTAL REMARK
es / Percentages Agree tral gree
My organization has
an effective budgeting
1 42 51 3 2 8 106
and budgetary control
system
Percentages 39.62 48.11 2.83 1.89 7.55 100.00
Budgets in my organ-
ization are always Strongly Neu- Strongly disa-
4 Agree Disagree TOTAL REMARK
realistic and achieva- Agree tral gree
ble
Responses 10 53 25 14 4 106
Percentages 9.43 50.00 23.58 13.21 3.77 100.00
Management is al-
ways ready to provide
Strongly Neu- Strongly disa-
6 all resources and sup- Agree Disagree TOTAL REMARK
Agree tral gree
port needed to
achieve set budgets
Responses 20 53 23 6 4 106
Percentages 18.87 50.00 21.70 5.66 3.77 100.00
Budgets are continu-

ously reviewed,
7 monitored and com- Agree Disagree TOTAL REMARK
Agree tral gree
pared against actual
performance
Responses 40 50 8 3 5 106
Percentages 37.74 47.17 7.55 2.83 4.72 100.00
Failure to meet set

deposit and / profit
budgets are always
met with severe pun- Strongly Neu- Strongly disa-
ishment (reduced sal- Agree tral gree
ary, suspension and /
or termination of em-
ployment)
Responses 5 22 25 39 15 106
Percentages 4.72 20.75 23.58 36.79 14.15 100.00

I am likely to be mo-
tivated to work harder
at achieving my de-
9 posit and profit budg- Agree Disagree TOTAL REMARK
Agree tral gree
ets if I was involved
in the budgeting pro-
cess
Responses 15 53 23 13 2 106
Percentages 14.15 50.00 21.70 12.26 1.89 100.00
If I perceive my de-
posit and profit budg-
ets as unrealistic and
10 hardly attainable, I Agree Disagree TOTAL REMARK
Agree tral gree
am likely to work
even harder in bid to
attain the targets
Responses 7 43 17 20 19 106
Percentages 6.60 40.57 16.04 18.87 17.92 100.00
Fear of punishment
rather than desire for
bonuses and promo-
11 tion is my main moti- Agree Disagree TOTAL REMARK
Agree tral gree
vation for striving to
meet approved depos-
it and profit budgets.
Responses 4 17 17 48 20 106
Percentages 3.77 16.04 16.04 45.28 18.87 100.00
Desire for bonuses

and promotion rather
than fear of punish-
12 ment is my main mo- Agree Disagree TOTAL REMARK
Agree tral gree
tivation for striving to
meet my budgeted
targets.
Responses 21 50 24 8 3 106
Percentages 19.81 47.17 22.64 7.55 2.83 100.00

I am likely to work
much harder to
achieve my deposit
and profit budgets if
there are incentives Strongly Neu- Strongly disa-
(monetary and / or Agree tral gree
promotion) attached
to meeting or surpas-
sing the budgeted
targets
Responses 40 49 13 1 3 106
Percentages 37.74 46.23 12.26 0.94 2.83 100.00
I am unlikely to strive
to achieve my deposit
and profit budgets if
there is no punish- Strongly Neu- Strongly disa-
ment for those who Agree tral gree
fail to meet their de-
posit and profit budg-
ets
Responses 4 17 26 45 14 106
Percentages 3.77 16.04 24.53 42.45 13.21 100.00
Good budgetary con-

trol – including con-
stant review and mon-
itoring of approved Strongly Neu- Strongly disa-
budgets - is crucial to Agree tral gree
the overall perfor-
mance of the organi-
zation
Responses 59 38 3 1 5 106
Percentages 55.66 35.85 2.83 0.94 4.72 100.00
0
Judg
men-
Approach to Budget Incremental Zero-Base None of the Combination of
2 tal Total
preparation budgeting budgeting above 2 or 3 methods
budg-
eting
Responses 64 31 9 2 106
Percentages 60.38 29.25 8.49 - 1.89 100.00

Bottom- Top- Top- None of the

Bottom-up Up/Top- Down Down/Botto above (Specify
Budgeting Process Total
budgeting Down budg- m-Up budg- your compa-
budgeting eting eting ny’s approach)
Others - com-
3 Responses 11 38 43 12 2 106 bination of 2 or
3 methods
Percentages 10.38 35.85 40.57 11.32 1.89 100.00
Frequency of budget
review meetings (i.e.
meetings to review Mont Others
5 Daily Weekly Total
actual performance hly (Specify)
against approved
budgets)
Responses 2 15 68 18 103
Percentages 1.94 14.56 66.02 17.48 - 100.00
Oth-
Marketing / Operations
Job function of the ers
16 Profit cen- / Other cost Total
respondent (Spec-
tre centre
ify)
Responses 49 51 3 103
Percentages 47.57 49.51 2.91 - - 100.00
Which organization Access GT

17 First Bank UBA Zenith Bank Total
do you work for Bank Bank
Responses 33 22 4 12 35 106
Percentages 31.13 20.75 3.77 11.32 33.02 100.00

Appendix 3 – Summary of Individual Bank’s Responses to Question 15
INSTITUTION AGREE DISAGREE NEUTRAL TOTAL

GTB 4 0 0 4
UBA 11 0 1 12
ZENITH 33 2 0 35
FIRST BANK 20 1 1 22
ACCESS 29 3 1 33
TOTAL 106
Appendix 4 – Summary of Individual Bank’s Responses to Question 13
INSTITUTION AGREE DISAGREE NEUTRAL TOTAL

GTB 4 0 0 4
UBA 8 0 4 12
ZENITH 31 2 2 35
FIRST BANK 19 0 3 22
ACCESS 29 2 2 33
TOTAL 106


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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614

Volume 7, No.6, June 2018

Impact Of Budget And Budgetary Control On Employee And

Keywords: Budget, Budgetary Control, Performance, Nigerian Banks

Introduction a basis for its revision’. Budgetary control involves: es-

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

Indian budget. Finance Minister is the head of the budget

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

Planned, Programming and Budgeting Systems:

© The Author Blue Ocean Research Journals

Target Incremental targets Stretch goals

Fixed incentives Relative target & rewards

Planning and Control Fixed Continuous planning

Variance controls KPI’s and rolling forecast

Resources & Coordination Pre-allocated resources Resources on demand

Central co-ordination Dynamic co-ordination

Organisational Culture Central control Focus on value creation

Management of the numbers Front line authority

Rewards Individual departments have Viewed as one team

© The Author Blue Ocean Research Journals

therefore are unwilling to Break down barriers with

Benefits of Beyond Budgeting c. Improves quality of decision since managers are

© The Author Blue Ocean Research Journals

Net Asset Net Assets Balance Sheet

S/N Bank N’ million N’ million N’ million N’ million N’ million N’ million N’ million

1 Zenith 767,690.00 690,908.00 5,131,818.00 4,649,685.00 3,062,214.00 2,155,749.00 129,335.00

3 ETI 621,954.00 538,043.00 6,408,083.00 6,255,847.00 4,783,037.00 3,300,098.00 57,955.00

© The Author Blue Ocean Research Journals

4 UBA 507,627.00 488,069.00 3,770,585.00 3,504,470.00 2,650,100.00 1,623,420.00 60,920.00

5 Access 505,243.00 454,495.00 3,540,894.00 3,483,866.00 2,247,623.00 1,849,216.00 56,395.00

6 GT Bank 581,909.00 504,903.00 3,212,944.00 3,116,393.00 1,970,942.00 1,428,244.00 125,578.00

7 Diamond 235,883.00 226,708.00 1,996,472.00 2,049,799.00 1,462,605.00 1,071,339.00 5,911.00

9 Sterling 97,332.00 85,660.00 961,019.00 834,190.00 555,381.00 557,443.00 5,905.00

Methodology Data Presentation And Analysis

The questionnaire employed mostly Likert scale style of

the respondents either strongly agree or at least agree

© The Author Blue Ocean Research Journals

greed that budgets in their organization are realistic and achievable

Questions 8, 11, 12, 13 & 14 sought to assess the impact

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

Testing of Hypothesis 1 Responses to question 15 on the questionnaire was used

© The Author Blue Ocean Research Journals

Outcome (O) Expected (E) O-E (O - E)2 {(O - E)2}/E

UBA 11 5.5 5.5 30.25 5.5

ZENITH 33 17.5 15.5 240.25 13.72857143

ACCESS 29 16 13 169 10.5625

With significance level set at 95%, P=5%=0.05

Decision: Responses to question 13 on the questionnaire was used

40.0 9.49 thus H0is REJECTED

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

© The Author Blue Ocean Research Journals

APPENDIX 1 – RESEARCH QUESTIONNAIRE

1. My organization has an effective budgeting and budgetary control system

2. Approach to Budget preparation

None of the above (Specify you company’s approach)

None of the above (Specify you company’s approach)

4. Budgets in my organization are always realistic and achievable