BUDGETING PERFORMANCE IN FINANCE

ORGANIZATION (IN CASE OF GEDEBANO

GUTAZER WELENE WOREDA)

BY:- ABDULJUWAD MOHAMMED

ADVISOR:- ESHETU YADCHA

A RESEARCH PAPER SUMITTED IN

PARTIAL FULFILLMENT FOR REQUIREMENT
OF BA DEGREE IN ACCOUNTING

JIMMA UNIVERSITY
COLLEGE OF BUSINESS & ECONOMICS
DEPARTMENT OF ACCOUNTING

MAY, 2012
JIMMA, ETHIOPIA
 Acknowledgment
First of all I would like to express my thanks to almighty to Allah for Nothing I have
ever done without his gracious also goes to may advisor to MSc. Eshtu Yadcha for his
valuable activity, suggestion and comment in accomplishment of this research paper.

My special thanks goes to my families “HF” for their morale support in all activity. At
last, but not least, I would like to thank W/ro Fitsum Asrat for her diligent work in typing
this research paper.

I
 Abstract
In this study, the effectiveness of GDEBANO GUTAZER WELENEWERAD finance
organization will be assessed in detail. The organization overall performance may depend
on both properly designed proposal and its active implementation. The effectiveness of
the budgeting system of the organization would assessed with the light of getting possible
solution after less of effective budgeting system coordination and communication. To
conduct this study primary and secondary data collected and analyzed accordingly.

Form these study the GEDEBANO GUTAZER WELENE WEREDA ECONOMIC

finance organizing faces several problem such as inappropriate budget allocation shortage
of fund from higher bodies of government budget are not planned accordingly and budget
deficit occure with in the organization in order to solve these problem. The responsible
manager be aware of principle of effective budgeting system, effective estimating,
projecting, time coverage for future budgeting cycle coordination and communication,
developing clear budgeting guide line and etc.

II
 Table of content
Acknowledgment..................................................................................................................I
Abstract...............................................................................................................................II
Table of content.................................................................................................................III
Chapter one..........................................................................................................................1
1. Introduction......................................................................................................................1
1.1. Back ground of the study..........................................................................................1
1.2. Statement of the problem..........................................................................................3
1.3. Objective of the Study..............................................................................................4
1.3.1. General Objective..............................................................................................4
1.3.2. Specific Objective..............................................................................................4
1.4. Significance of the study..........................................................................................4
1.5. Scope of the study.....................................................................................................5
1.6. Limitation of the study..............................................................................................5
Chapter Tow........................................................................................................................6
2. Literature review..............................................................................................................6
2.1. The need of budgeting..............................................................................................8
2.2. Budget and budget cycle.........................................................................................10
Chapter Three....................................................................................................................14
3. Methodology..................................................................................................................14
Source of data............................................................................................................14
Method of data collection..........................................................................................14
Method of data analysis.............................................................................................15
Chapter Four......................................................................................................................16
4. Result analysis and discussion.......................................................................................16
Chapter Five.......................................................................................................................27
5. Conclusion and Recommendation.................................................................................27
5.1 Summary..................................................................................................................27
5.2 Recommendation.....................................................................................................29
REFERENCE............................................................................................................30
Appendix....................................................................................................................31

III
 Chapter one
1. Introduction

1.1. Back ground of the study

Every organization has some types of plane that in relation is called budget provide
measurement of finance result organization expect from its planed activity budgetary
performance of the organization against many problem. Such as budget delicate an equal
distribution budget etc. Hence the should be an inventing effort to minimize budge deficit
to get closer to solution and understand & why budgeting performance are assess on the
organization. This study will attempt to give an inclusive answer. It should why budget
performance is needed.
Budget is the means of coordination and implementation purpose among the various unit
of the organization since budgeting means established objective are to be accomplished.
Also budget play very grate in motivation because of its goal setting properties and goals
setting is related to performance as individual set higher performance goals and actual
performance level generally increase. It the budge is used properly it coalser as
performance goals and there for can be significant doctor in motivation.
Most of the time budget desction show be controlled by finance organization and
periodical performance but taking this case into account there a page cared with
organization ale system which hindered its fulfillment frame organization opining view it
is important to balance inventory again demand of capital budget and or liner budget
considering avoid ability of budget at right place support. The organization objective,
customer, service, production profit and return of investment. This is true in wholser.
Retailer education are organization. But all need adequate budgetary performance
management. Budgetary performance should be consistent with the finance organization
utility the planned budget accordingly.

1
1.1. Back ground of the organization

The GEDEBANO GUTAZER WELENE WEREDA ECONOMIC a located in southern

part of Ethiopia. The area has estimated surface area of since 1984. But correctly starting
date and moth is not known. The organization has started from the objective of
performing activity collection of revenue from different source such. As tax from traders
from salary of employees and controlling rent form the farmers for the first time the
organization started its activity with employees through participation in different activity.
But also this time the organization has 35 number of human resource with different level
of education. Years of experience and professional out of 35.19 are male and 16 are
female out of. This 19 are 3 have BA degree 13 have diploma 3 have certificate (10+2).
Out of 16 female 9 of them have diploma and 7 of them are participating certificate.

Currently activity of the organization are making decision write evolution of budget for
each sector found in the woreda it checks the organization financial and property account
record and implementation neither they are implementing on the rule and regulation of
the organization or not. If also collected revenue of the organizing at proper time from
different sources.

2
1.2. Statement of the problem

The organizational over all performance depends on both properly designed budge
proposal and it active implementation.

The organization always prepare annual budget for the current year a activity determine.
The organization always prepare annual budget for current year activity. To determine
the organization survival also; budget is quantitative brining used to control activities and
it implementation Budget is quantitative expression for the seate of time period and
proposed future plane of action by management.
The purpose for budgeting should guide for the time period chose for the budget. to
implement this planning & budgeting control are prepare for materials need material
purchase & desired inventory level. The organization must plane the amount of budget
that should be on hand at the begning of the period. The budget is mostly prepared &
allocated by higher official and periodical performance are also evaluated by them for the
organization.
The concerng these study to examine the budgetary performance in the particular area of
GEDEBANO GUTAZER, WELENE WERDA finance organization. This are why
organization has many problem related to budget so bossed on this study the following
basic question may get answer.
1. Are they using the budget as planning controlling mechanism?
2. How to asses budget utilization on the weredas finance organization?
3. What are the factor affect budgetary perform?
As it has impact on planning and controlling purpose are they performer this budget as
per standard?
Generally cash budgeting problem of GEDEBANO GUTAZER WELENE WEREDA
ECONOMIC & finance bureau may solve through this study.

3
1.3. Objective of the Study

1.3.1. General Objective

The main & general objective of my research paper is to examinant & give a
comprehensive picture of the factor affecting budgetary performance & to know their
effectiveness and weakness to acquire a possible solution to the problem identify.

1.3.2. Specific Objective

 Indicate the organization how to manager their budget properly.

 To evaluate the budget efficacy and effective ness.
 To identify the factor affecting budgetary performance.
 To evaluate budget use for performance measurement appraisal.
 To know their effective manipulation as per the planned budget.
 To give suggestion and recommendation on the over all out outlook of the budget.

1.4. Significance of the study

After this study accomplished the responsibility manager will a ware of;
 Effective budget principle and effective estimating
 Coordination and communication through ought budgeting process.
 Developing clear budgeting guide line.
 To examine the face or that effecting the budgeting performance in the
organization.
 It help to identify ways and means by which the organization budgeter
performance improved to best leveled expectation.
 Established alike between the budget process goals and objective.

4
1.5. Scope of the study
The budget performance would held on both primary and secondary source data. primary
data have collected from those departmental manager that are participated in budgeting
process and secondary data. Have collected from recorded document in the organization
about the preparation of budget.

Primary data would collected with boundary of

 Principles of effective budget.
 The lengthy of their budget period.
 Participation of employee in the preparation of budget and others also include.
 Secondary data have used for understanding of their effective implementation i.e
by looking of their trend of budget implementation.

1.6. Limitation of the study

Since the study have conducted within a short period of time shortage of time is the major
limitation of the study. This constraint in forced me to collect data from smaller sample
size in addition to this financially allocated amount was not enough to carry out. This
study properly. Also the following problem were faced me in conducting my research
paper and collecting data.
 Lack of respondent knowledge about financial activity.
 Lack of sufficient material from the expected organization as well as published
materials.
 Shortage of stationery
 Lack of experience doing research.

5
 Chapter Tow

2. Literature review
A budget is detail, plan expressed in quantitative term that specifies ho will be acquired
based using specific pervade. A budget is quantities period expression of proposed plan
of action by management of specific period of time (lliltion) and an aide to coordinating
what to be done implement the plan and service as ablue print for the company to follow
up coming period.

A budget is as primly plane or specific management action are needed to make its
reliability. A budget is planning decrement created before anticipated transaction occur.
The primary objectively budget is to forcast future financial & non-financing transaction
and events. The second objective to developed information that is accurate and meaning
full to receipts as possible. To a accomplished these objective budget should present
information in an ordinary matter, (Anderson page 225).

Budget is preparation is also excellent vecheale with which to worked with all supervised
personnel by requesting their in put and suggestion, once developed budget provide
operating target for managers and their staff, at the end the price budget help managers to
performance located and provide solution problem area. The budget analysis should be
regular and on going part of managers. In fact budgeting become even more important
when JIT or Total equality Management (TQM) concept and technique are applied and
Establishing on effective. Budget processes is the key to success full business venture
without full color donating budgeting system (Anderson page 224).

Budget system budget are synonym with managing activity of an organization. The term
organization is important because budget used in non-profit or organization as well as
profit oriented business. All type of organization rely plan to help and accomplished their
objective. All types of organization have mangers whose responsibility are determined by
top managers or board of director so budge are used to plan and assess. These area of

6
responsibility and to measure managers performance, budget preparation on half
managers focused on the next month or the entire coming month. (Anderson) .
Budget is a power full management tools which is used to accomplish four major
objective

1. Planning 3. motivating
2. Coordinating 4. controlling
The budget is planning tool A planning tool that represent the expected result of
operation for the coming year and those it is away of formulating and expressing in the
dollar term the objections of an organization and the operation plan for achieving these
objective. The budget is coordinating tool that this summarized in the form of Performa
financial statement for an organization and thus it is together the financial marketing and
production. Activity of all of the department and division which make up the
organization.

Budget is used to motive manger by providing explicitly goals by involving mangers in

the planning and goes setting process through which the budget is developed and by
providing reward and or gin ally provide yardstick for comparing actual result with the
organization planned objective & thus it is basis when the actual result are un satisfactory
(fisher 447).

Procedure

The procedure used to develop budget constitute budgeting system. This budgeting
system have five primary procedure.
1. Planning 2. Facilitate communication & coordination 3.Allocating resource
4. Controlling 5. Evaluating performance & provide incentive.

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1. Planning
The most obvious purpose of a budget is quantity a plan of action the budgeting
process force individual who make up organization to plan ahead (Hilton).
Planning is setting a goal and developing strategies to achive these goals. Budget
show how resource will be developed to implement strategy (Horengan page 177).

2. Facilitating Communication and Coordination

For any organization to be effective each manager through out the organization must
be aware of plan made other manager. The budgeting process pulls to get here plane
of each managerian organization (Hilton).
Coordination in balancing all of production and department and business function is
the best way for the company to meet its goals.
Communications gating those goal to be understand and accepted by an employees
(Horengen 178).
3. Allocating Resource
Generally any organization resource are limited and budget are provide means of
allocating resource among competing uses (Hiltone)
4. Controlling
Never the less budget serves as use full be anchmarket with which actual result can
be compared (Hillition)
5. Evaluating Performance And Providing Incentive
The 1st thing to be budgeted in revenue budget. This because the production level and
inventory level and any cost are depend on forecasted level of unite sales or revenue.
Then production inventory. Costs of good sold and income statement will be
budgeted respectively (Horngern page 183).

2.1. The need of budgeting

1. To aid establishing procedure for preparing companess planned revenue and
costs
2. To aid coordinating and communicating these plane to various level
management.

8
 3. To formulate the bases for effective revenue and cost central.

Type of budge
1. Budgeted financial statement: the budget show how the organization financial
statement will appear in specified time. If the operation procedure according to plan
includes budgeted income statement budgeted balance sheet and budgeted cash flow.
2. Capital budget is plane for acquisition capital asses such as building and equipment.
3. Rolling budget:- are continually up dated by periodically adding anew incremental
time period completed. They also called revolving or non-continuing budget.

Basic Principle of Budget

Preparation of organization budget important to its success three reason.
1. Preparing budget for management to look head and plane both long range and short
rage goals and event.
2. The entire management team must work together to move and carry out plan.
3. By comparing the budget with actual result and it is possible to review performance
of all level of management.
1) Long Range Goal Principle
Annual operating plan cannot be made unless those preparing the budget to knew the
direction that top management expect for the organization long Range goal project
covering give five to ten year period must be set by top management (Anderson page
229).
2) Short Rangoate and strategies principle
One management has set the short Range goal the controller or budge director take
change preparing budget these a person designs a complete set of budget development
plans and time with dead line for all level parts of the year operating play.
3) Human responsibility and interaction principle.
First the section of budget director (and if staff it necessary) very important to an
effective budget system. This person must be able to communicate with people both
above and below in the organization hierarchy. Second we have mention that all

9
participant should be identified and informed of these responsibility, full budget
communication in our final process in transaction principle (ANDERSON 229). In
particular budget must be communicated clearly to the participant each one. This people
playing. As part in developing the budget and implementing effective budget then require
participative budgeting.

4) Budgeting follow up principled

Since the budget consists of projections and estimate it is important that it be checked and
corrected continuously it is more sense to correct and error then to work with guide
budget following and data feed back are part of control. Aspect of budgeting cost
organizational or departmental expectation can also be unrealistic. Such problem are
detected when performance report compare actual result with budgeted result. This report
are back bone of the responsibility accounting system. The budget cycle completed after
sanction to problem are identified from. The performance report and data are restricted to
become target or goals of the next budgeting cycle and lesson Anderson (2331).
This budget used by common accounting company for planning and controlling what
they have to do and what they done to satisfy. Their customer and successes in market
place budget provide a measure of the financial result what company expect from its
planned activities.

2.2. Budget and budget cycle

We mange organization through the following budgeting steps
1. Planning and performance of organization as a hole as well as planing the
performance its sub unit division. Management at all level a green what expect
(Norgrane 176).
2. Providing set of reference set of specific expect skill against which actual
result can be completed.
3. Planning organization in alight of feedback and change condition manger
spend in big part of their time in preparing budget & analyzation budge
(Hilliton).

Coordination and communication

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Coordination Balancing and Bleaching all factor of production or service in all
department and business function in the best way for the company meet its goal. Budget
also takes up a lot of management time. Top management want love level management to
participate in the budget process because low level has voluble knowledge about. The day
to data specify running the business participation crate greater commitment and
responsibility towards. The budget among low level managers (Horgran).

Budget or financial plan

Company annual plan is called budget. The budget is asset of perform written statement
management expectation. Regarding seals expense production volume and various
financial transaction of firm for coming period, simple put budget is set of Performa
statement about companies financial and operation. A budget is tool both planning and
control at the banging of the period. If service as control device to help management to
measure the firms performance against. The plant to ensure future performance may be
improved (shooms).

The extent to which the various manager use their performance reports depends on many
factor some behavioral and some technical. One important factor in the extent to which
the performance report serves the management decision making a need of use.

Communication is asutable management probleme and it is facilitated by performance

report if the deferent need experiences of the users are taken in to the account.

Budget is detaik place expressed in qualitative terme that specifies how an organization
will a quire and use resource during particular period of time and use resource during
particular period of time the procedure used to develop budget constitute a budgeting
system. Budgeting system have five primary purpose planning. Facilitating, commutation
and coordination locating resource, managing financial and irrational performance and
provide incentive.

11
There is perhaps on other area of management were the behavior are more important than
budgeting. The idea of participative budgeting to involve employees through out an
organization in the budgetary process.

Budget and budgeting participation

Budget and budgeting process are used to identify the most efficient allocation of
corporate resource and to provide planning and control mechanism over funds flow.
Corporate manager use several types of budget in planning and exiting the firms
operations. Financial manager combine these budget in order to estimate their
corporation.

Financial manger combine these budgets in order to estimate the corporations fund flows,
profitability, and financial conduction over a given, planning period. A cash budget is a
for cast of a firms each inflows and outflow over a designated planning period. The
budget helps to identify a period of cash surplus as well as periods during which
additional financing will be needed. Thus budget helps the financial manager to measure
the amount and duration of each shortages and to prepare repayment schedules if cash
shortages are to be financed with borrowed funds.

Advantages of budgeting cash

 It serves as an integrative analytical tool for the corporation. The individual
components that produce cash budget inflows and outflows are brought together
and their over all impact on corporate cash flow can be estimated.
 Cash budget estimates the occurrence, amount and duration, cost and repayment
schedules for any needed financing.
 Cash budgeting forecasts the occurrence, amount and duration of cash levels over
and above the minimum desired end of month cash balances (Raymond p. Neveu
1985,p.96).
Advantage of budge
 Compares strategic planning and implementations of plans
 Provides a framework for judging performance

12
  Motivate managers and employees
 Promotes coordination and communication among subunits with in the company.
 Provides success the company’s goal of objectives (HORNGREN, 177).

Applicability of Budgeting and Budgetary Control

Budgeting can be applied to virtually every situation. It does not matter whether work in
the public or private sector of the economy. We may work for profit making business or
in a non-profit making business.

In order for a business to remain competitive and to progressive or even in some case to
service more information is about the economic environment in which they operate. More
information is about needed on day to day. Effectively communicated is the life blood of
any organization it is the basis on which management must make a decision.

13
 Chapter Three
3. Methodology
Source of data
This study to the variable over which the data for the study were collected and method
that used in data collection analysis and inter predation.
Source of data for the purpose of meting and combining the list objectives the data has
gathered fume for both primary and secondary source of information. The primary data
has collected from individual who had relation with budget. The reason that need to
collected select idea is because each employee of organization done have the knowledge
about budget preparation.
Secondly source are Recorded frame document and past data about budget because. This
types of sources of information recant search cost and also preferable to checking. This
effectives or implementation to standard.

Method of data collection

The researcher would have been both primary and secondary data collection tool primary
data collection to used to collect from primary source. Has collected by distributed
questionnaires for selected person in the organization.
Secondary data will be obtain from different manner document and related review. The
organizations record procedure and utilization of budget figure of dissident finance
administrative department of the organization. But since the research is highly
dependable on primary source of data. All source on it there her collected by using
document of past data about the standard of budget and real result.

Sampling Technique
Sample selection carried out by are searcher. So that is reliable as to the representation of
the total population who are believed to be high civil servant to the finance organization.
The researcher there for focused on specific target group by using random sampling
technique method to acquire the necessary information. From respondents and to make

14
unaware investigation. For the current study. Taking this in to account on factory it is
necessary to use personal judgment. Since it is difficult to determine how large the
population is so the sample size had used from finance department 5 people selected from
cost and budget department 4 people had selected from planning and data organizing
department 3 people had selected and from audit and internate control department 6
people had selected.

Method of data analysis

After processing classifying data analysis has been made. In this study data has been
analyzed and interpreted using different methods . Those methods include tabulation and
percentage has been.

15
 Chapter Four
4. Result analysis and discussion
These part deals the major finding of the study. For the analysis simplicity department.
Cost and budget department, planning and data organizing department and audit and
internal control department are put together.

1. Respondent department with in the organization

Type of department No of respondent Percentage
Finance department 6 33.3%
Audit and internal control 3 16.67%
department
Planning and data organizing 5 27.7%
department
Cots and budget department 4 22%
Total 18 100

Table 1 Indicate the respondent department from the above out of 18 respondents
5(27.7%) of respondent are assigned in finance department 6(33.3$%) of the respondent
are in audit and internal controlled department similarly other department i.e cost and
budget department planning and data organizing department are assigned 5(27.7%) and
4(22%) respectively.
Used tabulation has been used to arrange data in table or other summary formate to
facilitate the process of comparison. Various data analysis has been made by the help of
descriptive data from the above table out of total 18 respondent 7(38.89%) of respondent,
major factor affecting the organizational budget formic is an appropriate budget
allocation. The organizational employee majorly focused on response in appropriate
budget not planned accordingly with in the organization.

The second factor affect the budgetary performance of organizational shortage of fund
3(16.67%) of the respondent that shortage of fund is one of the factor affecting the
organization budgetary performance. That means the higher periodic are performance
higher authority doesn’t distribute fund accordingly.

16
The tired factor affect budgetary performance are employees 3(16.67%) of the respondent
responses that employee are factor that affecting organizational budgetary performance
i.e by forming in participation of their specific job accordgly because of these reason
organizational work facilities law and recording revenue and expenses is not accurately
recorded on time even transfer of one account to another out is not transferred correctly.
Fourth, factor is organization are manager 2(11.11%) of the respondent said that
organizational manager is one factor that are affecting the budgetary performance of the
organization.
Such as by not participating at budgeting time and he/she does not control the employee
of the organization effectively.
Also absence of effective communication and discussion between the manage and
employee. The others factor that affect budgetary performance of the organization is
stated as follow in short
 Law coordination between the employee
 The organization doesn’t adopt good budgeting system
 Shortage of professionally employee.
 Unnecessary use of budget
not of respondent percentage
Occurrence Of Yes 13 72.22%
No 5 27.77%
Budget Deficit
Total 18 100
Table 2.1 occurrence of budget performance

The above table show most of the time budget deficit occur in the organization
13(72.22%) of respondent response as budget deficit occur. In the organization and
5(27.77%) of respondent response as budget deficit not occur in the organization.

2.1. From these point view the budget deficit is occur

17
Highly such as 72.22% of the respondent in the organization said. On the other hand of
budget deficit occur in the organization is some times controlled by the finance and
respective manager.

The other evaluation of the respondent response that the budget deficit is medium with in
the organization based on the respondents response that budget deficit is occur at medium
level with in the existing department.

2.2. Respondent evaluation on budget utilization within the organization

respondent evaluation No of respondent Percentage
Excellent 3 16.667%
Hood 4 22.22%
Satisfactory 8 44.44%
Poor 3 16.667%
Total 18 100
Table 2.2.1. budget utilization of the organization

From the above table 3(16.667%) of the respondent response that the budget utilization of
the organization is excellent of the other hand out of total number of respondent
4(22.22%) of the respondent response the budget utilization as good finance organization.

The other evaluate respondent response of satisfactory 8(44.44%) of respondent response

of the budget utilization as satisfactory from these we can understand the organization
utilize the budget at medium level rate.

The last evaluation is the respondents response poor such as 3(16.667%) of the
respondent responses that the budget utilization of the organization is poor. Because
budget is not always practicable efficiently an defectively. Through the organization
budget utilization is not reach to the point.

The respondent response to reduce the problem the organization should be accomplish.

18
Basic nature of every organization lies in the budget of effective productive resource in
relation of its wants. Therefore every organization is engaged in solving these problem of
budgeting performance is view of organizations under take various activity. Where by the
budget of a viable resource should be objective of budget stability. Employment and
growth could be attained. Then the organization should accomplish.
 Adopt of good budgeting system
 Introduce effective manger
 Active participation of all employees on specific job.
 Budget must allocated effacingly.
 Active reporting of budget utilization
Support of experience No of respondent Percentage
Yes 18 100%
No -
Total 18 100
support of job experience for the employee
From the above table we can conclude that all of there spending are supported by their
experience 18(100%) of the respondent response as yes from it nature experience of job
is very important to participate indifferent activity’s by supporting with that of historical
knowledge about thing or job. So since the budget is one of that activity is need
experience and knowledgeable person or workers.

Simply to examine the amount of budget for each sector to divid the budgeted a mount
for each sector these job experience help the worker of the organization by now the
organizing is some want good comparing to last year in human resource so that they are
help to success for new budget.

8. Respondent response on the allocation of budget

Budget allocation No of respondent Percentage
The organizational manager 4 22.22%

19
Higher periodical performance 8 44.44%
The financed apartment 3 16.667%
Other 3 16.667%
Total 18 100
Table 4.1 respondent response on budget allocation

From the above table we can under stand that from the total respondent 4(22.22%) of
them response that the budget allocation by organization manager to various sector in the
woreda.

The most widely used budget allocation are assigned by the higher periodic are perforce
such as 8(44.44%) of respondent response that budget allocation by the higher periodical
performance from this point of view we can understand. That first budget is allocated by
the higher periodical performance. To deferent part of governmental sector in the wereda.

similarly 3(16.667%) of respondent response that the organizationale budget is also

allocated by finance department this is true when once the budget is planned higher
periodical performance finance department one account to the other accent properly.

The other respondents 3(16.667%) response that most of the time the organizional budget
is allocated by the other parts of to each department in the wereda discus on and decide
by profession are bodies of manager. This indicate that the decision of the cabinet is very
important for budget allocation.

9. Respondent of budget utilization of the organizing

Way of budget utilization No of respondent Percentage
Budget planned accordingly 9 50%
By recording raven and expenses 5 27.7%
Both 4 22.22%
Total 18 100

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Table 5.1 respondent on budget utilization

From the above table we can conclude from total of respondent 9(50%) of the response
that budget utilization is adapted when budget is planned accordingly and appropriately
distributed with accordingly and appropriately distributed with in the organization. From
these data we can conclude that adoption of good budget and participation of all
employee on their specific job and reporting of their accomplishment work to finance
manger is important for utilization of budget.

On the other hjand 5(27.7%) of the respondent responses the budget utilization must have
to start frame recording of revenue and expenses. Even with out recording revenue and
parse it is impossible to utilize budget accordingly.

To be utilizing the budget within finance there should be accomplished account record
revenue and expenses in geernrallage account and subsidiary lager account.

Similarly 4(22.22%) of the respondent responses that both recording of revenue and
expresses and appropriate planned budget important to utilize budget in the organization.
This in decade both have to gather to use utilize the budget effectively.

10. Responses on the organization capacity to reduce the problem

Types of response Yes No Total
no of respondent 13 5 18
percentage 72.2 27.78 100
Table 5.1 response of the use of organization capacity to reduce its problem

From the above table we can understand the organization are used its capacity to reduce
its problem. Out of the total 18 respondent 13(72.2%) of them respondent reduce that the

21
problem. On the other hand 5(27.78%) of respondent response that the organization doe’s
used its capacity to reduce its problem from those respondent who responses yes the
organization used its capacity to reduce the problem through.

Communication with higher education are performance and regional government

 having monthly report on their budget and by transferring some amount from one
account/sector/ who have surplus /excess0 budge to those sector who have shortage of
budget.
 By having good financial budget and plan system. By employing those workers
having related fill and by training workers.
 By giving creation to all employee about the utilization of budget. From that
respondent who said no the answer stretched as things are scops of limitation.
 The measure factory that effecting budgetary performance of the organization are list
as follow by respondent statistical data are given (asked from the sector i.e most of
the time there is not accurate and reasonable data on their estimation of budget
 Shortage of human resource that summarize process and make accurate budget plan

13. Response of the respondent on manager relation with the employees, to improve
the problem of budgetary performance and to implement the objective of the organization
a good manager is grater important to solve this problem. Here the respondent reflect
their idea to word the organization manager as .

 It depends on situation, but most of the times they are individual based not task
oriented and with lack of transformational made of leading things.
 The organizational manager doesn’t communicate each employee at appropriate time
but not at all.
 The organizational manager of harmonious relationship for the organization
employee.
 The manager also does not control each and a every things of activity of the workers.
 Absence of immediate response by the manager for the workers question regarding
financial problem.

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On the other and some of respondent response that as a good relation ship specially after
new governmental strategy i.e business reengineering according to their response they
have good relation ship and frequently discussed on their problem they have and follow
to solve that problem.

14. Respondent response to minimize budgetary deficit and utilize budgetary

performance solution is
Utilization of budget Not respondent Percentage
Adopt good budget system 7 38.8
Effective manager 3 11.11
Activate participation of all employee 2 16.67
Allocation of budget precisely 6 33.3
Total 18 100
Table 9.1 system and methods of reducing budget deficit

From the above table 7(38.8%) of the respondent respondent response that to minimize
budget deficit and to utilize badger performance. The solution is adopting good budgeting
system with in the organization.

In the organization there should be utilize the budget are fluctuation and their should have
to minimize budget deficit and also at the same time they can increase capacity of work
performance on the other hand respondent response 3(11.11%).
 To utilize budget the solution is effectively manager must be available which in the
organization. The organizational manager should control the activity of budget and all
employee participate on their specific job efficiently and effectively
 The third respondent on budget utilization 2(16.67%) response that budget must
allocation precisely.
 To over can goals of organization budget be equally proportionality distributed on the
sector and department on their activity.
 The last utilization of budget from the respondent 6(30.3%) response that to utilize
and decrease budget deficit active participation of all employees

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 On their specific job and report of all employees on their own lager account and
general larger account report to the department manager must be reported at a time.

Effectiveness of budgeting Not respondent Percentage

system
Yes 3 16.67
No 15 83.3
Total 18 100

 Table 10.1 show the effective budgeting system from the above table we can
conclude that out of 18 respondent 15(83.3%) response as there is not effective
budgeting system because shortage of fund budget. Are occurring some sector by
deferent reason there is not effective budgeting system.
 The 3(16.67%) respondent response as there is effective budgeting system because
since they are using that of no sufficient budget it is enough to use what they have.

17. Kinds of employees participate in developing thus budgets as some of the

respondent response on preparing.
The budget proposal to allocate for each sector as per their question worker of finance
organization participate on preparing. This budget after prepared by those employees
workers the other discussion take place by top management.

The other respondent response that on preparing those budge different expert participate
who have related idea, skills and education participate on this budge preparation an
economist, statistician and manager also introduce their idea on knowledge on budget
preparation.

18. Does the employee have sufficient qualification?

Qualification Not respondent Percentage
Yes 8 44.4
No 10 55.56

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 Total 18 100
11.1. Table indicate qualification of the employees.

From the above as per the respondent 8(44.4%) response that as percent of qualification
of employees. They response that as the wereda, standard. The organization employee
have almost enough qualification, specially as the duration for existence of the
organization is long experience performance on budget. On the other hand 10(55.56%) of
the respondent response that there is no sufficient qualification of the employee in the
organization. For their response what the evidence they have since there is on educated
person specifically on budget preparation. The only experience doesn’t indicate quality of
workers.

Generally form this two response we can conclude that most of the organizational
workers. Are not educated person rather than they are experienced person or workers.

19. How to improve the situation of workers.

As per the respondent to improve the solution of the workers it is better to give conations
training even for those existing worker, specially on this budget it is important to give
training how to use. This scarce and the critical to dived for each sector rather than
depending only on the question of the sector. Although through hiring qualified person
they can also improve their qualification.

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 Chapter Five
5. Summary, Conclusion and Recommendation
5.1 Summary and Conclusion
The study was design to assess the budgetary performance of finance organization. It is
also in fended posuggest possible solution the problem identified.

On the basis of data collection from respondents and information obtained from general
manager of bureau the study has come up with the falling finding and conclusion
presented under subheading which are target of the study.

The major factor that affect organization budget performance is in appropriate budget
allocation and shortage of fund from higher body of government that means the budget
allocation form the bureau is not as much sufficient to allocate for each sector properly
when it compared with the need and tepidness of the woredas.
The organization doesn’t use good budget because the budget mostly allocated by the
higher authority of government bodies, evening the propagate submitted by the lower
bodies or manager of the because.
Similarly the organization manager is not effective and doesn’t control each activities of
the employees in the organization. At the same time statically data that given from each
sector is most of the time not accurate and reliable because of estimation.

The organization use in appropriate budget allocation when budget are not planned
accordingly and budget deficit occurs with in the organization.

Most of the time the organization does not use good accounting system because of the
organization civil servants are poor in profession. In order to accomplish effective
utilization of budget knowledge is compulsory for each employee but the organizing
currently use poor professional employee.

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Organization is not better use of budget allocation and most of the time organization does
not use good accenting system of the organization civil servant are poor professional
performance. In order to accomplish effective budget utilization.

The organization done use top management support of accomplish organization working
activity and manage the reliability of stated data accurately.

Generally in the wored finance budgets are not using as planned and controlled
mechanism and does not performing this budget as per their standard because the above
mentioned result.

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5.2 Recommendation
Based on the result obtained the following recommendation are forwarded to solve the
problem related with budgeting performance in the organization.
 It is better to use appropriate budget allocation in the organization which it allocate of
budget form higher bodies of government of sale of budget the problem related with
shortage of fund.
 The organization must adopt a good budgeting system in order to facilitate the
organization goal and objectives.
 The organizational manager should control each activity of employees effectively.
 Accurately and reliability estimated stat scale data must be honest fully
 Use of good accosting system which provide the organization standard reporting of
budget perform ace for this purpose or to improve this accenting system the employee
must have to get better training.
 To manage support and orientation to the employees that means employees are the
most important part of the budgeting activates and it should be support by managers
and orientation are needed.
 Active participation of all employee on their specific job to improve problem of the
organization all employee have to participate on their have to participate on their
specific job and report their daily working activity to the respective department head.
 Use effective communication with higher periodicalt6 performance because budget is
allocated by higher government bodies.

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REFERENCE

 Horgrane soundon and stratten (2002) Managerial Accountings 11 th edition new

Delhj.
 Anderson on (1994) Managerial accounting 3rd edition Greatebritain.
 Roinald W. Hillton 1997 Managerial Accounting M.C grows Hill Company.
 http://eenwalkipendia public Budgeting.
 Chalrles Thongreen 2003 cost accounting 10th edition
 Investopida (com-Tutorialse)
 Hillton cost Management strategies for business decision.

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 Appendix
Questionnaires

This questioners prepared to help in examining and assessing the budget performance of
the organization pertaining 3 department in financial organization audit and internal
control department cost and budget department and finance department.

1. Department
Finance department 
Audit internal controlled department 
Cost and budget department 
2. what will affect major factor budge performance
Property budge allocation 
The organization manger 
Employees 
Shortage fund 
3. is budget deficit occurring in the organization
Yes  No 
4. If yes on the above question place understand the following criteria and evaluate
each of them.
Default  High  Low  Medium 
Budget Utilization excellent  hood satisfactory  poor 
5. To reduce the problem occur what he organization should to accomplished give your
suggestion.

6. does the experience that you have support to accomplish your job successfully
Yes  No 
7. If yes how?

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8. Budgetary allocation is most allocated by?
Organizations management  the finance department 
Higher periodicity performance 
Other

9. In what way budget must be utilize in the organization?

By reducing revenue & expenses 
Budget planned accordingly 
10. dour think the organization used it capacity for educe budget defecate,
Yes  No 
11. If answer question 10 in what way?

12. Pleases comment the factory that affect budget performance? In the organization?

13. The leader ship style of departmental managers relation to employees please specify
some point?

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