An Appraisal of Budgeting As A Tool For

TITLE PAGE
AN APPRAISAL OF BUDGETING AS A TOOL FOR EFFECTIVE
CONTROL IN PUBLIC SECTOR: A CASE STUDY OF POWER SECTOR
(PHCN) ABUJA
BY
SURAJO HAMZA .A. HAFIZI

FTCM/611012/12
BEING A RESEARCH PROJECT SUBMITTED TO FEDERAL TRAINING
CENTRE MAIDUGURI IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD OF HIGHER NATIONAL DIPLOMA
IN PUBLIC ADMINISTRATION
JULY, 2014
i
CERTIFICATION
This is to certify that the research work An Appraisal of Budgeting as a Tool of
Effective Control in Public Sector. A case study of Power Sector then (PHCN)
carried out by Surajo Hamza Ahmed Hafizi has been examined by me and found
acceptable in partial fulfillment for the award of Higher National Diploma in
Public Administration.
__________________________ ________________
Mr A. Bello Kwajaffa Date
Supervisor
__________________________ ________________
Mr. Modu A.Goni Date
H.O.D
Public Administration
__________________________ ________________
Mr Musa E.A Date
Deputy Provost Academics
(F.T.C.M)
__________________________ ________________
Mr Daniel T. Jatau Date
Provost of (F.T.C.M)
Having met the stipulated requirements, this project report has been accepted by
the Academic Board.
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DEDICATION
This project work is dedicated to my great inspiration of the infinity of Allah’s
(SWT) mercy upon the peace and unity gained in the study, my daily companion
the Holy Qur’an, my father Hamza Ahmed Hafizi, mother for her love and prayer,
my wife and children Moh’d Salisu Surajo Hawwa Surajo, Amina Surajo and
Fatima Surajo.
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RECOMMENDATION
We hereby recommend to the Federal Training Centre the acceptance as
satisfactory the project work of Surajo Hamza Ahmed Hafizi Reg No 611012/12
titled: An Appraisal of Budgeting as a tool of effective control in public sector a
case study of power Sector (PHCN) in partial fulfillment of the requirement for the
award of Higher National Diploma In Public Administration.
Sign ___________________ Sign ___________________

Coordinator Supervisor
Date ________________ Date ________________
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TABLE OF CONTENTS
TITLE PAGE..................................................................................................................................i
CERTIFICATION........................................................................................................................ii
DEDICATION..............................................................................................................................iii
RECOMMENDATION................................................................................................................iv
TABLE OF CONTENTS..............................................................................................................v
ACKNOWLEDGMENT.............................................................................................................vii
ABSTRACT................................................................................................................................viii
CHAPTER ONE............................................................................................................................1
1.0 INTRODUCTION...........................................................................................................1
1.1 BACKGROUND INFORMATION...............................................................................2
1.2 STATEMENT OF THE PROBLEM............................................................................5
1.3 SIGNIFICANCE OF THE STUDY...............................................................................6
1.4 LIMITATION OF THE STUDY...................................................................................6
1.5 DEFINITION OF TERMS.............................................................................................7
CHAPTER TWO.........................................................................................................................10
LITERATURE REVIEW...........................................................................................................10
2.1 OVERVIEW OF BUDGETING MANAGEMENT...................................................10
2.2 DEFINITION OF FINANCIAL MANAGEMENT...................................................22
2.3 OVERVIEW OF FINANCIAL MANAGEMENT....................................................24
2.4 EFFECTIVE FINANCIAL MANAGEMENT IN AN ORGANIZATION.............28
2.4 THE ROLE OF FINANCIAL MANAGERS.............................................................31
2.5 OVERVIEW OF FINANCIAL MANAGEMENT OF ENERGY DEVELOPMENT
FUNDS REFORM.........................................................................................................40
RESEARCH METHODOLOGY...............................................................................................45
3.0 INTRODUCTION.........................................................................................................45
3.1 DESCRIPTION OF RESEARCH METHOD............................................................45
3.2 DESCRIPTION OF POPULATION...........................................................................45
3.3 DESCRIPTION OF THE SAMPLE PROCEDURES...............................................46
3.4 DESCRIPTION OF INSTRUMENT USED...............................................................46
3.5 DESCRIPTION OF DATA GATHERING PROCEDURE......................................47
3.6 DESCRIPTION OF TECHNIQUES USED IN ANALYSIS....................................48
3.7 CONCLUSION..............................................................................................................48
CHAPTER FOUR.......................................................................................................................49
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PRESENTATION AND ANALYSIS OF DATA......................................................................49
4.0 INTRODUCTION.........................................................................................................49
4.1 DATA PRESENTATION AND ANALYSIS..............................................................51
4.2 SUMMARY OF FINDINGS........................................................................................61
SUMMARY, CONCLUSION AND RECOMMENDATIONS...............................................62
5.0 INTRODUCTION.........................................................................................................62
5.1 SUMMARY...................................................................................................................62
5.2 CONCLUSION..............................................................................................................63
5.3 RECOMMENDATIONS..............................................................................................65
BIBLIOGRAPHY........................................................................................................................67
APPENDIX I................................................................................................................................68
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ACKNOWLEDGMENT
Thanks and glory be to Allah (SWT) in given is chosen and beloved servant
prophet Mohammad peace be upon him with the guidance upon that lightered and
healed the spiritual illness of body and soul, eventually beneficence to the
successors that founded and seeks by the means of Holy Qur’an. After so much
work apprentice, certificate in local government study, diploma in Public
Administration, Basic Security for Sergent of arms Department of the clerk
national assembly which I declare my loyalty and service and professional
certificate in membership (ACIA). I forward my need to Federal Training Centre
seeking Higher National Diploma in Public Administration.
I am profound grateful to my.
- Supervisors
- Class councellor
- All lecturers
- Patrons
- All students
- And members, I love you all.
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ABSTRACT
The entire work under “an Appraisal of Budgetary as a Tool of Effective Control,”
highlighted general problems and objectives as well as significant of study with
historical background of the then (PHCN) determining capacity, development and
maintaining including the changes and examined planning. And the financial
management way forward in purposes and objective of Budgeting, with it types
under the energy firm reform and impact of privatization and commercialization
improving reputable electricity, prudence in preparation of budget, responsible for
money policies, payment of workers’ salaries, material stock, investments
profitability, and safeguarding the establishment funds and assets, promote long
range balance growth system, executive capacity with a regular power supply
service without power failure. It also brings to light the present reforms and
necessary data required to enrich the study documentary negotiated with the
tables of acceptances from age, gender and rank of the respondents and finally
budget and plan should be reviewed on a continuous basis, effectively and
efficiently to facilitate the realization of goals.
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CHAPTER ONE
1.0 INTRODUCTION
Given that:
Electric energy is crucial for rapid economic growth and transformation. Its
production (generation, transformation and distribution) is for both a growth
of all industries as well as an entirely new industry with scientific
technological effect on the other sectoral activities.
The key to achieve operational excellence, therefore is in effectively flexible
management of resources and this means optimizing and scheduling people,
processes, vehicle equipments and materials so that utilization is maximized;
while business goal are achieved through appraisals in sufficient timing
plan, not been frequently source of difficulty on account of it lateness, quite
aside from the impact of the cycle the portfolio of it requisite type of
meaningful project which is likely to be small and restricted to it local
agencies, the worse still following it. Rather than the medium and long term
prospective and the cyclical that will be implemented in time to effect
sectoral balance.
And appraisal of budgetary as a tool for effective control in a public sector
determining the wealth of any nation every extent on human resource,
environment resource and value of human effort as resources for any

1
organizational productivity, efficiency, effectiveness in operation, this
cannot be all emphasized. The capacity building developing and maintaining
well trained skilled, experienced and quality human resources that easy out
the various tasks of organization, these is issue of importance; and is a
complex issue which extended beyond the sphere of economic policy, more
set of issues which Nigerians are inclined to sweep under the carpet of this
development is known to no political, religions, or ethnic boundaries. It
seeks only sole infirmity with security and serious management its against
this background that the researcher investigate the resources on the
organizational development inter-sectorial balance.
1.1 BACKGROUND INFORMATION
Electric power development in Nigeria seated towards the closing year of the
last century when the first generation plant was installed in the city of Lagos
in 1898 from this date upward and until 1950 the pattern of electricity
development was set up at various towns, some of them by the federal
government and jurisdiction of the public work department and some by the
Native Authorities and one or two large municipals authorities. Electricity
corporation of Nigeria 1950 in order to integrate power development and
make effective the electricity corporation of Nigeria ordinance No. 15 of
1950 were passed which brought under control all electricity undertakings to
2
public departments and as a statutory body responsible for generation,
transformation and distribution with sales of electricity to all consumers and
customers in Nigeria as (ECN).
NIGER DAMS AUTHORITY
The Niger Dams Authority was established by act of the parliament in 1962,
the Authority was responsible for the construction and maintenance and
other works on the rive Niger and elsewhere generating electricity by means
of water power improving navigation and promoting fisheries and irrigations
construction of the Kainji Dam which began in March 1964 was completed
on schedule in the December 1968.
(NEPA) NATIONAL ELECTRIC POWER AUTHORITY
In September 1969 the federal military government decided to merge the
electricity corporation of Nigeria and the Niger Dams Authorities into a
single body. A year left a year later a Canadian firm of consultants
“SHOWMEN LURRUTED” was appointed into technical details of the
merger. The report was submitted on November, 1971 by Decree No. 24 of
27 June 1972 and effective 1st April 1972.
Took up in proper manner on 6th January 1973; The National Electric Power
Authorities existed until development plan of the power system of 1982-
3
1990 classified major electric sales grew rather rapidly at the Annual sale of
16.1% from just under one million megawatt hours (MWH) carrying 0.914.
In the year ended March 1970 to 4.066 (MWH) in the year ended 1980.
According to Central Bank of Nigeria annual report for the year ended
December 31st 1981 sales for the calendar year 1981. The last year for which
figures totaled some 5.677 (MWH) and this represent 20.7% increase over
the figure for the calendar year ended 1980; that decree stipulates that the
authorities are to develop and maintain an efficient coordinated and
economic system of electricity supply for all parts of the federation.
Prior to privatization programmes that was introduced during the regime of
former president chief Olusegun Obasanjo the firm was privatized and
subsequently Power Holding Company of Nigeria sub-commercialized it
generation setup into seven sectors while the distribution into ten sector and
owns only transmission up to date as the review of power sector ministry in
2013. As the presidential commission on parastatals federal government
press, Lagos pg. 16 to complete the decomposition of NEPA to PHCN in to
commercial variable headed by (G.O Onosade) recommended that the
PHCN should concentrate on distribution, maintenance and sales of sales of
electricity should formed out to reputable electric companies prudent
executive capacity, and enable regular supply of electricity, improve its
4
service throughout the country and ensure regular supply of electricity
without power failure.
1.2 STATEMENT OF THE PROBLEM
The challenge in most organizations has posed a threat on the realization of
its development and the achievement of its set objectives. This is as a result
of fundamental issue of inadequate and improper acquisition, utilization of
and maintenance of human resource in the then (PHCN) Power Holding
Company of Nigeria has seriously led the organization into mass,
inadequacy of supply to meet the demand of a rapidly growing economy;
frequent power failure and load shedding resulting in heavy economic
losses, excessive reliance on large-scale hydropower, limited spare capacity
and high transmission overloaded distribution facilities, and inadequate
maintenance of the facilities as in the fourth plan documents and human
factor is not properly managed, mismanagement is another serious problem
facing our organization today and has reduced it to nothing as people are no
longer in with their work not ready to own up to vital resources in the
organization. And also delay in obtaining government approval in contract.
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1.3 SIGNIFICANCE OF THE STUDY
The significance of the study is to assess the role of resources management
on organization and constantly develop means of managing resources
includes the following aspect.
a. It will assist managers to know the need for human resource training and
development, ensure that the right numbers skilled/trained manpower are
available for employment at the right time for all level in the
organization.
b. The study will contribute positively at state on how privatization and
commercialization resources can be effectively utilized and hot it can
bring about high productivity in the organization.
c. Students aspiring to be a material executive in future see this study as an
opportunity to fully investigate into field of human, material and
financial resources management to see the challenges therein.
d. It also hope that the study will assist future researchers of resources
management and how it can lead to organizational development.
1.4 LIMITATION OF THE STUDY
The study is to assist the role of resource management on the organization
development; the study will be restricted to the Power Holding Company of
Nigeria known as Power Sector Reform and its public liability companies,
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man, material, money and machines constitute the resources of organization.
This study will not cover all the resources of (PHCN) and as such it will be
limited to human, material and financial resources.
Data were collected and used based on records gotten from the organization
and it only covered records on past years as relevant information which were
based on recent and current events most were brief due to problems of
breakdown in machines and mismanagement fraud, other materials from
textbooks and journals, periodicals, internet browsing will serve as the
secondary sources of data for research study.
1.5 DEFINITION OF TERMS
In order to avoid any form of ambiguity as regard to the terms used in this
research work, the following are given optioned definition:
Human Resource Planning (HRP): This is the process of getting the right
number of qualified people into the right job at the right time.
Productivity: Is the measure of how well resources are brought together in
organization and utilization for accomplishing a set of result. Productivity is
reaching the highest level of performance with least expenditure of
resources.
Organization: This is the process of dividing work into convenient tasks or
duties or grouping such duties in formal posts delegation of authority to each
7
part and approving qualified staff to be responsible that the work is carried
out as planned.
Motivation: Is the term used to describe those processes both instructive
and rational by which people seek to satisfy the basic desires, perceived
needs and personal goals which triggered human behaviour.
Forecasting: Is a process of estimating the future number of people required
and skills and competence they will need.
Material management: This is defined as grouping under one head all or
some of the activities involved in the organization and use of materials
employed from the need stage up to the storage of financial goal.
Purchasing: purchasing is defined as the activity directed to securing by
legal means the material supplier and the equipment required in the
operation of an enterprises.
Sourcing: This is referred to as investigation and evaluation of resources of
supply and suppliers.
Negotiation: Is a process of planning, receiving and the analyzing used by
both buyers and sellers to arrive at an acceptable agreement through
common understanding.
Expediting: It is a process of ensuring that goods are promptly delivered to
the right place and at the usual right time.
8
Purchasing requisition: It is a form usually prepared when a department is
store need material to be purchased.
Issue: Is the withdrawal of goods and handover of some of user backed with
authorities documents.
Quality control: Is a process whereby goods and services are examined to
ensure that they conform to predetermined standards.
Obsolescence: These are materials for which there is no demand either
because of the presence of better substitute or they are out of use fashion.
Stocking: This is complete process of verifying the quality balance of entire
stock hold in the store.
Mission: Statement of an organization over siding purpose of vision for the
organization usually expressed in general teams, but tends to suffice the
organization culture.
Objective: An objective is the end point of a management programme
whereas stated in general or specific term.
Planning: Can be defined as the act of setting and selecting goals or
objectives in selection to the strategies policies and procedures for achieving
the goal and objective.
Manpower planning: Is concerned with developing a systematic procedure
for achieving an organization objective through the acquisition, utilization,
maintenance and development of the human resource required presently and
in the future.
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CHAPTER TWO
LITERATURE REVIEW
2.1 OVERVIEW OF BUDGETING MANAGEMENT
The financial targets frequently employed in assessing the degree of
implementation of capital projects with an efficient control entails serious
adherence to plan discipline effective monitoring smooth adjustment in the
light of new development and the selective continuity of economic policy,
by means of quantitative guidance and qualitative goals or instrument.
Budgeting is an estimate of government expenditure and revenue for the
ensuring financial year presented to the parliament by the chancellor and
embodied in finance bill proposed on the creation of the plan stabilization
and pure reserve for fair balancing within the constraints realizing attainable
aim and accumulating the reserve.
We could have mild budget surpluses in boom times mild budget deficits in
depressed times – a surplus in the sense that the pure reserve fund is
cumulated to the same extent and a deficit in the sense that it is
corresponding the decumulated. Our backward in growth of the civil service
bureaucracy and the public service in general is of course no monopoly of
the State, nor is the need to control recurrent expenditure of the foreign
10
borrowing limited to them. These are the need therefore for the national
economic council and legislative to control through budget. The level and
growth of federal government recurrent expenditure as well as ensure
optimum foreign borrowings. So as to have significant availabilities of
current budget surpluses for development activities better attainment,
informed dialogue and cooperation should be a characteristic of the process
towards achieving goals in this connection, a properly constituted and
enabled national planning framework should prove invaluable.
2.1.1 SIGNIFICANCE OF BUDGET FRAMEWORK PLANNING
In its simplest form, planning can be defined as thinking before acting.
Kenessey is of the view that “mankind and planning are old mates.” In a
sense they were born together. The making of the first stone tools already
involved measure of “planning.”
Defined as to “scheme,” arranging before hand, planning is broad human
attribute” (Kenessey, 1978, p.7).
In a slightly different note Koontz, defined planning as: Deciding in advance
what to do, when to do it and who is to do it. Planning bridges the gap from
where we are to where we are going to. It makes it possible for things to
occur which include not otherwise happen. (Koontz, 1980).
11
Element of planning: From the foregoing definition we can see that
planning is a pre-requisite for any form of development, more particularly in
developing countries where development is particularly lacking. Put
differently, the thinking process is necessary for every form of development.
For as Kenessey correctly puts it:
Certain element of planning and for that matter, centralized planning
obviously most has existed in order to maintain the system of irrigation,
production distribution, communication and defense at various stages in
such cultures as ancient Egypt.
2.1.2 FACTORS TO BE CONSIDERED IN PLANNING PROCESS
1. Physiological gratification (food, sleep, comfort and sex. etc).
2. Love and affection
3. Aesthetic satisfaction
4. Excitement
5. Novelty
INSTRUMENTAL OBJECTIVES OF PLANNING
Instrumental objectives are as follows:

1. Freedom
2. Rational
3. Democracy
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4. Equality
5. Security
6. Progress (lbid)
Types of development plans
Development plans are classified according to their time horizon, activity
coverage, geographical scope, institutional character and level of details
(Kenessey, OP. Cit).
Development according to time horizon

Short, medium and long-term plans
1. Short-term plans
Short terms are those starting from daily plans to annual plans. Most
people do not know that there is a daily plan. The work people do in the
office ever day is based on a daily plan. From daily plans we move to
weekly plans, to monthly plans and annual plans. The typical short term
plan that people are used to be the annuals plans which we describe as the
budget. However, are some countries economic plans are known as
operational plan or adjustment plan.
2. Medium term plans
Medium term plans are those covering a time horizon of between two to
six years. However the typical medium term plans are the four years or
13
five years plan. Development plans in Nigeria between 1962 to 1985
belongs to this category.
2.1.3 PLANS ACCORDING TO ACTIVITY COVERAGE OVERALL

(NATIONAL) PLANS, SECTORAL (INDUSTRIAL) PLANS,
FUNCTIONAL PLANS AND PLANS FOR MAJOR PROJECTS:
Overall plans
Overall plans are those that cover all the major sectors of the economy such
as production, consumption, capital formation and distribution of income.
Sectoral plans
Sectoral plans as the name suggest relate to the planning of specific sector of
the economy. The often cited example is the famous GEOLRO plan of
electrification in Russia in 1920’s. sectoral plans can be made for any major
sector of the economy.
Functional plans
Functional plans are made for major functional areas of the state. Example
of such functional plans includes: the 6-3-3-4 educational plan in Nigeria,
the EPI/ORT health plan in Nigeria.
Plan of key-project
Special plan are usually made for key project. For example, the Kainji Dam
project; the Shiroro Dam project and Balanga Dam project in Nigeria. Other
14
examples include Tennesee’s Valley Authority (TVA) in the USA and the
Apolo space programme also in the USA.
Plans according to geographical coverage local, regional, national

groups of countries and world plans
Local plans
Local plans are usually restricted to a local government area.
Regional/State
Regional/State is a plan made for any geographical area of a country which
is more than local government area but at the same time smaller than the
area of the country.
National plans
National plans usually cover the entire area of the country. It is similar plans,
except that the focus here is more on the geographical area; while the focus
of the former is on economic variables.
PLANS ACCORDING TO INSTITUTIONAL CHARACTER
Institutional plans are relate to major institutions i.e. Power Holding
Company of Nigeria, Railways Corporations, First Bank, Total Petroleum
Company
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PLANS ACCORDING TO DEGREE OF DETAIL: COMPLEX
PLANS, SIMPLE PLANS:
Complex Plans
Some plans are very complex. The 6th French plans is a good example of a
complex plan. In the preparation stages of the sixth plan extensive use was
made of a complex model.
The approach adopted for the sixth plan was considered one of simulation.
The purpose of the mode was to study the consequences of a given set of
measures taking into account the interrelationships and the economic forces.
In the work for the sixth plan a large number of variables were studied,
evaluated through planning bodies. The calculations that related to the FIFI
model involved 1,500 mathematical equations and 5,000 programme
instructions with tables resulting in 14,000 key figures and were carried out
the use of an IBM 360 75 computer (Op. Cit).
Simple plans
On the other hand a simple plan is based on the shopping list techniques.
Items to be achieved in the plan period are listed. This is the type of plan that
is found in most developing countries.
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2.1.4 ECOLOGY OF PLANNING
Planning ecology includes the stage of development, political climate and
other social factors.
The level of societal development determines the type of strategies to be
adopted in the planning process. If a country is not developed, the best
approach to planning would be to concentrate on developing infrastructures
and individual social overhead public investment project aimed at creating
the necessary conditions to initiate economy transformation.
The political climate is also an important ecological factor in planning.
Political stability is a prerequisite for a successful development plan.
In addition to stage of development and political climate, social factors may
inhibit the successful implementation of development plans. For example,
cultural factors may prevent the introduction of rural development
programmes. What is desired and necessary may not be practicable because
of opposition by target groups.
MACHINERY PLANNING
If a plan is well formulated and there are resources to implement it, success
in the implementation programmes would depend on the machinery of
planning.
17
Usually two basic planning organs are provided for a planning commission
and a planning office. The roles and relationships of the two may vary; but
in most cases the role of the planning commission is concentrated on
reaching final recommendation regarding plans variance and other issues of
planning, the central responsibility of the plans and activities related to there
implementation. The need for creation of special plan organs is especially
great because traditional governmental administrative units are usually
available to deal with the problems raised by the introduction of this new
national activity. At the same time the planning organs must become part of
the central government system (Keynesey).
The reasons why it is clear from the empirical data, that one of the reasons
for the failure of development plan in Nigeria was the inability of
government to set up a viable machinery of planning. For example in 1955
the National Economic Council was established to take care of the issues of
planning, among other things. The ineffectiveness of NEC led to the
establishment of the Joint Planning Commission and the national manpower
board in 1958 and 1962 respectively. The Joint Planning Commission and
National Economic Council were established by the Ironsi Regime (1966),
which established a National Economic Advisory Group. The proliferation
18
of the planning machinery continued until the second republic (1979-1983)
which an attempt was made to establish some from of stability.
Like most institution in Nigeria the planning machinery was heavily
politicized. This made if ineffective. If a development is to succeed the
machinery of planning should be staffed with hand working and dedicated
people who are committed to the philosophy of the plan.
2.1.5 METHOD AND TECHNIQUES OF FINANCIAL MANAGEMENT
After the plans is prepared through cooperative efforts over period of some
two years, approved by the president, the (NEC) by the implication the state
governors and local council chairman, it should be printed and submitted, as
appropriate to the various legislative houses for discussion and approval.
The National Assembly receiving the detailed National Development Plan
document, the State Assemblies their respective states plans. These
oversight of the representatives is a call to the entire nation and its
constituent communities to strive to fully implementation its embodied
target and objectives with incentives for fulfillment and over fulfillments.
The process of motivation will naturally involve more superficial
quantitative and qualitative policy changes in price, relations, taxes,
quantitative restrictions and even in aspect business organizations etc.
19
But also, inevitably more fundamental policy changes are required to effect
favourably the feelings and attitude of members of the community so that
they freely commit themselves to policy goals and strive vigorously to attain
those goals.
PRIVATIZATION AND COMMERCIALIZATION
Privatization is the industrial assumptions of functions or institutions that
where formally part of government whereas commercialization is
introduction of commodity into free market for mass consumption.
The organizational future need can be forecasted using a variety of methods.
Some are simple while other complex; regardless of this either be segmented
or mathematically based, includes managerial estimates, techniques and
scenario analysis.
1. Managerial Estimate: Under this method managers make estimate of
future staffing needs based primarily on past experience. The estimate
can be made by top level managers and past down by lower level
managers and passed up for further revision or by some combination of
upper and lower level managers.
2. Delphi Technique: Under this method each member of panel of
experts make an independents estimate of what the future demand will
be, along with underlying assumptions. An intermediary then present
20
each expert’s forecast and assumptions to the others and allows the
expert to revise their position if they desire. This process continues until
some consensus emerges.
3. Scenario Analysis: This involves using workforce environmental
scanning data to develop alternative workforce scenario. The scenarios
are developed by having brainstorming sessions with line managers and
human resource managers who forecast what they think their workforce
will look like five or more years into the future. Once these forecast have
been crystallized the managers then work backwards to identify key
change points.
4. Bench Marking: This method involves thoroughly examining
internal practice and procedures and measuring them against the ways
other successful organisation operate. With regards to human resource
planning bench marketing involves learning what the other successful
organisations in the industry are forecasting and how they are arriving at
their forecast. Your forecasts and methods can than be compared to
others. Consultants and professional organisations such as industry
association can be employed to help with the bench marking process. A
major advantage of bench marking is that it force you to look at other
ways of doing things.
21
5. Skill Inventory: A skill inventory consolidates information about the
organisation’s human resources. It provides basic information on all
employee, because the information from a skill inventory is used as
input into promotion and transfer decision it contain information about
each employees portfolio of skills and not just those relevant to the
employees current job.
6. Managerial Inventory: This method tries to explain brief
assessments of the manager’s past performance, strength weakness and
potential for advancement. In essence a management inventory is a
specialized type of skills inventory jugs for management.
2.2 DEFINITION OF FINANCIAL MANAGEMENT
Pandey (1995) stated that financial management is concerned with decisions
on how to procure, expend and give account of funds provided for the
implementation of the programmes of an organization. In educational
institutions, financial management refers to that management activity that is
concerned with decisions on how to procure funds, of an organization's
financial resources, disburse and give account of funds.
Financial management is the management of funds, cash assets of the
business (financial planning and control) in order to achieve the financial
22
objectives of the business. It is concerned with the managerial activities
related to procurement, arrangement and utilization of the funds for business
purposes.
The theory of company finance is based on the assumption that the objective
of management is to maximize the wealth of the owners. Finance is the
biding force of any business organization and this makes financials control
an essential ingredient of its success.
According to the Financial Management Concept, the role of a finance
manager is very essential in an establishment, he co-ordinate every activities
that deals directly or indirectly with finance. Financial management arises
due to the possibility of using available funds for its set objective, sources of
funds generation, utilization of its funds to the last stage of the
organizational set-up are various features of finance management.
Financial management can be termed as part of management control that
gathers reports and uses accounting numbers to aid management in its
planning and control functions.
Financial management functions and implementation must be identified,
understood, appreciated and disseminated, participators are the plant finance
managers as a managerial representatives and the entire account team.
23
Without adequate follow-up financial controls are not self –effective unless
they are enforced, monitored and improved upon. Apart from the objectives
of safe-guarding assets, it seeks to reduce, if not to eliminate some elements
of fraud in the establishment. The eradication of fraud and the removal of
establishment internal control weaknesses now make finance management
singularly of great management reliance.
Finance control also involve in the practices of measuring organization
performance against per-test objectives with a view to determine the
possibility of deviation which has to be corrected to return the organization
to its planned course.
2.3 OVERVIEW OF FINANCIAL MANAGEMENT
The discipline of finance was considered as part of economics before
emerging as a separate field of study in the 1990s, the emphasis according to
Kurfi (2003) was on legalistic matters relating to mergers, consolidation,
formation of new but large firms and obtaining more capital for expansion.
The improvement of technological innovations of the 1920s coupled with
emergence of new industries, Then created need for more funds which
prompted the study of financial management to emphasize on liquidity and
external financing of firm.
24
In the 1930s the economic depressions in Europe and America made the
study of finance to focus on defensive aspect of survival, preservation of
liquidity, prevention of bankruptcy and liquidation. The rampant business
failure at this period and wrong business practices relating to financial
transactions led governments to regulate businesses. One of such regulations
was an increase in the amount of financial data disclosed by firms. The
disclosure made financial analysis more encompassing because the analyst
was able to compare different companies or firms as to their financial
conditions and performance. Thus at this time, the emphasis was on a
company maintaining a sound financial structure. In the 1940s and 1950s,
the study of finance was dominated by traditional approach which
emphasized the view point of outsiders (such as a lender which or an
investor), analyzing the cash flows of the firms planning and controlling the
cash flows within the firms. In all the above phases, the analysis was more
descriptive in nature.
However, in the 1950s, emphasis shifted to capital budgeting and allied
considerations. Particularly after the work of Dean (1951), new methods and
techniques of selecting capital projects evolved which led to the frame work
of efficient allocation of capital within the firm on the basis of appropriate
and objective acceptance criterion. This discovery made financial managers
25
become interested in knowing how creditors and investors value the firms
and how a particular decision affect their respective valuations. With this,
valuation models were developed for evaluating capital structure and indents
policy of the firm in relation to its valuation and as a whole.
In the 1950s also, the computer era came which enable the financial manager
to handle complex information and data base in making sound financial
decisions. Powerful analytical decision theory techniques for assessing
present values came into use, making it possible for more disciplined and
fruitful financial analysis.
In the 1960s, came the development of portfolio theory and its eventual
application to financial management. Portfolio theory in financial
management became widely acceptable after the work of Markovitz (1952)
and the subsequent works of scholars like Sharpe (1964) and Hamada
(1969). The concept of portfolio theory in a nutshell, Kurfi (2003), says that
the risk inherent in an individual security should not be judged on the basis
of possible deviations from the expected return rather in relation to the
marginal contribution to the overall risk of a portfolio depending on the
degree of correlation of the securities, that made up the portfolio, the asset
would be more or less risky. Along with this development, came
26
considerable theoretical and empirical work on the functions of financial
markets.
In the 1970s, the capital Asset pricing model (CAPM) developed in the
1960s by Sharpe (1964) and Hintner (1965) was further refined and applied
to financial management CAPM provides a measure of security’s risk in
terms of its sensitivity to the capital market movement which is referred to
as data (B). Beta reflects the systematic risk which cannot be diversified.
Because the model suggests that some of the risks of the firm, (that is the
unsystematic risks) are not relevant to the investor in the firm’s security as
these would be diversified away in the port folio of securities held.
In the 1980s and 1990s town to this 21 st century, a number of intellectual
researches in the valuations of the firm in an uncertain environment have
been made by renowned scholars like mullins (1982), Myers (1984) and
Chen, et al (1986) to widen the scope of financial management.
There is an increased focus on the role of personal corporate taxes in
conjunction with corporate taxes. The development of advance information
technology of this era, provides us with sights into the market behaviour of
financial instrument. We may wish to observe that the role of financial has
changed from primarily, a descriptive analysis and normative theory, from a
27
discipline that was mainly concerned with procurement of funds to one that
include the management of assets to allocation of allocation of capital and
valuation of the firm in the overall markets and from a discipline that
emphasized external analysis of the firm to the one that stresses decision
making within the firm.
Financial management in our contemporary time is characterized as ever
changing with new concepts, ideas and techniques. Financial managers
must understand the dynamic business environment in which they operate
and be ready to take the challenges being posed by these changes.
2.4 EFFECTIVE FINANCIAL MANAGEMENT IN AN ORGANIZATION
Financial management according to Pandey (1999), refers to the managerial
activity which concerned with planning and controlling of a firm’s
resources. It is the field of management concerned with acquisition,
financing and managing the firm’s assets with some overall goal of wealth
maximization in mind, financial management deals with the general
institution and procedures involved in the acquisition and disbursement of
funds in the organization.
FUNCTIONS OF FINANCE
A finance function in an organization refers to the tasks or basic roles of the
financial manager in the firm. Financial managers mainly concern
28
themselves with planning for, obtaining and using funds to maximize the
value of the firm. The value of the firm in this context refers to the market
value of the firms’ common stock which in turn is a reflection of the firm’s
investment, financing and dividend decisions.
Although, it may not be easy to separate finance functions from other
functions in the organization such as personnel, production, marketing and
other functions, yet some finance functions are basic. The functions of
finance in organizations are therefore broadly classified into two functions:
(a) Managerial finance function
(b) Routine finance function
MANAGERIAL FINANCE FUNCTION
Managerial function directly concerned the firms decision on dispose of
assets and require the commitment or recommitment of funds on continuous
basis. It is in this context that finance function are said to influence the
production, marketing and other functions of the firm. This, in consequence
will affect the size, growth and profitability and risk of the firm and
ultimately the value of the firm.
Therefore, Solomon Ezra (1963) opined … the function of financial
management is to review and control decisions to commit and recommit
funds to new or outgoing uses. Chief finance executive is mainly involved.
29
Pandey (1999) identified four important managerial function of finance to
include:
(a) Investment or long-term asset mix decision
(b) Divident or profit allocation decision
(c) Financing or capital mix decision
(d) Liquidity or short-term assert mix decision.
ROUTINE FINANCE FUNCTION
Routine functions of finance are functions that do not require a great deal of
managerial ability or skills to be carry out. They are mainly clerical in
nature. These routine functions are incidental to effective execution of
managerial functions. As Pandey (1999) opined…. Certain other function
have to be performed routine for effective execution of managerial
functions, these functions concern the procedures, and involve a lot of paper
work and time some of those important routine finance function are:
1. Supervision of cash receipts and payment and safeguarding of
cash balances.
2. Custody and safeguarding of securities, insurance policies and
other valuable papers.
3. Taking care of mechanical details of new outside financing.
4. Record keeping and reporting.
30
Routine functions are carried out by people of or in the lower levels. The
involvement of chief executive in the routine function is to the extent of
settling up rules and procedures, selecting methods to be used, establishing
standard for employment of personnel and to check that performance
complies with rules and procedures
2.4 THE ROLE OF FINANCIAL MANAGERS
The role of financial managers cannot be overemphasized or over looked in
any system of economy, most especially in the economy of a developing
nation like Nigeria. As they are the heart –core to the smooth running of any
economic system and as well initiate the development of the nation and
satisfy its citizens with the basic necessities of life citizens with the basic
necessities of life is the desire of every nation.
The functions of the financial managers are diversified according to the
establishment plan and position of works. The functions of a financial
manager in either federal, state, and or local government differs from that of
private owned business enterprises, but there are common functions which
are performed in all areas of work. These are management of finance,
maintaining of the source funds and guiding the establishment concerned in
areas of productive investment, how to allocate funds and how to raise
revenue for its set objectives.

31
Other general functions of a finance manager include.
- Preparation of budget
- Initiate loan based on decision
- Responsibility for money policies
- Payment of workers salaries
- Stocking of the company with enough raw materials
- Decide the type of investment for better profitability .
- Ensure adequate safe-guard of establishment funds and assets.
- Investing in the productive sector of the economy
- Promote a long range of balanced growth in the system
2.4.2 ROLE OF FINANCIAL MANAGEMENT IN THE PUBLIC SECTOR
According to Hampton (1992), finance is made up of five distinct field,
namely:
i. Public finance
ii. Securities and investment analysis
iii. International finance
iv. institutional finance
v. Financial management
a) Public finance: Concern itself with federal state and local
government finances. Here a large sum of money is received from
many sources to be utilized in accordance with detailed policies and
procedures of the government. Government funds are dispensed
32
according to legislative provisions for the social, political, and
economical development of the economy.
b) Securities and investment analysis: This deals with the ability to
recognize and select financial assets which yield maximum return for
a given level of risk or minimum risk at any given return level. It also
concerns with (Umoh 1997) Quantitative skills of portfolio formation
and management.
c) International finance: This studies economic transaction, among
nations and individuals internationally. It concerned with the study of
different currencies of countries and associated foreign exchange
problems and payments or receipts.
d) Institutional finance: This deals with financial institutions such as
banks, insurance companies, pension funds, credit unions, unit trust
with the objective of knowing when to raise funds readily and cheaply
or place fund more profitably (Kurfi 2003) it also deals with savings
and capital formation for an enhanced economic growth and
development.
e) Financial management: This is concerned with the acquisitions,
financing and management of assets with some overall goal in mind
33
or concerns with the planning and control of the firm’s financial
resources.
2.4.3 CAUSES OF PROBLEMS IN FINANCIAL MANAGEMENT
Here, the researcher attempts to highlight the numerous factors that have led
to inadequacies in financial management. The literature review has been
based on the past and present occurrence within the circle of the
management of finance of private owned enterprises as presented by various
authors and writers, their major contributions have no doubt aid the
researcher in order to achieve the dim of the subject matter.
According to Otanwa (2006) causes of inadequacies in financial
management is defined as factors militating against proper appropriation and
well management of finance based on external and internal circumstances.
According to Otanwa he remarked that the principal causes of failures in
financial management of company funds (incredibly management) is, the
economic climate such as rapid inflation and variability in the rate of money
supply. Others include abatement of the techniques in financial management
and tremendous increased competition in the financial sector.
Olofin (2006) holds the view that profit maximization that is often
accompanied by higher risk could easily contribute to the failure of financial
34
management of companies to the maximization of operating costs,
negligence of the company to take account of the influence of technology
i.e. efficient computerized system .
According to input and output, operation in any company does no depend
only on the properties of factors of production and scale of production but
also upon the level of technology. Bamboye (1994) based his views of
financial management on financial institution. He pointed out that failures of
financial management in various establishments are not limited to Nigeria
alone. According to him, France largest financial institution (credit
hyonnais) financial report by 1993 indicated that the institution made a
stunning net-loss of FFR 6.9 billion which was attributed to loans given for
project finance. According to the report the take –over of the Hollywood
Metro –Gordrogies Mayer (MGM) by the Italian could not help out things.
According to the central Bank of Nigeria (CBN) it had injected 1.4 billion in
about 36 distressed companies, according to the report quoted by Adeboyo
(1994), the companies have performed poorly due to unfavorable economic
climate. Adebayo also viewed that inflation and unstable exchange rate of
the naira hindered better performance of many establishments.
35
The Nigeria deposit insurance Corporation (NDIC) 1990 Annual report
attributed the failure of financial management in companies to incidence of
fraud.
According to Osinotex (1992), a total of N804 million was lost to fraud in
1990 as against N105 million in 1989.
The private owned companies recorded N15.2 million. The writer also noted
that the phenomenon that has characterized the mismanagement of finance
in enterprises was the incidence of computer fraud and notorious 419 in
Lagos lost over N20 million to fraud committed by one of its staff through
the manipulation of the company’s computer.
According to S. Owoso, enough statistics do not exist at the moment to
establish a line between increased computerization and the rising trend of
fraud in financial industry.
Nwachukwu (2003) points out that the scope of computer related fraud in
Nigerian companies is very limited when compared with that of the united
states where a recent survey reveal that as much as N 500 million has been
lost to fraud.
While contributing to the causes and problems in financial management of
enterprises, F. Adekanye, attributed the failure to poor quality assets and
36
managerial inefficiency. According to him, capital inadequacy which arose
from low liquidity base has caused many problems in financial management.
He also added that frequent change of policy hindered smooth operation of
private owned enterprises.
Analyst also agreed that the cause of problems in financial management of
enterprises arises form the following:
- Inefficient management
- Poor start –up capital
- Massive fraud
- Unreliable record keeping
- Lack of better and adequate planning
2.4.4 IMPLICATION OF THE PROBLEMS OF FINANCIAL
MANAGEMENT
 Unemployment:- The effect of the failure of the above mentioned
enterprise has resulted in the unemployment of the indigenous citizens
working in the enterprise.
 Business Affected:- The activity of carrying on all or any of the foods
and beverages is hindered?
 It hinders development
 It also leads to corporate failure
 It corrupt individual’s mind

37
2.4.5 PROSPECTS OF FINANCIAL MANAGEMENT
The researcher also tries to find out what is the possible way out of these
calamities. Most of the problems facing these establishments are poor
management, fraudulent practices, poor capital base, hash economic
condition, poor services etc. let us look at the prevention of financial
mismanagement in the following ways.
a) Management: The responsibility for detection and prevention of
fraud primarily lies with the management. In addition to their business
responsibility management has the judicial role of safe-guarding
assets since the directions(s) of an enterprise or anybody in their place
are regarded by as acting in a stewardship capacity concerning the
property which is under their control. It is the responsibility of the
management to ensure that the operations of the organization are
conducted in accordance with all relevant legal obligations.
The following may among other methods, help discharge its responsibilities
for the detection and prevention of fraud.
b) Installation of an accounting system:
 The installation and the operation of an appropriate system of
internal control including authorization control covering segregations
of duties.
38
 Ensuring that employees understand relevant codes of conduct
 The establishment of an independent internal audit function and
monitoring relevant legal requirements and ensuring that operating
procedures and conditions to meet these requirements. The
management has the responsibility of installing an effective
accounting system.
It is easier to detect and prevent errors irregularities or (when something is
going wrong) where there is a systematic way of doing things than when
there is none. Effective system provides a means of knowing when things
are out of control. Where there is no system you can hardly detect fraud?.
That is why in many organization where proper and effect accounting
system do not exist they suffer losses sometimes running into millions of
naira.
Effective accounting system is defined as an accounting system which
ensures that all financial transactions both incoming and outgoing are
properly recorded. It ensures keeping proper book of account, which could
or should explain the financial transactions of an organization, as at when
required; effective accounting system should cover the following areas.
39
1. Sound and systematic method of recording cash receipt and
payment
2. Sound and systematic method of authorizing receipts and
payment
3. Sound and systematic method of adjusting records
4. Effective means of recording allocation and unallocated stores
5. definition of the basics of accounting records and their
functions e.t.c
6. division of accounting responsibilities in an organization
7. proceedings for filing in, assessing and preparing accounting
documents
8. system of classifying expenditures or income into capital or
revenue items
9. accounting policies and bases such as depreciation and stock
policies and accounting conventions and concepts
10. frequent format and procedures for maintaining assets, records
and ensuring safe custody of assets
2.5 OVERVIEW OF FINANCIAL MANAGEMENT OF ENERGY
DEVELOPMENT FUNDS REFORM
40
The arranged bill of energy development funds of 2008 scale through
establishment in legislative arms sponsored by Hon. Shehu N. Garba in 2013
that seeks to establish the energy development tax and other monies accruing
to it for the purpose of developing diverse sources of energy; useful in
driving industrial and economic growth in Nigeria.
It also seeks to amend petroleum technology development fund Act to
ensure that certain percentages of monies in the fund is transferred to the
energy development fund. These sections emphasized.
ESTABLISHMENT OF ENERGY DEVELOPMENT FUND
There is hereby established a fund to be known as the energy development
fund (in this Act referred to as “the Fund”) into which shall be paid all
monies specified under this Act.
The fund shall be a body corporate with perpetual succession and a common
seal and may:
a) Sue and be sued in its corporate name;
b) Hold and acquire property whether moveable or immovable.
ESTABLISHMENT OF THE BOARD
There is hereby established for the Fund, a Board of Trustees (in this Act
referred to as “the Board”).
The Board shall consist of the:
41
a) Minister who shall be the Chairman;
b) Chairman of Federal Inland Revenue Service;
c) Director-General of Energy Commission of Nigeria;
d) Director-General of Nigeria Atomic Energy Agency;
e) Director-General of Nigeria Nuclear Regulatory Agency;
f) Director-General of National Electricity Regulatory Commission;
g) Executive Secretary who shall be the Chief Executive of the fund
First Schedule
The provisions of the schedule to this Act shall have effect with respect to
the proceeding of the Board and other matters contained therein.
Appointment of the executive secretary
The executive secretary shall be a person with reasonable experience in
recommendation to the Minister
Tenure of office etc.
The executive secretary shall hold office for a term of 5 years in the first
instance and may be reappointed for a further term of 4 years and no more.
The members of the Board shall be paid such allowances as the Commission
may, from time to time, determine;
42
A member of the Board ceases to hold office if he so ceases to hold such
relevant office necessary to be on the Board and the next succeeding holder
of such office shall continue as a member of the Board.
Part III – Powers of the Board
The Board shall be responsible for:
a) Monitoring and ensuring the collection tax by the Federal Inland
Revenue Service and ensuring transfer of the Fund;
b) Managing and disbursing the tax;
c) Liaising with the appropriate Ministries or bodies responsible for
collection or safe keeping of the tax;
d) Receiving requests and approving projects after the consideration;
e) Ensuring disbursement to various categories of energy development
projects;
f) Monitoring and evaluating the execution of projects;
g) Investing funds in appropriate and safe securities;
h) Carrying out public enlightment programmes on alternative sources of
energy;
i) Approving participating and other banks that will participate in the loan
guarantee scheme of the fund;
43
j) Inspecting and examining books and records of all institutions and
persons who are subject to the provisions of this Act;
k) Managing monies of the Fund including making investments as provided
in this Act;
l) Paying and discharging all expenses incurred in connection with the aims
and objectives of the Fund;
m) Formulating policies, rules and guidelines for the management of the
Fund; and
n) Carrying out any other functions and exercising any other power that
may be necessary and incidental to this Act.
The Present Economic Power Sector Reform
This is an amendment Bill 2011. As Act Cap E7 laws of federation 2014
sponsored by Honorable Patric A Ikhariale as the following
1) The electric sector reform of the principle Act PHCN is amended as set
out in this Act
2) Section 8 of the principle Act is amended by
a) Including of inserting immediately after the word supply and re-sale
of electricity the following paragraph provided that any state of the
federation that desires or interested in generation, transmission,
trading, distribution and bulk supply and resale of electricity is
44
empowered under this Act to be involved either directly or otherwise
in compliance with the provision of this section.”
3) This bill may be cited as Electric Power Sector Reform.
45
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION
This chapter discusses the method of collecting the relevant information for
this project. This embraces the particular method technique, system, tools
and procedures by which the research is intended to be carried out. The
research methods employed in any study is highly important for the success
of the project.
3.1 DESCRIPTION OF RESEARCH METHOD
In carrying out this research work, the researcher finds it more convenient to
employ a descriptive method of collecting data comprising of collecting or
gathering data that are summarized and interpreted.
3.2 DESCRIPTION OF POPULATION
The research population of this study is the sum total of the management and
staff of PHCN Plc Abuja various department administration and personnel,
Finance and Account Department (FAD) Material Management department
and lastly engineering department. As at the time of administering the
questionnaire the population of the company staff in PHCN Plc Abuja was
85.
46
3.3 DESCRIPTION OF THE SAMPLE PROCEDURES
The sample size is 25 comprising 5 management and rest are staffs workers
as shown in table below.
No Management Staff
Population 20 65
Sample size 5 20
Having considered the nature of the problem under the study, the type of
data needed and the degree of accuracy required, the researcher has decided
to use the simple random for both the staff/management questionnaires and
customer/Distributors questionnaires.
3.4 DESCRIPTION OF INSTRUMENT USED
Instruments are tools which a researcher employed to investigate
information through data gathering. The quality of research depends on the
quality of the instruments used. If the instruments are faulty, the outcome of
the result will be faulty. If the quality of the instrument is good, the quality
of the research will be good too.
The researcher has decided to collect the information with the help of
questionnaire, direct interview and through observation. Direct interview
with the respondents are important information for data collection.
47
The flexibility not given by written questionnaire can be easily affected
when interviews are conducted with this the researcher ends up collecting
more useful data that he has set up to collect.
Observation is a direct means of studying that observe behaviour of people.
It is one of the oldest ways of research, with this method a researcher can
ways of research, with this method a researcher can be able to observe and
forecast the next coming event.
3.5 DESCRIPTION OF DATA GATHERING PROCEDURE
Basically there are two major consecutive method of gathering data involve
in any research project which are as follows:
a. The primary method of gathering data.
b. The secondary method of gathering data.
The primary methods of gathering data include Questionnaires interview and
observation. While on the other hand the secondary method include
downloaded from internet.
In regard to this study the primary method is used by the researcher that is
the questionnaire method, in addition to the data gathering from the primary
source the researcher gathered more data from secondary source. This
includes annual report of Industrial Training Fund, Abuja researchers,
48
textbooks and magnum. This was necessitated by the importance of other
academic exercise and types and printed materials discovered to be useful to
study.
3.6 DESCRIPTION OF TECHNIQUES USED IN ANALYSIS
The researcher used percentage (%) statistical technique as a means of
analyzing the tabulated data in respect of the questionnaires distributed to
respondents. Also technique was used because of its analysis and better
understanding.
3.7 CONCLUSION
The application of the various method adopted in this research work have
high relatively advantages for the nature, scope and focus of the topic. The
usage and adopting was the goals and objectives for the research.
By the use of the questionnaire, it afforded the opportunity to gather
information from a large number of respondents from different departments
of the establishment.
49
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
4.0 INTRODUCTION
This chapter deals with the analysis of data collected. The data was analyzed
according to statistical techniques for clarity. Techniques such as table
percentage and frequency count is used as a yard stick for the interpretation
of data collected from the questionnaire. Twenty five (25) questionnaires
were administered and only twenty-two were filled and returned.
Below are the population, gender, age and rank of respondent categories –
Table 4.1: Age of the Respondents

Age Respondents Percentage (%)
21-30 5 20
31-45 6 24
45-60 14 56
Total 25 100
Sources: field work/survey 2014
The table above indicate ages from 21-30 numbered where 20% and 31-45
are six of 24% while 45-60 are 14 numbered for 56% total population of
100%.
50
Table 4.2: Gender of the respondents
Gender Respondents Percentage (%)
Male 15 60
Female 10 40
Total 25 100
The table above indicate gender; 15 male while 10 female from 60-4-%
respectively totaled 100%.
Table 4.3: Rank of Respondents

Rank Respondents Percentage (%)
Senior cadre 8 32
Intermediate 12 48
cadre
Junior cadre 5 20
Total 25 100
The table above indicate respondents ranks where senior cadre are 8,
intermediate cadre are 12 while junior cadre are 5 and variety of percentage
within 32%, 48% and 20%
51
4.1 DATA PRESENTATION AND ANALYSIS
Table 4.4: Workers are trained in other to acquire skill, and utilize it in
modern business age.
ALTERNATIV RESPONDENTS PERCENTAGE

E
Yes 16 72.73%
No 6 27.27%
Total 22 100%
Sources: field work/survey 2014.
From the above table 72.73% response to agree which implies that Workers
are trained in other to acquire skill so as to enable organization meet up with
current challenges.
Table4.5: Accounting Department is responsible for financial
management in PHCN.

E
Yes 15 68.18%
No 7 31.82%
Total 22 100%
The table shows that 68.18% of the respondents agreed that Accounting
Department is responsible for financial management in PHCN while 31.82
of the respondents disagree with this.
52
Table 4.6: Can estimates be used as basis of formulation of budget?
E
Yes 8 36.36%
No 14 63.64%
Total 22 100%
36.36% response indicates that estimates can be used as a basis of
formulation of budget while 14 respondents represent 63.64% response to
disagree.
Table 4.7: Do you agree that historical figures can be used for the
preparation of budget?
E
Yes 22 100%
No - -
22 100%
The 100% response agree that historical figures can be used for the
preparation of budgets
Table: 4.8: Is it possible for budgeting control to operate where there is

little or no attempt to specific long term aims.
53
Yes 19 86.36%
No 3 13.64%
Total 22 100%
The above table shows that 19 respondents representing 86.36% agree that
it is possible for budgeting control to operate where there is little or no
attempt to specific long term aims while 13.64% of the respondents disagree.
Table 4.9: Do you agree budgeting and planning is the most efficient
and effective way of controlling future expenditure.
E
Yes 22 100%
No - -
Total 22 100%
The 100% response agreed that budgeting and planning is the most efficient
and effective way of controlling future expenditure
Table 4.10: Is budgeting and planning of any importance in controlling

future expenditure?
E
Yes 22 100%
No - -
Total 22 100%
54
The 100% response agreed that budgeting and planning is of importance in
controlling future expenditure.
Table 1.11: Does the ministry apply budgeting and planning procedures
to its own operation?
E
Yes 22 100%
No - -
Total 22 100%
The above table shows 100 respondents agreed that the ministry apply
budgeting and planning procedures for its operation while 100% respondents
are disagree
Table 4.12: Do you agree that preparation and implementation of

budget and plans involves cost?
E
Yes 15 68.18%
No 7 31.82%
Total 22 100%
From the above table 68.18% agreed that preparation of implementation of
budget and plan involves costs.
55
Table 4.13: For the purpose of budget preparation, do you agree that
there is a need for cooperation between the Chief Executive and the
Subordinates?
E
Yes 22 100%
No - -
Total 22 100%
100% response agreed that for purpose of budget preparation there is need
for cooperation between the Chief Executive and the Subordinates.
Table 4.14: Is it necessary for budgets to cover all phases of operation of

the ministry?.
E
Yes 22 100%
No - -
Total 22 100%
The 100% response agreed that it is necessary for budgets to cover all phases
of operating the ministry.
Table 4.15: Is planning a primary task of management?

56
Yes 22 100%
No - -
Total 22 100%
The highest response of 100% agreed that planning is a primary task of
management
Table 4.16: Is planning of any benefit for the purpose of control?

E
Yes 22 100%
No - -
Total 22 100%
100% response indicates planning is of benefit for the purpose of control.
Table 4.17: Do you agree that there is an extent to which budgeting and
planning contributed to the realization of targeted goals of the ministry?
E
Yes 22 100%
No - -
Total 22 100%
57
Here too, 100% responses indicates that there is an extend to which
budgeting and planning contributed to the realization of targeted goals of the
ministry.
58
Table 4.18: Do you agree that the ministry has been complying to its
established budget?
E
Yes 10 45.45%
No 12 54.55%
Total 22 100%
45.45% respondents agreed that the ministry has been complying to its
established budgets. While 12 respondents representing 54.55% disagree
with the above statement.
Table 4.19: Do you agree that the cost involved in the preparation and
implementation of budget and plans justifies the means?
E
Yes 13 60%
No 9 40%
Total 22 100%
The table above indicates that 60% of the respondents agreed that the cost
involved in the preparation of budgets and plans justifies the means.
Table 4.20: Do you agree that there is coordination between the

budgeting departments and other departments.
59
E
Yes 20 90.90%
No 2 9.1%
Total 22 100%
90.90% responses indicates that there is co-ordination between the
budgeting department and others
Table 4.21: Is it possible to establish other controls besides budgeting

and planning?
E
Yes 16 72.73%
No 6 27.27%
Total 22 100%
Table 4.21 shows that 16 respondents representing 72.73% response agreed
that it is possible to establish other controls besides budgeting and planning.
Table 4.22: Has there been commendation on the role played by

budgeting and planning as a means of control?
E
Yes 22 100%
No - -
Total 22 100%
60
100% responses agreed that there has been commendation as to the role
played by budgeting and planning as a means of control.
Table 4.23: Is there any problems associated with the preparation and
implementation of budgets and plans?
E
Yes 22 100%
No - -
Total 22 100%
Table above indicates that 100% agreed there are problems associated with
the preparation and implementation of budgets and plans.
4.2 SUMMARY OF FINDINGS

Base on the analysis it was found out that;
i. The ministry used budgeting as control tool for future expenditure.
ii. The Ministry embarked on long term strategic planning and budgeting
techniques to minimize its expenditure.
iii. Budgeting and planning is the most efficient and effective way of
iv. There are problems associated with the preparation and
implementation of budgets in the ministry.
v. Budgeting and planning I importance in controlling future expenditure.
vi. Budgeting and planning contributed to the realization of target goals of
the ministry.
61
62
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 INTRODUCTION
The researcher in this chapter gives the summary, conclusion and
recommendation of the study.
5.1 SUMMARY
The effect budgeting as a control tool in public sector cannot be under
estimated. The reasons it is used to control future expenditure. this In
chapter one, concerted efforts are made to introduce the subject matter,
highlights some of the general problems and objectives as well as
significance of the study and also the historical background of the study are
statement of questionnaires and definition of terms as opposed to dictionary
meaning, together with some limitation of the study.
Chapter two deals with the power sector reform and opinion of authors,
professionals and renown scholars on the subject maters with consideration
on other important discussion, intended to throw more light on the research
study as, purpose and objectives of budgeting, types of budget, and the
functions of budget committee in energy development reform, and benefit of
budgeting. Chapter three deals with the research methodology used in the
63
gathering or collection of necessary data required to enrich the study
questionnaires and documentary.
Chapter four the collected data are presented and analyzed with
comprehensive table of acceptances.
Finally chapter five comprises of entire summary of the research work,
conclusion arrived at and recommendations proffered on the objectives and
comprehensive appreciation of the research study.
5.2 CONCLUSION
The focus of this study is budgeting as a tool for planning and control.
Budgeting has been described as a plan quantified in monetary terms,
prepared and approved prior to a defined period of time.
The ministry oversees the performances of the staff in order to enhance
smooth performance and subsequently the realization of the objectives.
Hence the researcher suggests budgeting and planning to facilitate control of
the future expenditure.
The writer undertook the research of the organization to find out whether the
Ministry applies budgeting and planning procedures to its operations and in
particular the control of its future expenditure. Moreover, if it had done that,
64
how had it being done and to what extent as well as finding out the
efficiency and effectiveness of the system on the Ministry. To this end the
researcher set two basic assumptions or (hypothesis as a bases for the
research study which conclude that;
The Ministry embarked on long term strategic planning and budgeting
techniques to minimize its expenditure. There was effective budgeting and
planning procedure in the state and in terms of control, the strategic plan of
the Ministry proved beyond reasonable doubt that budgeting and planning
are suitable for controlling future expenditure.
Based on the finding the researcher identifies that various problems and
difficulties usually associated with budgeting and Budgetary control. Among
these are:
However, the researcher is not claiming mastering of these problems.
Budgeting develops around the existing organizational structure and
departments which may be in appropriate underlying economics realities.
The every existence of well documented planning and budgeting may cause
lack of flexibility in adapting to change. There is managerial problem in
selecting the level of attainment to be included in budgeting and standards.
65
Variances are frequent due to changes in circumstance, poor forecasting, and
general uncertainties. The budgetary system, perhaps because of undue
pressure or poor human relations may caused antagonism and decrease
motivation.
5.3 RECOMMENDATIONS
1. The researcher is of the opinion that budgeting and planning of the
Ministry should be maintained and pursued until fully realized.
2. The Ministry should employ competent and intelligent staff with a lot
of experience to facilitate the planning, organizing and
implementation of the budgets and plans which will go a long way in
controlling the future expenditure of the ministry.
3. To support the above recommendations, on the division of labour
within the private sector commercialized in the ministry should be
encouraged as well as registration with professional bodies.
4. To ensure that budgets are realistically established and coordinated
satisfactorily, functional heads are to present their budget to the
committee for approval
5. Managers are to be motivated in order to strive to achieve
organizational objectives and staff should be given incentives for
good performance.
66
6. The organization should try as much as possible that budget manual is
circulated to all the individuals responsible for preparing budgets.
Furthermore, budgets and plans should be reviewed on a continuous basis to
ensure that they are operated effectively and efficiently to facilitate the
realization of the goal which is the control of future expenditure of the
ministry.
67
BIBLIOGRAPHY
Aliyu B. Kwajaffa (2013). Development Administration.
Argysi, C. (1985) Human Problems with Budgeting Pitman Publishers
London. 2nd Edition, pp. 59-63
Beyer R. (1999): Profitability Accounting for Planning and Control,
London Ronald Press
Burmaro H.S. (1997): Business Budgeting controllership, New York
Foundation Inc.
Chu.S.P. Okwonkwo (1984). Promotional Activities the Nigeria Economy:
Proposal of Stabilization.
Heikoff, J.M (1980) Planning and Budgeting Municipal Heiman Publishers 7th
Edition P 85
Illersk, A.R (1980) Statistics Macmillan Publishing Company London 4th
Edition PP. 100 – 135
Luck and Rubin (1992) Marketing Research Prentice Hall of India private Ltd.
M- 97 Comarglet 7th Edition PP. 8 - 15
Lucy, T. (1989) Cost Accounting Heiman Publishers London 3rd Edition
P. 33
Mortarland, SL (1989) Cost Accounting Longman Publishers London 6th Edition
National Assembly Journal (2014). Bill of Reform HB 50 and 120
Onitsha Africana Fep. Ltd. 1st Edition PP. 1-18
Osuala, E.C (1982) Introduction to Research Methodology
68
APPENDIX I
ABUJA ELECTRICITY DISTRIBUTION COMPANY
Office of the Head of Civil Service of the

Federation,
Federal Training Centre,
Maiduguri, Kaduna
2nd June, 2014
The Human Resource Officer,

Abuja Electricity Distribution Company,
Zone 4 Wuse – Abuja.
Dear Sir/Madam,
LETTER OF INTRODUCTION
I am Surajo Hamza A. Hafizi a student officer in Federal Training Centre,
seeking Higher National Diploma in the Department of Public
Administration.
I am appealing for your organization to responds to questions raised on the
questionnaire attached to this letter, the information are needed for the
successful completion of my research work (An Appraisal of Budgeting as a
Tool for Effective Control in Public Sector, A case study of (P.H.C.N)
Ministry of Power).
Yours faithfully,
Surajo Hamza A. Hafizi

(CCO SGT-AT-ARMS NASS, Abuja)
69
APPENDIX II
QUESTIONNAIRE
1. Respondents’ Age
21-30 [ ]
31-45 [ ]
45-60 [ ]
2. Gender
Male [ ]
Female [ ]
3. Rank
Senior cadre [ ]
Intermediate cadre [ ]
Junior cadre [ ]
4. Do you agree that budgeting can be used as control tool for future
expenditure?
Yes [ ]
No [ ]
5. Can budgeting be regarded as a way of managing?

Yes [ ]
No [ ]
6. Can estimates be used as basis of formulation of budget?

Yes [ ]
No [ ]
7. Do you agree that historical figures can be used for the preparation of
budget?
Yes [ ]
No [ ]
8. Is it possible for budgeting control to operate where there is little or no

attempt to specific long term aims.
70
Yes [ ]
No [ ]
9. Do you agree budgeting is the most efficient and effective way of

Yes [ ]
No [ ]
10. Is budgeting of any importance in controlling future expenditure?

Yes [ ]
No [ ]
11. Does the ministry apply budgeting procedures to its own operation?
Yes [ ]
No [ ]
12. Do you agree that preparation and implementation of budget involves cost?
Yes [ ]
No [ ]
13. For the purpose of budget preparation, do you agree that there is a need for
cooperation between the Chief Executive and the Subordinates?
Yes [ ]
No [ ]
14. Is it necessary for budgets to cover all phases of operation of the ministry?.
Yes [ ]
No [ ]
15. Is planning a primary task of management?

Yes [ ]
No [ ]
16. Is planning of any benefit for the purpose of control?

Yes [ ]
No [ ]
17. Do you agree that there is an extent to which budgeting contributed to the
realization of targeted goals of the ministry?
Yes [ ]
No [ ]
71
Undecided [ ]
18. Do you agree that the ministry has been complying to its established budget?
Yes [ ]
No [ ]
19. Do you agree that the cost involved in the preparation and
implementation of budget justifies the means?
Yes [ ]
No [ ]
20. Do you agree that there is coordination between the budgeting departments
and other departments.
Yes [ ]
No [ ]
21. Is it possible to establish other controls besides budgeting?

Yes [ ]
No [ ]
22. Has there been commendation on the role played by as a means of control?
Yes [ ]
No [ ]
23. Is there any problems associated with the preparation and

implementation of budgets?
Yes [ ]
No [ ]
72

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AN APPRAISAL OF BUDGETING AS A TOOL FOR EFFECTIVE

CONTROL IN PUBLIC SECTOR: A CASE STUDY OF POWER SECTOR

SURAJO HAMZA .A. HAFIZI

BEING A RESEARCH PROJECT SUBMITTED TO FEDERAL TRAINING

CENTRE MAIDUGURI IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD OF HIGHER NATIONAL DIPLOMA

This is to certify that the research work An Appraisal of Budgeting as a Tool of

acceptable in partial fulfillment for the award of Higher National Diploma in

the Academic Board.

This project work is dedicated to my great inspiration of the infinity of Allah’s

We hereby recommend to the Federal Training Centre the acceptance as

titled: An Appraisal of Budgeting as a tool of effective control in public sector a

award of Higher National Diploma In Public Administration.

Sign ___________________ Sign ___________________

Date ________________ Date ________________

work apprentice, certificate in local government study, diploma in Public

Administration, Basic Security for Sergent of arms Department of the clerk

national assembly which I declare my loyalty and service and professional

certificate in membership (ACIA). I forward my need to Federal Training Centre

seeking Higher National Diploma in Public Administration.

I am profound grateful to my.

- And members, I love you all.

production (generation, transformation and distribution) is for both a growth

of all industries as well as an entirely new industry with scientific

technological effect on the other sectoral activities.

The key to achieve operational excellence, therefore is in effectively flexible

management of resources and this means optimizing and scheduling people,

processes, vehicle equipments and materials so that utilization is maximized;

while business goal are achieved through appraisals in sufficient timing

plan, not been frequently source of difficulty on account of it lateness, quite

meaningful project which is likely to be small and restricted to it local

prospective and the cyclical that will be implemented in time to effect

And appraisal of budgetary as a tool for effective control in a public sector

determining the wealth of any nation every extent on human resource,

environment resource and value of human effort as resources for any

cannot be all emphasized. The capacity building developing and maintaining

the various tasks of organization, these is issue of importance; and is a

development is known to no political, religions, or ethnic boundaries. It

this background that the researcher investigate the resources on the

organizational development inter-sectorial balance.

1.1 BACKGROUND INFORMATION

development was set up at various towns, some of them by the federal

Native Authorities and one or two large municipals authorities. Electricity

corporation of Nigeria 1950 in order to integrate power development and

make effective the electricity corporation of Nigeria ordinance No. 15 of

transformation and distribution with sales of electricity to all consumers and

customers in Nigeria as (ECN).

NIGER DAMS AUTHORITY

of water power improving navigation and promoting fisheries and irrigations

on schedule in the December 1968.

(NEPA) NATIONAL ELECTRIC POWER AUTHORITY

In September 1969 the federal military government decided to merge the

electricity corporation of Nigeria and the Niger Dams Authorities into a

single body. A year left a year later a Canadian firm of consultants

“SHOWMEN LURRUTED” was appointed into technical details of the

merger. The report was submitted on November, 1971 by Decree No. 24 of

27 June 1972 and effective 1st April 1972.

Authorities existed until development plan of the power system of 1982-

authorities are to develop and maintain an efficient coordinated and

economic system of electricity supply for all parts of the federation.

Prior to privatization programmes that was introduced during the regime of

subsequently Power Holding Company of Nigeria sub-commercialized it

Sign _ Sign _

Date Date