CHAPTER ONE

INTRODUCTION

Background of the study

Budgeting is essentially concerned with planning. According to Hausen .O. (1990). Dr. Jones discovered, failure of plan, either formally or informally, can lead to financial disaster. Careful planning is vital to the health of any organization. If that is the case, what role does budgeting play in planning and control? Simply put, plans identify objectives and action needed to achieve them. Budgets are the actions needed to achieve them. Budgets are the quantitative expression of these plans. States in either physical or financial terms or both. Thus a budget is a method for translating terms. As a plan of action budgets can be used to control by comparing actual outcome as they happen with the planned outcomes. Furthermore, according to Professor Anya O. Anya April 28th 2006, guarding newspaper, the universities and the challenge of a knowledge is based on the economy (2) the said “we have seen that economic and human development indices presently confirm that Nigeria is a very poor country where otherwise immense resources and potentials have not been realized as a result squander and poor management. We have dedicated from the above points that planning budgeting and control is very essential in all sphere of endeavor be it public or private sectors. In other words, the necessary uncertainty and complexity in the socio-political economic and public sectors of Nigeria society have been made it very difficult for co-operate entities irrespective of the nature of their business (profit oriented or service oriented) coupled with the changes in social, economic, technological and political system to achieve optimal result without setting proper planned targets. With the trend of failure recently witnessed in the financial sector, arising from factors both internal external organizations and their management should ensure that they had decision about their future.

The concept of economic scarcity of resources implies that economic units including tertiary institutions, parastatals etc. must stick to action satisfaction. There may be no reason for government to establishment which the management are no strived to achieve viability for optimal result such establishments should be deliberately abandoned in order to pave way for release for the pursuit of other more economically viable investments. We should realize that abandonment is a key to innovation but because, it frees the necessary measures and also it stimulates the search for the new ones that will replace the old ones. However, it is for the sake of avoiding such abandonment that the researcher wanted to find out the impact of budget and budgetary control as technique to managing the business dynamics to evolve long term survival strategies of tertiary institutions.

1.1 STATEMENT OF THE PROBLEM

According to Cohn Drury .A. (1987). He stated that the actions that follow managerial decisions normally involve several aspects of the business. When the fail to do this, have is a danger that managers may make decision that they believe are in the best interest of the organization when in fact best interest of the organization when in fact taken together, they are not. Tertiary institution is a non-profit making organization in most cases pays little or no attention towards the achievement of any set goal. Give to the fact that they not for profit making purposes, for proper, planning, budgeting and effective control system become an illusion. This has resulted into financial crisis which culminated into inadequate provision of learning infrastructural facilities, delayed / nonpayment of salaries, strike actions and lack of commitment to work among staff members. These institutions also cannot make—up even with the subventions given to them by the government. This has been attributed to various factors prominent among which is the ineffectiveness of budget and budgetary control system in these institutions. This research work is therefore designed to ascertain the impact of the budget and budgetary control in tertiary institutions through a case study of Imo state university.

1.2 SIGNIFICANCE OF THE STUDY

Budget and budgetary control is a tool for management control. As with any other aspect of management, the budget process and budgetary control may or may prove successful in assisting government or individuals to achieve its goals. The use of budget is not a cure all for all organizational problems. It is the purpose of this research work to address the following: 1. To avail the application of budget and budgetary control as a management technique in tertiary institution 2. To determine the extent to which ill-defined goal would be a conduit pipe for siphoning government resources 3. To find out whether budget and budgetary control serve as a control mechanism 4. To find out what it takes for budgetary to be eective in management in tertiary institution 5. To determine the extent to which budgetary provides.

1.3 OBJECTIVES OF THE STUDY

Budget and budgetary control, is intended to serve the management as a constant reminder of the plan they have adopted. As such, it provides a blue print they can consult from time to time as they work to implement the sense, it serves as a set of general instructions of the department / management and divisional management reflecting them the actions they have agreed to take and to results they have agreed to strive for. In summary of the following, budget and budgetary control has the below mentioned objective: 1. To examine the benefit of budgeting in the management of tertiary institutions. 2. To know the level of implementation of budgeting in the administration of tertiary institutions 3. To identify the challenges of budget implementation in tertiary institutions.