BUDGET AND BUDGETARY CONTROL SYSTEM AS A TOOL FOR EFFECTIVE DECISION AND PLANNING A CASE STUDY OF ETERNIT LTD, SAPELE

ABSTRACT

Budget and budgetary control system as a tool for effective decision and planning in Nigeria recently starting receiving immense attention in most national dallies, since it was considered as one variable tool in improvement of a national economy. There has been some contribution and assertions in some parlance that for a firm or an organisation to increase in their capital income, it is imperative that individual or the organisation should maintain a budget and budgetary plans system. It was against this background that the Federal Government of Nigeria through the apex bank (CBN) constitutes the bankers committees to give the anticipated financial assistance to individual and organisation with sound business proposal, the formation of budget and budgetary control. This formation of budget and budgetary control was a modus operandi by Federal Government to improve the national economy through the encouragement of indigenous technology. The Federal Government was saddled with the responsibility of financing the budget and budgetary control system with low risk burden and favourable profit and returns

TABLE OF CONTENTS
Title i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of Contents vii
CHAPTER ONE – Introduction
Background to the Study 1
Statement of the Problem 2
Objective of the Study 3
Significance of the Study 4
Research Question 4
Scope of the Study 5
Limitation of the Study 5
Definition of Terms 6
CHAPTER TWO – Literature Review
Introduction 8
Budget Defined 8
Administration of the Headquarter 10
Budgetary Control 12
Budgeting 14
Organisation for Budgetary Control 16
The Essential and Requirement of Budgetary Control 17
Type of Budget 18
CHAPTER THREE – Research Methodology
Research Design 22
Population of the study 22
Sample Size 22
Sampling Technique 23
Research Instrument 23
Validity of Instrument 23
Reliability of the Instrument 23
Method of Data Collection 24
Method of Data Analysis 25
CHAPTER FOUR – Data Presentation and Analysis and Interpretation
4.1 Introduction 26
4.2. Presentation of Senior Staff Questionnaire 26
CHAPTER FIVE – Summary, Conclusion and Recommendation
Summary 33
Conclusion 34
Recommendations 36
Suggestions for Further Studies 38
Bibliography 39
Appendix I 40
Questionnaire 41

CHAPTER ONE

INTRODUCTION

BACKGROUND

It was due to the participation of the federal government that led to the establishment of various housing operation in Nigeria. Government participation in various housing corporation was due to take of adequate, guidelines and unnecessary high expectation of both public and the government. However, this housing corporation despite the clamor for housing for all vision 2010” (Below year 2010) by government has not been able to meet the high demand of housing in the federation.
The function of the company includes, to acquire, develop, hold, manage, sell lease or led to persons or companies, land, landed properties, residential, houses, officer and industrial buildings within and outside the state.
However, the following are the activities carried out by the company.
Acquisition and development of land or states.
Acquisition, construction and maintenance of repairs of any structure, plant or machinery necessary or desirable for the provision of electricity or connection with any building owned, constructed or managed by the company. Establishment and over securing of any subside ring that may carry out any special programmed building project or needing specialized services in building industries.
Mortgaging and changing any of the real estate properties acquired and to issued out per or at perineum or discount mortgage debenture redeemable or payment or collectable to further secure any securities of the company by trust and deed or other assurance of road, scheme. Provision and maintenance of road, footway, bridges, drain, water courses, open space public amenities for or in connection with the housing estate owned.
Statement of the Problem
Shelter amongst the three basic need of human beings, world over, remain a crucial need for the security and protection of life from external of internal attacks of all sort.
More so, the need to own and the provision of b=human houses to its citizens is a great challenges both to the individuals and government of any county.
However, the building industry or sector is basically that of services whether state or federal housing authority which consequently requires relevant current and effective budgetary. Control strategies that would sustain the surenial of the industry as well as making it profitable. However, the DDPA as a state government owned aim is focused to make sure the problem associated with housing by the people of delta state totally reduce, managed and it possible eradicated.
The firm is faced with problem of improper management and lack of proper financial which has left its official to retort to corruption with nonstandard illegal structure taking away that of its capital “Asaba” and other major towns in the State.
Objectives of the Study
The aims and objective of the researcher on the study is to carry out an investigation and to examine the problem of budgetary deviation in Eternit ltd Sapele with the view to see how the adoption of budgetary control, contribute to its growth thus, the aims and objective of study are;
To examine the problem of budgetary deviation in the organization with the view to see how the adoption of budgetary control contribute to its growth.

To study budgeting and budgetary control and the adoption in government organization and parastals with particular reference to DDPA with the aim of pointing out the factors militating against the growth and development of the company.
To show how budget and budgeting control techniques are use as tools for management efficiency.
To show how budget and budgetary control techniques are used as tools for management efficiency.
Significance of the Study
Budget and budgetary control techniques are important aspect of any business as it guarantees that in the event of financial losses in expenditure over estimated revenue, the need for budgetary control devices play a significant role to enable the firm meet up with it services operations by the proper identification of the bottlenecks that can march the survival of such business.

However, the identification of budget and budgetary control problems that have stood against the progress of the “DDPA” with reference to the building sector” in Nigeria will serve as a to all interested parties. The outcome of this work shall be beneficial to the public as it shall be used as a reference point and source of information for others who will have need for further studies in other area that may not be covered by this study.
Research Questions
What advice would you wish to give the organization for the preparation, monitory and execution of budge and budgetary control?
Does your organization operate a budget any control system?
What is your assessment of the operation of the various types of budgets.
Is your organization involve in budget preparation?
Scope/Delimitation of the Study
This has to do with Eternit Ltd Sapele and how budgets and budgetary control system has make the firm in spite of its short coming to maintain a standard and keep it growing against the imbalance and bottleneck which has crumbled most housing corporation today in Nigeria.
However, its noted, that, many firm has failed in their operation due to the fact that, motive are always centered on the profit maximization of its products without comparing cost sales of the previous year over subsequent.

Limitation of the Study

The research work is limited to Sapele. The company was selected for this work because it is the leading indigenous company in the stated ranked amongst the top five (5).
Time, finance and lack of adequate information were also limiting factors that did not make study more in-depth and wide it’s also a notable fact that the industry (building) in Nigeria is not given the proper relevance it deserves due to the prevailing harsh economy conditions.
Definition of Terms
Client: Is the building owner and be undertakes to finance the project.
Real Estate: All land together with improvement on land in form of residential properties, roads and different types of civil Engineering constructions like bridges, dam etc attached to land such as plants machinery and fixture.
Management: Achieving slated objectives usually to produce good s and services by directing human and other resources toward ends objectives.
System: An organized unitary whole, composed of two or more interdependent part, components or subsystem and delineated by identifiable boundaries from its environment supra system.
Maintenance: Work undertaken in order to keep restore or improve every facilities.
Committee: A group of people formally appointed and consider matters laid down by slated term of references.
P.E.R: Performance evaluation report
HOD’s: Heads of Departments
Housing Scheme: A programme set up to provide accommodation for people at no cost or lower cost with a view of not making profit.
Housing estate: An area in which a number of houses for living in, are planned and built at the same –time.
I.C.M.A.: Institute of cost and management accounting.
S.A.S.S: Site and services scheme
Renovate: Restore old building to good condition
D.D.P.A.: Delta State Development and property Authority.
D.D. P.A.: Delta State Development and Property Authority.
S.B.U.: Strategic business units.

CHAPTER
REVIEW OF RELATED LITERATURE
2.1 Introduction
In this chapter, the researcher to look into, or review the related literature of relevance to the subject matter, however, to allow the researcher to have a comprehensive study, the chapter has been into different related to the subject matter.
Budget Defined
A budget is simply a plan to future activity necessary to achieve specific goals or objective, usually the plan is qualified in monetary term but not always, it provides a standard for comparison with the results actually achieve.
According to Okwelum, Onyema Chukudi (2012) Fundamental of business law defined budget as the qualification of plan of action purposed towards some future objective.
According to Agbawe and Eloho (2011) defines budget as qualities of expectation regarding future revenue, cash flow, expenditure and financial outlay supported by the various plan of actions which service as the planning and control of resource and operations of government establishments and agencies
Also, according to Okpamen P.E. (2002) business finance; defines budget as the coordination and implementation of such action which measures appropriately the financial feasibility or commercial viability of a plan and hence whether the plan has any economic scene, Davidson in his book “Modern accounting techniques, sees budget “as a coordinated program or plan of operation shred into responsibility areas, indicating amounts expected to be required for specific purpose, or received from responsible management.
Analysis of the above definitions reveals the following essentials of a budgeted. A budget is a monetary and/or quantization statement.
A budget is prepared prior to a defined period of time. It is prepared for the definite future period. It specifies that policy to be followed to attain a given objective, which must be laid before the budget is prepared.
Budget, therefore is a plan which has been carefully prepared for all phases of operation for a business in a definite future period at time. In fact, one can say that without a budget a business may wonder aimlessly. It may never go anywhere, but with a budget, a business may reached its planned destination, but the exercise of budgetary control will not be deviation from the original plan and thus provide the opportunity for necessary corrective action.

From this chart it is quite obvious that the heads of division are responsible to general manager who is the brief executive of the authority. These Divisions are the administration general and legal division, works services division, finance and supplies division and estate services division, there are also unit and the internal audit unit.
Administration of the Headquarter
The headquarters is originated and administrated under the following divisions.
Administration, General and Legal Division
This is headed by the secretary to the authority, who is responsible to the chief executive for execution and implementation of polices and boards division on matters in respect to function like recruitment, selection promotion and administration of wages and salaries economic in good time, that is when the authority is in good time, that is when the authority is in good financial position, vacancies will be filled and in bad time the strictest economy will be applied.
Legal: By legal factor, the secretary with the advice from the legal officer sees that the authority does not do anything against sues. He makes sure that no employee is unduly sacked. The implementation of law is also part of his schedule duties.
Social factor: He sees that welfare of the authority. He makes sure that every staffs get his/her due benefit.
Work / services and supplies division: This division represents the authority in all aspect of architectural works.
Accounts and finance division; This division is currently headed by deputy chief accountant (A professional accountant i.e. ACA and FCA). The division is responsible for the payment of wages /and salaries. Settlement of cleans and receipt of monies, it duties also included dealing with other financial institution for the authority, both for paying and receiving monies, seeing that the financial affairs of the authority is property managed and of course in a systematic manner to avoid and detect fraud.
Estate services division: This division is headed by the deputy principle estate manager who also acts of the chief executive of the authority. This division is responsible for the maintenance of all estate and in charged with the service of mortgage section of the authority including the lands legist.
Authority registries: This is the first and last place of call of call official’s letters (non-confidential) in and outside the authority. These letters are first are first filled and munity to the schedule officer by office in charge of the register, which rank fall within the bracket of level 06 to 08 his or her assistance confidential registries: this registries handles all the confidential and classified documents, annual reports progress report promotions advancement and also demotion in rank.
Mortgage registry: This registry is under the Estates services division and had some dealings with the ministry of land and housing. It also has connection within the state deeds registry for registration of such document and finally with the ministry of finance who collect source amount of money before the deed document is finally executed.
Land registry: This division is responsible for all lands matters in the authority.