ABSTRACT

This research work is carried out to determine the impact of budget and budgetary control with special reference to Morris fertilizer company Minna Niger State. This topic is chosen because of dearth in the awareness as regards the contribution of budget and budgetary control in the improvement of the overall performance of an organization.

However for the purpose of this work the researcher highlights the purpose an affective budgetary control could serve an organization.

Types of budgets preparation of a budge manual as well as the budgeting concepts with emphasis on the planning programming budgeting system (PPBS) was death with extensively in the project work by the researcher.

Data were collected from both primary and secondary sources the analysis of the researcher brought out a population size that he used to determine the basis for the information gathered and analyzed.

The use of chi-square (x2) helped to further the test of the data gathered and interpreted. The findings of the research observed by the help of the questionnaires interview analysis and hypothesis testing reveals the findings as contain in this research work.

Based on the result of the hypothesis empirically tested the researcher concluded that the impact of budget and budgetary control in Morris fertilizer company Minna is positive and that effort should be made to educate staff on the need for implementation of budgetary control system.

The researcher also warn strictly that for better result to be achieved in government parastatals the stated recommendation should be adopted.

CHAPTER ONE

         INTRODUCTION

1.1     OVERVIEW OF THE STUDY  

Budgeting is essentially concerned with planning and its implementation of expected income and expenditure for a special period of time.

There is need for good planning of the budget in every organization because any organization that does not plan and implement its budget is expected to encounter a lot of problems. These problem range from mismanagement of limited research to reckless management habit of not adhering to budgetary control measure.

Budget and budgetary control are two accounting techniques which top management adopt to achieve it task of planning co-ordinating directing and control in an organization.  Planning is mainly concerned with the future and selection of policies, strategies, tactics and action required to achieve these objectives.

Planning was previously based on historical cost conventions. This process increased the emergency decision which top management had to make because historical cost conventions are aid future oriented they do no aid planning.

In order to reduce to management’s emergency decision making process and this and planning variable budgets were introduced. This is so because managers want to know more than they have done currently in relation to cost period performance they also wants to know how they have done currently in relation to their current targeted performance.

Control on the other hand follows closely after action has taken. It is a process where by actual performance is compared with targeted/ budgeted performance any deviation from his target are investigated for an in depth or positive explanation given.

Budgetary control is the techniques used for this purpose and when it is combined with budget it becomes part of reasonability accounting. This aim of budgetary control is to provide a formal basis for monitoring the progress of the organization as a whole and of its component part towards that achievement of the objective specified in the planning budgets.

Budget enjoy a wide application they can be used in our private houses where a civil servant who earns a monthly income will map out his objectives and plans effectively with what he has to achieve those objectives.

BACKGROUND INFORMATION OF MORRIS FERTILIZER  COMPANY

The research work on the impact of budget and budgetary control on the performance of Morris fertilizer company would not be complete without background information of the organization.

PURPOSE OF THE STUDY

The purpose of the study is to find out the impact of budgets and budgetary control on the performance of Morris Fertilizer Company a government-established organization in Minna Nigeria State.

Special component of planning and control process will be empirically tested to determine whether the impact is positive or negative.

This study will slow how budgeting helps organization towards the right step in achieving desired goals and also how it will tackle the problems that will be highlighted below. This study has the following objective.

1. To ascertain the role played by budgets in the over all performance of the organization under study.
2. To ascertain to what extents budgets are implemented for achievement of result in Morris fertilizer company.
3. To identify how budgets can be used to control expenditure on the hand and assist revenue generation on the other hand.
4. To identify problem encountered in budget preparation and implementation
5. To issue recommendation for improvement

From the organization above  it can be seen that Morris fertilizer company is been headed by the general manager besides the  general manger there are five directors assigned to different responsibilities in the organization. We have director investment and loans who is responsible for all inventible   undertaken by the organization and     he also takes charge of leave and other investment responsibilities. Director personnel manageemnt handles all aspect of firm employment of firm employment of staff the director finance and supplies is responsible of making sure that funds are always available to meet the companies daily responsibilities. The director administration is responsible for daily managerial administration of the corporation and staffing of all its workers.

STATEMENT OF PROBLEM 

Budgeting is the formulation of plans both long and short range for future activities that seeks to substitute carefully studies action of how to attain the desired goads and provide measure through which deviation from planned achievement can be evaluated. The process of budgeting lead to budget which the institute of cost and management accountant defined it as a financial and quantitative statement prepared and approved period of time of the policy to be pursued during the period for the purpose of attaining a given objective. It may include income expenditure and the employment of capital

Since the sole purpose of organization is profit maximization a properly concerned budget may or may not lead to a goals because of problems involved in budgeting and budgetary control the variation between the actual performance and the budget result could be checked and corrective measure taken immediately. This leads to the need to control the budget.

The institute of cost and manageemnt accountant defined budgets relating the responsibilities of executive to the requirement of a policy and continuous comparison of actual with budgeted result either to secure by individual action. The objectives of that policy is to provide a firm basis for it revision

SIGNIFICANCE OF THE STUDY

The significance of choosing the impact of budgeting and budgetary control is in order to show how the designed goals of the organization could be attained through the use of budgetary system

Budgeting perform he broad function of planning co-ordination communication motivation and control.    These functions if properly defined and followed will lead to the success of a business. The success of having a properly budgeted figure and the resultant good profit to some extent on which prepares the budget. Since budget can be looked at a way leading to the destination if follows that the person making the journey cannot reach its destination unless the way is properly patched and followed. Therefore the responsibility of preparing a budget should be left in the hands of highly qualified and experienced personnel who are charged with the stewardship of the organization.

Planning as budget function arises when the executive meet to decide on the goals on the organization periodically. There must be an evaluation the progress that has been made re-evaluation of the objective if changing condition indicates the need for revision. The establishment of budget brings along the definition of the specific functions to be performance by various executive in their respective divisions.

The contents of a master budget would have to be divided into various departmental budgets, which give details of what each department is expected to perform and in order to achieve the group objective. These goals will not come automatically steps must be taken to ensure that the goals set by top management are understood and acceptable to subordinates

Communication plays a very important role in the business operations. It is often said that the first executive functions is to develop a very effective system of communication. The activity of each subordinate must be communicated to him and any deviation from the set objective being reported for corrective action to be taken.

If the above budget functions are not left to highly qualified and competent persons then inaccurate and inefficient system of budgetary control would emerge and the result would be unfavorable to the set objective of the corporation

A carefully designed budget gives a sense of direction to an organization. if solution to this problems re properly followed will lead business to success and to the benefit of Morria fertilizers company  Minna Niger State               

SCOPE AND LIMITATIONS

SCOPE:     The scope of this project we be restricted to the problem of the budget of the working capital of the organization concerned and not perspective budgetary such as budgets of long term capital.

LIMITATION:   This project work is limited by the following factors.

a)       TIME:        Because of the academic work load the researcher was almost finding it difficult to combine class work with this research work as time was not much readily available to enable movement for research materials and also catch-up with class work. Therefore this work is limited by time for proper planning.

b.       FINANCE: Financial constrain played another hindering in completing the project work as visitation to sources of vital information were narrowed down to the major ones due to lack of find

c.       DEARTH OF MATERIAL:  The needed materials like secondary sources of data in the from of books magazines newspapers government publication gazettes are very scare and     sometimes not available for research work.

d.       RESPONDENTS ATTITUDE:       Most respondents are not willing to let the research questions since there was nothing being give immediately for an exchange. This attitude of secrecy by the respondent constrain this project work     

HYPOTHESIS FORMULATION

In an attempt to examine the problems of budgeting and budgetary control the following hypothesis can be considered.

 H0:   The work of budgeting department has not made significant impact on the performance of the organization.

Hi:     The work of budgeting department has made significant impact on the performance of the organization.

H0:    Budgeting department do not need more qualified personnel to perform its functions effectively.

Hi:     Budgeting department need more qualified personnel to perform its functions effectively.

H0:    Budgeting can not be used in improving the performance of government establishments.

Hi:     Budgeting can be used in improving the performance of government establishments.

H0:    There is no continuous comparison between actual and expected  budget in the organization. 

Hi:     There is  continuous comparison between actual and expected  budget in the organization. 

DEFINITION OF TERMS

-        Fertilizer     -        Artificial manure for replenishing soil nutrient soil

-        Agriculture -        A science and practice of tilling lead and rearing of animal for human consumption   

-       Consumption         -        The  process of utilizing the product realized from agriculture activities or use up

-        Exporting   -        It involved selling locally made products to other countries in order to earn foreign exchange  

-        Grounded   -        To be faulty

-        Exodus       -        Movement away of masses

-        Established -        Set up of order of sequences

-        Chemical     -        Substance mostly used in laboratory especially chemistry laboratory e.g. poisonous gas etc.

-        NEIC      -             A type of   a company fertilizer which contains three different elements such as  nitrogen potassium and phosphate 

-        Boosting     -        Increase the value

-        Imported     -        Goods or raw materials  brought from other countries into this country  

-        Complex     -        Difficult to understand

-        Facility       -        Equipment that facilitate production or training of personnel   

-        Tonne                   -        Metre for measurement

-        Budgeting   -        Estimate for probable future increase expenditure

-        Budgetary   -        Act of budget

-        Deviation    -        Turning away or against the formal process

-        Variation    -        Change in bodily structure or form

-        Restricted   -        Keep within limit.