Budgeting And Budgetary Control, Techniques And Implementation In The Institution Of Higher Learning


The achievement of organizational objectives be it profit maximization increase share of the market, product leadership, greater development and its continued growth and desirability depends on efficient management of its available scare resources.

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The duel goals of efficiency in the utilization of scare resources, and effectiveness in the realization of corporate goal, cannot be attained in this period of good planning, co-ordination and effective control measures.

Planning as a managerial function concerns the identification of objectives and aims and choosing the appropriate policies and methodology necessary to achieve these objectives. On the other hand control is the representation of financial activities within the organisation such that performance and in accordance with expectation established in policies programme, plan and  targets . Put in other way control involves compelling or forcing performances to be in conformity with laid done plans for there to be control there must be targets and this target are always expressed quantitatively in financial or monetary terms, this is refers to as budget.

Also Read: Budget And Budgetary Control As A Tool For Effective Decision And Planning

Oshisami (1992:36) defines budget as the process of estimation authorisation and execution of revenue and expenditure as well as proposal.

I wok (1980:12) defines budget as “an instrument of authorisation to appropriate fund for specific set of expectation both Oshisami and I Wok emphasised on the use of budget for allocation of financial resources but the aspect of its application to generate and mobilize revenue was silent .

Ene(1996:158) defined a budget as a plan of action expressed in money worth which is prepared prior to a given period of time and covers all he different units of the organisation.

Therefore, budget is referred to as any financial plan serving as an estimate of any and a control over future operations any estimate of future costs or any systematic  plan for the utilization of manpower, material or other resources .

The institute of cost and management accountant (ICAN) defined budget as “ A financial statement prepared and approved prior to a defined period of time the policy to be pursued during that period for the purpose of attain a given objective , it may include income expenditure and employment of capital.

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Egbuonu (1998:197) defines budget as a formal expression of managerial plans in quantitative and financial term encompassing different phases of business operation and aim at helping management towards the attainment of organisational objectives. He went on to emphasis that a budget has a number of features which includes:

–        It is a plan of action

–       The plan is stated in quantitative or financial terms.

–       It is prepared prior to a defined period of time for the control of operation or performance within that period.

–        It  state performance expectation over a defined period of time, in the different phases of business operations –scale, production projects departments etc.

–        It is aimed at the attainment of organization objectives.

–        It integrate the  resources and costs of an organization to plan for anticipated level of performance.

–        An essential point raise in the above definition is that budget is not static hence it is subject to revision.

The chartered institute of management accountant defines budget as a plan quantified in monetary terms, prepare and approved prior to a  defined period of time usually showing planned income to be generated and  expenditure to be incurred during that period and the capital to be employed to attain a given objective”.

Osisioma (1990:230)( defines budget as a systematic and formalized approach for accomplishing the planning co-ordination and control responsibilities of management. It is a process of preparing in advance of the period which it relates, a summary statement of plans enguressed in quantitative terms which if properly utilized with sophistication and good judgement would enhance the attainment of an organisation is objectives.

An important variable in this definition is that no matter how articulate a budget(s), it is it’s implementation that matters. It is necessary to draw attention to this emphasis because most organisations, governments in both federal, state and institution levels usually have well articulate plans of policies which are translated into wonderful financial terms unfortunately these are not actually implemented. To the policy makers budget is a routine activities .

Once there is a functional budget , there must be an instrument of control to ensure that actual expenditure are in line with budget allocation this is referred to as budgetary control .

The Institute of Cost and Management Accountants (ICMA) defines budgetary control as “The establishment of budgets relating the responsibilities of a policy and the continuous compression of actual with budgeted results either to secure by individual action objective of that policy or to provide a base for its revision”.

Budgetary control according to Kodjo (2000:123) is defined as a “ a managerial activity which involves the building of budgets that relate to responsibility centres of the individual managers and periodic comprise of actual results with expectation ; it implies not just the establishment of the budget itself but also defining and relating of extent of responsibility of each executive to a desired policy as expressed in the budget . It is also necessary that there should be a periodic or continuous comparism of actual with budgeted results, the aim being to ensure through corrective action that plans are being met or to provide a basis for revising the budget

Ekezie (1990:229] noted that budget control involves the use of budgets for assigning responsibilities, planning and controlling performances and guiding  management  and other activities toward the achievement of organisational objectives. It involves the following processes :

  • Developing and making plans for the future course of the organisations.
  • Setting up estimated based on the plans .
  • Recording actual revenue and expenditure promptly and accurately under appropriate sub- head and allocation.
  • Comparing actual revenue and expenditure with budget allocated for it. Identifying deviation, investigating reason for variation and reporting to management.
  • Taking corrective action as and when due to bring organisational activities into line with budget allocations.

The above procedures remain the same whether or not such organisation is private or government , profit oriented or not .

From the foregoing, it could be seen that budgeting control is an important tools used by the management to control the operation and finances of any business enterprises, more especially in government financial management .since budgetary control is a system of continuous comparison of actual and standard performance, there is need for the set standard to be realistic to institutions conditions .The established standards should be good enough so that comparison could be meaningful .



As it is said that budgeting aids management in planning, co-ordinating and  controlling operation .But if management is going to realize the most in these areas it must create an environment receptive to a fully implemented budgetary programme.

It should be understood clearly that most attempts at budgeting will prove helpful to Nigerian Universities. But for maximum effectiveness the following condition should exist .

  • A sound educational institutions (Universities)
  • A well – concerned and through accounting system.
  • A research programme
  • The plan for administering the budget, and
  • The support of executives and workers (employees).

A university should be organised with sharply defined lines of authority can be determined easily .

It is obviously useless to establish controls without delegating the responsibility for them. If the hand of department understand who is responsible for each task they can perform more efficiently .Clear – cut responsibility serve also to keep moral high .

A sound institutional organisations allows management to manage by exception. This reduces details to routine and bring only important matter to the attention of operating heads when the bulk of activities has been reduced to routine. Higher executives devotes their time to important matters in need of their attention. Routine decision are handled by subordinates.

Since the successful operation of a budget depends on proper organisation , one of the first steps when installing a budget is to separate functions and to allocate their responsibility . This requires a sturdy to delineate all the various activities of the department to controlled . Then, management determines who be responsible for their control.


In surveying an organisation prior to installing a budgetary programme , management sometimes discovers that a function is divided among several distinct department making it difficult to provide budget cost controls. In such instance the function should be assigned to one department .In practice , after each departmental  heads submit his own budget and it has been co–ordinated with budget from the other departments , it is adopted as pert of the master budget and he is responsible for results.

Sometimes, the person will be responsible for more than one function .

In a primary school for example a principal may be in charge of a variety of activities , even minor employees may be performing tasks which involves more than one function . This poses no problems in setting up a budget if care is used in distinguishing between the various function in the budget estimates. The important thing is to be able to pinpoint responsibility for each function.

One of the advantages of surveying an institution prior installing a budgetary control system is the fact that the survey often uncover duplication of effort. It is not uncommon to find, that different departments are performing identical tasks and keeping similar records.



A second essential of budgetary planning and control is a complete accounting system. The budget estimates are based on the past records of the university modified by current condition that will affect future operations.

Accounting system is also necessary for caring out a budget. The account must reflect results along organisational lines so that individual performance can be compared directly with the estimates without this kind of information there would be no way to execute or exercise control on the basis of the budget.

For the budget to be an instrument of control the detained account must be classified in terms of responsibility accrued to departments. The  budget items must also be compiled according to the same classification. The it is possible to complete budgeted and actual figures.

The mutual relationship between budgetary control and the accounting system is reflected in the recent development of an accounts system known as responsibility for control are inter dependent. As the name responsibility accounting implies reports are prepared in terms of the persons responsible for the various activities within the organisations. The accounting statements are prepared for all levels of management. This sets of foundation for evaluation individual performances and indicates when action should be taken to improve performances.

In order for budgetary control to work accounting reports must be up- to- the minute so that there is no lag in connective action. According to records of the past are important in preparing the budget but accounting report must be timely for budgetary control. The use of electronic data process and EDP systems have helped considerably in furnishing management with current accounting data in proper form.



The development of standard cost has played an important role in the growth and development  of budgetary control. Standard cost are predetermined costs. They are usually established on the basis of avenging previous records. But  no matter how they are determined the purpose of standard costs is to predetermined the cost of operations for the coming period.

Standard costs stress what costs should be if certain performances are attained often they are set for Admission departments only”. In recent years however there has been a growing tendency to set standard costs admission and administration.

A standard cost system facilitates the preparation of budgets.



The use of budgets may be advantageous for the following reasons :-

  1. The preparation of budgets forces management personnel to engage in planning , management must become forward looking . In addition the objectives of the institution has to be defined and stated in financial terms.
  2. The use budgets lends itself to co-ordinating the activities of the various segments of the institution for example, the use of budgets may have the effect of co-ordinating academic effort with the administrative effort and also with the level of performance.
  3. The implementation of budget may provide an instrument for control. Deviation from a prescribed course of action may be determined and management may take steps to eliminate the course or the deviations.
  4. The techniques use in budgeting compel management to examine carefully the us of education and level of performance of students with the urge that more efficient use of resources may result in good and advantages output.

These four advantages to a budget are such that it may not be possible to attain all of them simultaneously. For example if excessive emphasis placed on the control aspect of the budgeting process employees may well resent the budget and the motivation advantages may be lost. Care must be taken by management to balance all aspects of the budgeting process in order to attain the maximum overall benefit from these four advantages.

Following from this therefore budgetary control in an organisation can be used in so many ways. It can be used as following  :-

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