An Evaluation of Budgeting and Cost Control of a Building Construction Industry

CHAPTER ONE

1.0    INTRODUCTION

1.01 (Background of the study)

According to Luke chapter 14 verses 28-30 which says for which of you intending to build a tower siteth not down first and counteth the cost whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it began to mock him. The above quotation from the Bible summarizes the problem of abandoned project after committing huge financial resources on them are getting out of hand in Nigeria. It is obvious that poor budgetary planning and cost control is responsible for failure of those project as most failures could be traced to poor funding in the project. According to Iwu Anthonia (2006) Sited that cost control should be exercised at the execution phase as the budget is the financial compass for comparing projected and actual cost of the project in budgeting knowledge of why cost may change from one period to the next is very essential. Cost control should not be achieved without good understanding of source of cost variance. It is expected that within the budgeted project cost, the project be designed to provide at least good value for client’s money in terms of profitability. Efficient cost control measures will ensure that the project team controls the circumstances surrounding the project procurement instead of the circumstances controlling them.