BUDGETING AND BUDGETARY CONTROL IN GOVERNMENT OWNED COMPANIES (A CASE STUDY OF POWER HOLDING COMPANIES OF NIGERIA (PHCN) PLC

ABSTRACT
In view of the importance of the system of budgeting and budgetary control as the basic for evaluating performance, it is worth considering the effectiveness of the principle of budgetary control more closely in relation to government owned companies in Nigeria with the power holding company of Nigeria (PHCN) plc, as a focus point, the chattered institute of management accounting defined budgetary control as “establishment of budgets relating to the responsibility of executive to the requirement of a policy and the continued comparison of actual result with budgeted results either to secure by individual action the objectives of that policy or to provide a basic for its revision”. The result of budgetary control includes combining of ideas, delegation of authority, management decision making and the directing of capital expenditure of the most profitable projects. In this study, the three (3) sub-companies of PHCN plc. As contained in appendix iii, were considered. The data presented were obtained from the questionnaire administered. The z test was used to analyze the data after presenting them in tabular form and expressed in simple percentages. The study revealed that there is a system of budgeting and budgetary control in government owned companies. Also it was discovered control system has adverse consequences on performance and accountability. It is hereby recommended that the private sector business culture should be implemented into these government owned companies managements in order to achieve and efficient performance.

INTRODUCTION
Management and control of public expenditure has been a consistent concern of government. The need to restraint in public expenditure is now part of the economic conventional wisdom of the day, Management control, in its broadest context is the means by which an organization carries out its objectives effectively and efficiently. Once the objective have been agreed plans should be drawn to enable the progress of the organization be directed towards the ends specified in the objectives. Planning according to WOOD and ALAN (2002) “is the process of co-ordinating the resources available to attain an objective, it takes a long-term financial view and is also concerned with strategic thinking”. 
These plans are part of the organization financial strategy to carryout the programme ANTHON AND YOUNG (1984) defined a programme as “some definable activity or group of activities that the organization carries on, either directly in order to accomplish the organization objectives or indirectly in support of other organization elements”. Each programme is operated by a group of people all working towards some organizational objective and headed by a supervisor or manger who is responsible for their actions. 

It must not be thought that plans can be expressed only in accounting terms. But some of the objectives such as the attainment of a desired profit or the attainment of a desired growth in assets can be expressed quantitatively; it is know as a budget. 
According to WOOD and ALAN (2002), a budget is defined as “ a plan quantified in monetary terms in advance of as defined time period and usually showing planned income and expenditure and the capital employed to achieve a given objective;. It takes a short-term financial view. And the process of converting plans into budgets is know as budgeting, PANDY (1981), defined budgeting as a comprehensive and co-ordinated plan expressed in a financial term for the operations of an organization resources for some specific period of time.

The budget cycle is a complete set of event occurring in the same sequence every year and culminating in the approved budget. The budgeting process may be quite formal in a large organization with committee set up to perform the task. On the other hand, in a very organization owned may jot down his budget on a piece of scrap paper or the back of a used envelop, some even mange without writing anything down at all, they have done the budgets in their heads and can easily remember them. The implementation of the budget involves the on-going recognition of new issues and the allocation and reallocation of resources.

The methodology of budgetary control is probably accountancy’s major contribution to management. The control stages management planning and control cycle begin with the budget and also included controlling and measuring, reporting, analyzing and feed back. The essence of budgetary control lies under two main objectives of planning and controlling expenditure. It is, of course, the responsibility of the plan of the organization and budgetary methodology.

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APA

Kings, S. (2018). BUDGETING AND BUDGETARY CONTROL IN GOVERNMENT OWNED COMPANIES (A CASE STUDY OF POWER HOLDING COMPANIES OF NIGERIA (PHCN) PLC. Afribary. Retrieved from https://afribary.com/works/budgeting-and-budgetary-control-in-government-owned-companies-a-case-study-of-power-holding-companies-of-nigeria-phcn-plc-7622

MLA 8th

Kings, Solomon "BUDGETING AND BUDGETARY CONTROL IN GOVERNMENT OWNED COMPANIES (A CASE STUDY OF POWER HOLDING COMPANIES OF NIGERIA (PHCN) PLC" Afribary. Afribary, 29 Jan. 2018, https://afribary.com/works/budgeting-and-budgetary-control-in-government-owned-companies-a-case-study-of-power-holding-companies-of-nigeria-phcn-plc-7622. Accessed 27 May. 2024.

MLA7

Kings, Solomon . "BUDGETING AND BUDGETARY CONTROL IN GOVERNMENT OWNED COMPANIES (A CASE STUDY OF POWER HOLDING COMPANIES OF NIGERIA (PHCN) PLC". Afribary, Afribary, 29 Jan. 2018. Web. 27 May. 2024. < https://afribary.com/works/budgeting-and-budgetary-control-in-government-owned-companies-a-case-study-of-power-holding-companies-of-nigeria-phcn-plc-7622 >.

Chicago

Kings, Solomon . "BUDGETING AND BUDGETARY CONTROL IN GOVERNMENT OWNED COMPANIES (A CASE STUDY OF POWER HOLDING COMPANIES OF NIGERIA (PHCN) PLC" Afribary (2018). Accessed May 27, 2024. https://afribary.com/works/budgeting-and-budgetary-control-in-government-owned-companies-a-case-study-of-power-holding-companies-of-nigeria-phcn-plc-7622

Document Details
Field: Accounting Type: Project 107 PAGES (11156 WORDS) (doc)