It has become a normal thing for us as citizens of a country like Nigeria to wait for, the president to release the yearly national budgets, but very little of us even know what the budget actually means.
A budget is an estimate or plan of income and expenditure that helps most companies, country and Organizations in taking care of projects mapped out annual. For this reason it is of importance that there should be a reliable system of budget analysis. A good budget analysis is a process of breaking the whole budget into separate units or parts with the sole aim of identifying and studying the structure of each part of the budgets, so that the budget would be error free, and in case of error provide possible solutions to them.
A look at a brief history of the how comes of budget. In January 1993 the African concord newspaper stated the budgets started in Britain when the then king asked for reports on the income and expenditure of the country in order to check fraudulent activities of their government, this was as a result of the countries growing population inability of those in charge to specify a given project at a given place and time, uncompleted project which were paid for and complaints laid by citizens of Britain were all the things that brought about the need for budgets.
In other-word a budget helps managers manage and it can be said that having a budget has more advantages then it has any disadvantages.
However the fact remains that not withstanding the careful planning and execution of an organization’s budgets in Nigeria, the targets are still hardly met by any one organization while most budget even end up not being implemented at all. This work therefore, attempts to take a look at the methods adopted for budgets analysis or would be likely adopted for budgets analysis in an. Organization like the Enugu state ministry of finance.
1.1 STATEMENT OF THE PROBLEM
It is easy to note that budget analysis entails large volume of work and a whole lot of calculation. This make the job very difficult a task to go by the method of information storage and retrieval processing of accumulated figures is not an easy task in places were there are no sophisticated method of budget analysis.
Inefficient and insufficient records will always result to a poor and inaccurate budget. The fact that humans cant tackle the ambiguous calculations and complex allocation involved in budget analysis easily without the help from computer this is also a delay factor for the releasing of an accurate budget statement. This work will look into reasons why many budget ends not to work and my case study will be the Enugu ministry of finance and I will also try to derive a good computer system that will take care of these problems.
1.2 PURPOSE OF STUDY
Budget analysis is very important with our everyday life as it is also very important for us as humans to have a daily budgets which guides our spending so also it is important at the end of the day to give an account of such spending which is in order ward an analysis of our expenditure. This is an important move for every organization. For an organization to survive it must plan ahead the amount it will receive and how it will allocate the money to different departments of such an organization and how such money should be spent. This is budgeting and the analysis is just a step to make sure it works. Hence this budget analysis should be of immense importance to government, institutions and even individuals.
For government organization like the given case study, this work could serve as an eye opener to them by carefully exposing that problems inherent in budgets analysis and recommending the solution this would help them to avoid wasteful spending through budgets deficits.
To private organization or companies this would also be of immense help use to them as they adjust themselves to the defect of economy by careful planning execution. To individuals and share holder in companies this work will enable them know why companies and governments have tended to spend more than they budgeted for, while it will also act as a bedrock for other kinds of work similar to this on embarked by other researchers
1.3 AIMS AND OBJECTIVES
The main objective of this study is to have an overview or maybe even an in so the company and government organization budget system in Nigeria using the Enugu state ministry of finance as our bridge to other organization while other sub objective include.
a. To consider the method adopted by the ministry of finance on budgeting.
b. To check and determine their approaches to budgets analysis from 1998-2004
c. To find out if all budget targets have been meet during the above stated period.
d. To determine the problems usually faced by the organization in managing their finances.
e. To make adequate finding and necessary recommendations after analyzing their budget by checking the system between the period of 1998 to 2004.
f. To design a new system that will take care of the above problems and lastly set up a sample budget for future use.