CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Expenditure control or cost control is part of management control process, in every organisation.

This process is very important to any organisation be it profit making organisation or non-profit making organisation. Thus, lack of this practice in any organisation will cause misapplication of cash in cash disbursement process and this will create a very big problem leading the organisation into deficit and at an extreme case, the organisation might wind up. Many researches have been conducted in the reason for winding up of companies and organisation in which lack of expenditure control process had found responsible.

Expenditure control has been defined as the process by which managers utilize effectively and efficiently, the scarce resource in the achievement of the organisational goals. At this juncture, let us look at expenditure and control from separate perspective.

Expenditure is the total amount spent on the process of trying to achieve a particular organisational goal. Control means to order, limit, instruct or rule something or someone’s actions. It is used by either government officials or organisation managers to make restrictions on wages increases, immigrate credit and so on (which are all expenditure).

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