TABLE OF CONTENTS
1.2 Historical Background
1.3 Statement of Problems
1.4 Purpose of Study
1.5 Significant of the study
1.6 Scope and Limitation of Study
1.7 Research Methodology
1.8 Research Questions
1.9 Research Hypothesis
1.10 Definition of terms
2.1 Types of
Budgetary control system
Management Control system
Budgeting Improvement Techniques
Associated with Budgeting
Concept of Budgeting
3.1 Research Methodology
3.3 Research Design
3.4 Sources of Data
3.5 Population and Samples Size
3.6 Samples and Sampling Technique
3.7 Research Instrument and Administration
3.6 Method of Data Analysis
Analysis and Interpretation of Data
Presentation of Data
Conclusions and Recommendations
1.1 BACKGROUND OF THE STUDY
Budgeting is fundamental to every
project management. It is imperative because it is a means to ensure that
desired organizations objectives are met. This is also accomplished by exercising
control over scares resources. Strategically, for an organization to run
effectively, there are four critical factors: organizations objectives of where
it intends to go, plans or how it intends to accomplish such objectives,
coordination or whether individual plans fit in the overall organization
objectives and control or whether operation relating to that period. With this,
budgeting and budgetary control are the devices that an organization makes use
of for all these purposes.
Budgeting is an integral part of planning
and coordinating, it is becoming increasingly important. While control is
comparing where you are supposed to be so that corrective action can be taken
when there is a deviation. When there is no plan, there is no control.
It is almost for an organization to exist
and survive without some sort of budget. To be without one is like a ship
without cores, cross along while being unaware of how far of the route it is or
which rock it is likely to hit, only luck can save it from a catastrophic end
Individuals in their private affairs
employ the use of budgets in their day to day activities. The practice of
budgeting and its control is now established on a world-wide basis and it's
still growing rapidly. Almost every company in Nigeria, indeed in the world at
large has its budgeting and budgetary department.
In general terms, a budget is a plan.
It also forms the standard with which to measure the actual achievement of
people, departments, firms and even governments.
A budget can be viewed as the plan of
the dominant individuals in an organization expressed in monetary terms and
subject to the constraint imposed by other participant and the environment
indicating how the available resources may be utilized to achieve whatever the
dominant individuals agree to be the organization's priorities.
It is one thing to plan a budget
using the best project figures; it is another thing to ensure that the process
of establishing the budget is both highly efficient and effective; in
accomplishing the set objectives. Thus, the simple term is basically what
budgetary control entails.
All of this is necessitated by the
economic concept of Scarcity. Though “scarcity” is a relative term, it is right
to note that resources are scarce, consequently, they serve as constraints to
management, in terms of materials, manpower, money and time. Resources must
however be utilized in order to achieve an organization's primary and secondary
objectives, (that of profit maximization and survival, growth, market share
etc.).However budgeting as a tool of planning and control expressed in
financial terms, based on predetermined objectives must represent what is likely
to happen after a careful balance has been stuck between the ambition of
management and the constraints facing the business.
The Access bank was incorporated as a
private limited liability company on February 8th, 1989. The bank
was converted to a public limited liability company on March 24th, 1998 and its shares were listed on the Nigeria Stock
Exchange on November 18th, 1998, the bank was issued a universal
banking licensed by the Central Bank of Nigeria on February 5th,
Effective November 18t,
2005, the Bank acquired two existing and functional banks of Nigeria, Capital
bank International PIc and Marina International Bank Limited through share
exchange considerable and continue trading as Access Bank PIc.
The bank established a foreign subsidiary
known as Access bank (Gambia) Limited on June 27th, 2006 and fide
subsidiary commenced operation on October 27th, 2006 on receipt of
Central Bank, of (Gambia) Limited have not been consolidated because of the
Director are of the opinion that it would be of no real value to the members;
in view of insignificant amount involved. The subsidiary's year end is December and it has only
traded for two months up to December 31st, 2006.
In October, 2006, the Bank carried
out a share reconstruction exercise to reduce the number of issued and paid
ordinary share of the bank by 50%. The restricted shares were allotted to
shareholders as fill in the ratio of 1 ordinary share for 2 ordinary share
held. The new shares were revalued such that there was no loss of Values to
shareholder as a result at the share reconstruction.
The principal activity of the Bank
continues to be the provision of money market activities, retail banking
granting of loans and advances, equipment leasing corporate finance and foreign
1.3 STATEMENT OF PROBLEMS
In an organization, standards of
performance need to be set to act as guidelines in order to reach successful
the budget plan. It is imperative that each manager feel that the budget for
his section is realistic, relevant and not imposed upon him.
However, in practice, this is not
always the case. Timing of expenditure, feedback, problems and human factors in
budgeting pose a threat which hinders the process of providing accurate and
suitable measures of performance and the preparation of performance reports that highlight
areas of concern which eventually lead to wastage.
Statement of problems is as follows:
There may be too much reliance on the technique as a substitute for good
The budgetary system, perhaps because of undue pressure or poor human
relations may cause antagonism and decrease motivation.
Budgets are develop round existing organization structure and department,
which may be inappropriate for 'current conditions, and may not reflect' the
underlying economic realities.
Lack of good communication system may be an underling factor affecting
1.4 PURPOSES OF STUDY
The aims and objectives of this study
Study and examine the effectiveness of budgeting and how it is carried out
at Access Bank PIc.
To examine the budgeting policy and budgetary techniques actually in place.
To highlight some of the problems
inherent in the preparation and implementation of budgetary control encountered
by Access Bank PIc.
4. To what extent is the objective of control measures
5. Who are the principal actors
involved in budgeting administration at Access
The following research question will
be answered during the course of this research project.
i.) What is the relationship between
Budget and Budgetary control in the Banking Industry?
ii.) How Technology does affects
budget performance and measurement?
iii.) How does human factors affect the preparation and implementation of
iv.) What are the problems
encountered on preparation and implementation of budgeting in Access Bank?
The following hypothesis will be
Ho: Technology affects budget performance and measurement.
does not affect budget performance and measurement.
Ho: Human Factors affect the preparation and
implementation of budgets.
Hi: Human factors do not affect the preparation
and implementation of budgets
OF THE STUDY
The worldwide use of budgets in one
form or the other end its inherent problems is the focal point of my interest
in this study.
A study of this nature is of immense
benefit not only to the Nigeria government and the economy but also to all
stakeholders in the financial system. It is of great importance to the banking industry
as it offers strategies for successful implementation of budgets and budgetary
The findings of this study will
improve the effectiveness of Access Bank particularly and the banking industry
in general and make it more important creative tool for management rather than merely
a means of expressing objectives.
This study will be benefit to me as a
student as it will serve as a reference tool on related subject area. The
government and, the economy will also be beneficiaries as any improvements to
the banking industry impacts greatly on the economy.
It is also to create a citation or
reference to the major function of managing, coordinating, deployment and
control over resources to realize the maximum objectives of the organization.