An Appraisal Of Budgeting As A Tool For Effective Control In Public Sector: A Case Study Of Power Sector (PHCN) Abuja

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An Appraisal Of Budgeting As A Tool For Effective Control In Public Sector: A Case Study Of Power Sector (PHCN) Abuja


Abstract


The entire work under “an Appraisal of Budgetary as a Tool of Effective Control,” highlighted general problems and objectives as well as significant of study with historical background of the then (PHCN) determining capacity, development and maintaining including the changes and examined planning. And the financial management way forward in purposes and objective of Budgeting, with it types under the energy firm reform and impact of privatization and commercialization improving reputable electricity, prudence in preparation of budget, responsible for money policies, payment of workers’ salaries, material stock, investments profitability, and safeguarding the establishment funds and assets, promote long range balance growth system, executive capacity with a regular power supply service without power failure. It also brings to light the present reforms and necessary data required to enrich the study documentary negotiated with the tables of acceptances from age, gender and rank of the respondents and finally budget and plan should be reviewed on a continuous basis, effectively and efficiently to facilitate the realization of goals.


Chapter One


1.0 Introduction

Given that:

Electric energy is crucial for rapid economic growth and transformation. Its production (generation, transformation and distribution) is for both a growth of all industries as well as an entirely new industry with scientific technological effect on the other sectoral activities.

The key to achieve operational excellence, therefore is in effectively flexible management of resources and this means optimizing and scheduling people, processes, vehicle equipments and materials so that utilization is maximized; while business goal are achieved through appraisals in sufficient timing plan, not been frequently source of difficulty on account of it lateness, quite aside from the impact of the cycle the portfolio of it requisite type of meaningful project which is likely to be small and restricted to it local agencies, the worse still following it. Rather than the medium and long term prospective and the cyclical that will be implemented in time to effect sectoral balance.

And appraisal of budgetary as a tool for effective control in a public sector determining the wealth of any nation every extent on human resource, environment resource and value of human effort as resources for any organizational productivity, efficiency, effectiveness in operation, this cannot be all emphasized. The capacity building developing and maintaining well trained skilled, experienced and quality human resources that easy out the various tasks of organization, these is issue of importance; and is a complex issue which extended beyond the sphere of economic policy, more set of issues which Nigerians are inclined to sweep under the carpet of this development is known to no political, religions, or ethnic boundaries. It seeks only sole infirmity with security and serious management its against this background that the researcher investigate the resources on the organizational development inter-sectorial balance.


1.1 Background Information

Electric power development in Nigeria seated towards the closing year of the last century when the first generation plant was installed in the city of Lagos in 1898 from this date upward and until 1950 the pattern of electricity development was set up at various towns, some of them by the federal government and jurisdiction of the public work department and some by the Native Authorities and one or two large municipals authorities. Electricity corporation of Nigeria 1950 in order to integrate power development and make effective the electricity corporation of Nigeria ordinance No. 15 of 1950 were passed which brought under control all electricity undertakings to public departments and as a statutory body responsible for generation, transformation and distribution with sales of electricity to all consumers and customers in Nigeria as (ECN).

Niger Dams Authority

The Niger Dams Authority was established by act of the parliament in 1962, the Authority was responsible for the construction and maintenance and other works on the rive Niger and elsewhere generating electricity by means of water power improving navigation and promoting fisheries and irrigations construction of the Kainji Dam which began in March 1964 was completed on schedule in the December 1968.

(NEPA) National Electric Power Authority

In September 1969 the federal military government decided to merge the electricity corporation of Nigeria and the Niger Dams Authorities into a single body. A year left a year later a Canadian firm of consultants “SHOWMEN LURRUTED” was appointed into technical details of the merger. The report was submitted on November, 1971 by Decree No. 24 of 27 June 1972 and effective 1st April 1972.

Took up in proper manner on 6th January 1973; The National Electric Power Authorities existed until development plan of the power system of 1982-1990 classified major electric sales grew rather rapidly at the Annual sale of 16.1% from just under one million megawatt hours (MWH) carrying 0.914. In the year ended March 1970 to 4.066 (MWH) in the year ended 1980. According to Central Bank of Nigeria annual report for the year ended December 31st 1981 sales for the calendar year 1981. The last year for which figures totaled some 5.677 (MWH) and this represent 20.7% increase over the figure for the calendar year ended 1980; that decree stipulates that the authorities are to develop and maintain an efficient coordinated and economic system of electricity supply for all parts of the federation.

Prior to privatization programmes that was introduced during the regime of former president chief Olusegun Obasanjo the firm was privatized and subsequently Power Holding Company of Nigeria sub-commercialized it generation setup into seven sectors while the distribution into ten sector and owns only transmission up to date as the review of power sector ministry in 2013. As the presidential commission on parastatals federal government press, Lagos pg. 16 to complete the decomposition of NEPA to PHCN in to commercial variable headed by (G.O Onosade) recommended that the PHCN should concentrate on distribution, maintenance and sales of sales of electricity should formed out to reputable electric companies prudent executive capacity, and enable regular supply of electricity, improve its service throughout the country and ensure regular supply of electricity without power failure.


1.2 Statement of the Problem

The challenge in most organizations has posed a threat on the realization of its development and the achievement of its set objectives. This is as a result of fundamental issue of inadequate and improper acquisition, utilization of and maintenance of human resource in the then (PHCN) Power Holding Company of Nigeria has seriously led the organization into mass, inadequacy of supply to meet the demand of a rapidly growing economy; frequent power failure and load shedding resulting in heavy economic losses, excessive reliance on large-scale hydropower, limited spare capacity and high transmission overloaded distribution facilities, and inadequate maintenance of the facilities as in the fourth plan documents and human factor is not properly managed, mismanagement is another serious problem facing our organization today and has reduced it to nothing as people are no longer in with their work not ready to own up to vital resources in the organization. And also delay in obtaining government approval in contract.


1.3 Significance of the Study

The significance of the study is to assess the role of resources management on organization and constantly develop means of managing resources includes the following aspect.

  1. It will assist managers to know the need for human resource training and development, ensure that the right numbers skilled/trained manpower are available for employment at the right time for all level in the organization.
  2. The study will contribute positively at state on how privatization and commercialization resources can be effectively utilized and hot it can bring about high productivity in the organization.
  3. Students aspiring to be a material executive in future see this study as an opportunity to fully investigate into field of human, material and financial resources management to see the challenges therein.
  4. It also hope that the study will assist future researchers of resources management and how it can lead to organizational development.

1.4 Limitation of the Study

The study is to assist the role of resource management on the organization development; the study will be restricted to the Power Holding Company of Nigeria known as Power Sector Reform and its public liability companies, man, material, money and machines constitute the resources of organization. This study will not cover all the resources of (PHCN) and as such it will be limited to human, material and financial resources.

Data were collected and used based on records gotten from the organization and it only covered records on past years as relevant information which were based on recent and current events most were brief due to problems of breakdown in machines and mismanagement fraud, other materials from textbooks and journals, periodicals, internet browsing will serve as the secondary sources of data for research study.


1.5 Definition of Terms

In order to avoid any form of ambiguity as regard to the terms used in this research work, the following are given optioned definition:

Human Resource Planning (HRP):

This is the process of getting the right number of qualified people into the right job at the right time.

Productivity:

Is the measure of how well resources are brought together in organization and utilization for accomplishing a set of result. Productivity is reaching the highest level of performance with least expenditure of resources.

Organization:

This is the process of dividing work into convenient tasks or duties or grouping such duties in formal posts delegation of authority to each part and approving qualified staff to be responsible that the work is carried out as planned.

Motivation:

Is the term used to describe those processes both instructive and rational by which people seek to satisfy the basic desires, perceived needs and personal goals which triggered human behaviour.

Forecasting:

Is a process of estimating the future number of people required and skills and competence they will need.

Material management:

This is defined as grouping under one head all or some of the activities involved in the organization and use of materials employed from the need stage up to the storage of financial goal.

Purchasing:

Purchasing is defined as the activity directed to securing by legal means the material supplier and the equipment required in the operation of an enterprises.

Sourcing:

This is referred to as investigation and evaluation of resources of supply and suppliers.

Negotiation:

Is a process of planning, receiving and the analyzing used by both buyers and sellers to arrive at an acceptable agreement through common understanding.

Expediting:

It is a process of ensuring that goods are promptly delivered to the right place and at the usual right time.

Purchasing requisition:

It is a form usually prepared when a department is store need material to be purchased.

Issue:

Is the withdrawal of goods and handover of some of user backed with authorities documents.

Quality control:

Is a process whereby goods and services are examined to ensure that they conform to predetermined standards.

Obsolescence:

These are materials for which there is no demand either because of the presence of better substitute or they are out of use fashion.

Stocking:

This is complete process of verifying the quality balance of entire stock hold in the store.

Mission:

Statement of an organization over siding purpose of vision for the organization usually expressed in general teams, but tends to suffice the organization culture.

Objective:

An objective is the end point of a management programme whereas stated in general or specific term.

Planning:

Can be defined as the act of setting and selecting goals or objectives in selection to the strategies policies and procedures for achieving the goal and objective.

Manpower planning:

Is concerned with developing a systematic procedure for achieving an organization objective through the acquisition, utilization, maintenance and development of the human resource required presently and in the future.


Chapter Five


Summary, Conclusion and Recommendations

5.0 Introduction

The researcher in this chapter gives the summary, conclusion and recommendation of the study.


5.1 Summary

The effect budgeting as a control tool in public sector cannot be under estimated. The reasons it is used to control future expenditure. this In chapter one, concerted efforts are made to introduce the subject matter, highlights some of the general problems and objectives as well as significance of the study and also the historical background of the study are statement of questionnaires and definition of terms as opposed to dictionary meaning, together with some limitation of the study.

Chapter two deals with the power sector reform and opinion of authors, professionals and renown scholars on the subject maters with consideration on other important discussion, intended to throw more light on the research study as, purpose and objectives of budgeting, types of budget, and the functions of budget committee in energy development reform, and benefit of budgeting. Chapter three deals with the research methodology used in the gathering or collection of necessary data required to enrich the study questionnaires and documentary.

Chapter four the collected data are presented and analyzed with comprehensive table of acceptances.

Finally chapter five comprises of entire summary of the research work, conclusion arrived at and recommendations proffered on the objectives and comprehensive appreciation of the research study.


5.2 Conclusion

The focus of this study is budgeting as a tool for planning and control. Budgeting has been described as a plan quantified in monetary terms, prepared and approved prior to a defined period of time.

The ministry oversees the performances of the staff in order to enhance smooth performance and subsequently the realization of the objectives. Hence the researcher suggests budgeting and planning to facilitate control of the future expenditure.

The writer undertook the research of the organization to find out whether the Ministry applies budgeting and planning procedures to its operations and in particular the control of its future expenditure. Moreover, if it had done that, how had it being done and to what extent as well as finding out the efficiency and effectiveness of the system on the Ministry. To this end the researcher set two basic assumptions or (hypothesis as a bases for the research study which conclude that;

The Ministry embarked on long term strategic planning and budgeting techniques to minimize its expenditure. There was effective budgeting and planning procedure in the state and in terms of control, the strategic plan of the Ministry proved beyond reasonable doubt that budgeting and planning are suitable for controlling future expenditure.

Based on the finding the researcher identifies that various problems and difficulties usually associated with budgeting and Budgetary control. Among these are:
However, the researcher is not claiming mastering of these problems.

Budgeting develops around the existing organizational structure and departments which may be in appropriate underlying economics realities. The every existence of well documented planning and budgeting may cause lack of flexibility in adapting to change. There is managerial problem in selecting the level of attainment to be included in budgeting and standards.

Variances are frequent due to changes in circumstance, poor forecasting, and general uncertainties. The budgetary system, perhaps because of undue pressure or poor human relations may caused antagonism and decrease motivation.


5.3 Recommendations

  1. The researcher is of the opinion that budgeting and planning of the Ministry should be maintained and pursued until fully realized.
  2. The Ministry should employ competent and intelligent staff with a lot of experience to facilitate the planning, organizing and implementation of the budgets and plans which will go a long way in controlling the future expenditure of the ministry.
  3. To support the above recommendations, on the division of labour within the private sector commercialized in the ministry should be encouraged as well as registration with professional bodies.
  4. To ensure that budgets are realistically established and coordinated satisfactorily, functional heads are to present their budget to the committee for approval
  5. Managers are to be motivated in order to strive to achieve organizational objectives and staff should be given incentives for good performance.
  6. The organization should try as much as possible that budget manual is circulated to all the individuals responsible for preparing budgets.

Furthermore, budgets and plans should be reviewed on a continuous basis to ensure that they are operated effectively and efficiently to facilitate the realization of the goal which is the control of future expenditure of the ministry.


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