Budgeting As A Tool For Planning And Control In Healthcare Institutions In Nigeria (Obafemi Awolowo University Teaching Hospital Complex Ile Ife As A Case Study)

Budgeting As A Tool For Planning And Control In Healthcare Institutions In Nigeria (Obafemi Awolowo University Teaching Hospital Complex Ile Ife As A Case Study)

Abstract

This study was carried out to examine budgeting as a tool for planning and control in healthcare institutions in Nigeria using Obafemi Awolowo university teaching hospital complex Ile Ife, Osun State. as a case study. The study was carried out to ascertain whether there is a significant relation between budgeting and managerial planning and control in healthcare institutions, ascertain the extent to which budgetary planning and control aid management in decision making in Obafemi Awolowo University teaching hospital, determine the effectiveness of budgeting on promoting effective financial management and control in Obafemi Awolowo University teaching hospital and find out whether the avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of managerial staff of Obafemi Awolowo university teaching hospital complex Ile Ife, Osun State. In determining the sample size, the researcher conveniently selected 41 respondents and 35 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables. While the hypotheses were tested using Pearson correlation statistical tool, SPSS v23. The result of the findings reveals that there is a significant relation between budgeting and managerial planning and control in healthcare institutions. Furthermore, the study also revealed that the avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital. Therefore, it is recommended that healthcare institutions should find and make use of more accurate bases of variance analyses adopting flexible budgeting system to make room for adjustment of budget when need be. To mention but a few.

Table of Content

• Title Page
• Certification
• Dedication
• Acknowledgement
• Table of Content
• List of Tables
• Abstract

Chapter One:

Introduction

• 1.1 Background of the Study
• 1.2 Statement of the Problem
• 1.3 Objective of the Study
• 1.4 Research Questions
• 1.5 Research Hypothesis
• 1.6 Significance of the Study
• 1.7 Scope of the Study
• 1.8 Limitation of the Study
• 1.9 Definition of Terms
• 1.10 Organisations of the Study

Chapter Two:

Review of Literature

• 2.1 Conceptual Framework
• 2.2 Theoretical Framework
• 2.3 Empirical Review

Chapter Three:

Research Methodology

• 3.1 Research Design
• 3.2 Population of the Study
• 3.3 Sample Size Determination
• 3.4 Sample Size Selection Technique and Procedure
• 3.5 Research Instrument and Administration
• 3.6 Method of Data Collection
• 3.7 Method of Data Analysis
• 3.8 Validity of the Study
• 3.9 Reliability of the Study
• 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

• 4.1 Data Presentation
• 4.2 Analysis of Data
• 4.3 Answering Research Questions
• 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

• 5.1 Summary
• 5.2 Conclusion
• 5.3 Recommendation
• References
• APPENDIX
• QUESTIONNAIRE

Chapter One

Introduction

1.1 Background of the Study

The world is getting more exposed. Recently, people have started seeing the need to start planning. Some draw plans on how to meet some of their goals in the future. Corproate bodies are not left out. The first process in management and handling problem is to draw a proper plan on how to tackle such a problem. Thus a budget is actually a management plan of action expressed quantitatively, mostly but not exclusively in financial terms (Kodjo, 2009).

The success of every organization depends largely on effective planning and control. Planning and control are pre- conditions for the attainment of organizational goals. The objectives of organization are realized through a careful plan of action and control. Both public and private organizations are established for the purpose of achieving specific objectives. Budgetary planning and control are managerial functions responsible for setting specific targets or expectation to be met. Budgeting is not only a management planning device but also a basic accounting model for managerial control. In manufacturing firm, planning and control are used to set profit target, revenue, prices and cost.

Hence, planning is the process of deciding ahead of time, what a firm seeks to achieve and how it seeks to achieve them. Planning is future-oriented. Control on the other hand, is the evaluation of performance and the putting in place of corrective measure where necessary. Control seeks to compare plans with actual goal realized. Control entails restrain, supervision, safeguarding, checking or even to correct deviations.

In the process of planning and control, budgeting entails a distinct pattern of decisions in the organization which are capable of determining its objectives, purposes or goals, and how these goals are achieved by establishing principal policies. However, the inability to recognize the problem concerned and fixing a boundary of investigation creates an obstacle for the successful implementation of planning and control. Some organization only look for narrow ranges of alternatives which they arrive at from their past experience and present situation. Other management levels even avoid long term planning and budgeting in favour of today’s problem thereby making the problem of tomorrow more severe (Steward, 1993).

The foregoing reflects on the need for organizations to set up a formal mechanism for scanning its environment for opportunities and gives early signs of future problem. This course of action will improve the system of budgeting in managerial planning and control resulting to an optimal performance.

1.2 Statement of the Problem

Generally, organizations are faced with limited resources and the allocation of scarce resources to meet competing needs. The problem bedeviling most healthcare institutions is how the available scarce resources can be allocated effectively and efficiently to achieve organizational objectives. The problem therefore, is most healthcare institutions do not appreciate the relevance of budgetary planning and control for its survival. Another glaring issue is the attitude of employees toward budget implementation. Budgeting may create a sense of confusion, frustration, suspicion and even hostilities within organization because employees regard the goals of the organization as alien to their individual goal.

Most often, healthcare institutions feel that budgeting is a mere paper work that can be toyed with, thus, most management executive do not adhere strictly to the budget or implement it religiously. While many private firms feel that there is no enabling law binding on them to prepare a budget. This often makes them to operate without a formal budget.

1.3 Objectives of the Study

The major objective of this study is to examine budgeting as a tool for planning and control in healthcare institutions in Nigeria using Obafemi Awolowo university teaching hospital complex Ile Ife as a case study. Within the stated broad objective, the following specific objective are identified by the researcher for the work.

1. Ascertain whether there is a significant relation between budgeting and managerial planning and control in healthcare institutions.
2. Ascertain the extent to which budgetary planning and control aid management in decision making in Obafemi Awolowo University teaching hospital.
3. Determine the effectiveness of budgeting on promoting effective financial management and control in Obafemi Awolowo University teaching hospital.
4. Find out whether the avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital.

1.4 Research Question

1. Is there a significant relation between budgeting and managerial planning and control in healthcare institutions?
2. What is the extent to which budgetary planning and control aid management in decision making in Obafemi Awolowo University teaching hospital?
3. What is the effectiveness of budgeting on promoting effective financial management and control in Obafemi Awolowo University teaching hospital?
4. Does the avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital?

1.5 Research Hypotheses

• Ho: There is no significant relation between budgeting and managerial planning and control in healthcare institutions.
• Ha: There is a significant relation between budgeting and managerial planning and control in healthcare institutions.

1.6 Significance of the Study

The research on the budgeting as a tool for planning and control in healthcare institutions in Nigeria using obafemi awolowo university teaching hospital complex ile ife as a case study is justified when one considers the scanty literature on the topic this does not mean that there is no literature on the topic in Nigeria but they are sketchy.

This study will benefit two groups on one hand is the public sector, healthcare sector which encompasses the citizens and private organization on the other hand. The outcomes of this study restructure and encourage the effectiveness of budgeting as a tool for management appraisal.

This study also intends to highlight the salient points in the healthcare sector budgeting principles and requirement, which are hitherto been ignored in the preparation of government budgeting. It is also believed that an adherence to the recommendations as man be seen later in this study based on the finding of this research will act as a guide for effective and efficient management or government budgets in the local government, this would have had on the nations troubled economy as is currently experienced. Moreover, public individuals and institutions like on its own part would be relived of this problem of inefficient and ineffective budget since it is true that they constitute the major source of the funds and it will enable the shareholders of commercial ventures than seeing their investment being well utilized, budgeted and accounted for by management, the same would also be applicable to the public sector the citizens and institutions in this regard whole investment in the form of taxes paid to the government are disturbed by officer at the helm of affairs.

Also the present study indeed is an attempt to find out the problems being encountered in the healthcare sector budgeting how efficiently and effectively the local government needs to emphasis.

Finally, mentioned should be made in its importance to future researcher who may extract the relevant sections in order to improve on them. These improvements are necessary because they tend to provide for the fulfillment of an academic process for the award of ordinary national diploma (OND).

1.7 Scope of the Study

The study seeks to examine budgeting as a tool for planning and control in healthcare institutions in Nigeria using Obafemi Awolowo university teaching hospital complex Ile Ife as a case study. Geographically the study will be delimited to Ile Ife in Osun State.

1.8 Limitations of the Study

In the process of carrying out this project or research the researcher encountered a lot of constraints while carrying out this research among which are:

Financial Constraints:

Due to the financial difficulty prevalent in the country and the resultant increase in the prices of commodities, transport fares etc and the researcher did not find it easy meeting all her financial obligations in the school as a result of which the work was affected

Time Constraints:

In the process of gathering information these serves as the major constraints in this research work were the researcher sacrificed some lecture period and other academic work that she is facing as a final year ordinary national diploma student. Hence time constraints posed a serious problem and serve limitation to the study.

Information Constraint:

The process of collecting updated and necessary information for this work was not easy due to the fact that the organization will not want or the scarcity of relevant materials and excessive bureaucratic “red tap” encountered in some of the departments where important information were sought. We must equally paint out at this juncture that the level of co-operation I got from the headquarters of Isiala Ngwa south local government as the case study were not impressive at all.

This attributed to the fact that the information I sought for were very sensitive, secret and private that are not made to the public.

1.9 Definition of Terms

Budget:

This is the process of making decisions about raising revenues and spending money for public purposes or a standard with which to measure the actual achievements of people departments, firms etc and the qualitative expression for a set time period of a proposed future plan of action by management.

Management:

This is a process by which the manager is involved in planning organizing, directing and controlling the organizations activities for the purpose of achieving human, material and monetary resources co-ordination, which are essential in the effective and efficient attainment of organizational objectives.

Control:

Means measuring performance and making sure that it conforms to set out standard, which helps in the correction of the course of operation.

Planning:

This is a process of determining in advance what needs to be done and how to get it done. It is selecting from among alternative future courses of action for the enterprise as a whole and for every department or section.

1.10 Organization of the Studies

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.

Chapter Five

Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on budgeting as a tool for planning and control in healthcare institutions in Nigeria using Obafemi Awolowo university teaching hospital complex Ile Ife as a case study. The chapter consists of summary of the study, conclusions, and recommendations.

5.2 Summary of the Study

In this study, our focus was to examine budgeting as a tool for planning and control in healthcare institutions in Nigeria using Obafemi Awolowo university teaching hospital complex Ile Ife, Osun State. as a case study. The study is was specifically carried out to ascertain whether there is a significant relation between budgeting and managerial planning and control in healthcare institutions, ascertain the extent to which budgetary planning and control aid management in decision making in Obafemi Awolowo University teaching hospital, determine the effectiveness of budgeting on promoting effective financial management and control in Obafemi Awolowo University teaching hospital and find out whether the avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 35 responses were validated from the enrolled participants where all respondent were managerial staff of Obafemi Awolowo university teaching hospital complex Ile Ife, Osun State.

5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

1. There is a significant relation between budgeting and managerial planning and control in healthcare institutions.
2. The extent to which budgetary planning and control aid management in decision making in Obafemi Awolowo University teaching hospital is high.
3. The effectiveness of budgeting on promoting effective financial management and control in Obafemi Awolowo University teaching hospital is very effective.
4. The avoidance of making budgeting hampers the actualization of set goals in Obafemi Awolowo University teaching hospital.

5.4 Recommendations

Based on the findings of the study, the following recommendations are proffered.

1. Healthcare institutions should find and make use of more accurate bases of variance analyses adopting flexible budgeting system to make room for adjustment of budget when need be.
2. Employees should be motivated towards achieving organizational objective in an optimum manner and should ask questions when they feel they don’t understand the direction top management is going.
3. The management should expose all departmental heads to the budgetary process. This will enable them to understand the importance of adhering to budget in order to implement the management decision which will aid the actualization of set goals. Budget education should thus be conducted yearly by the financial controller or an independent accounting/management consultancy firm.

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