Impact of budgetary implementation on performance of financial institutions in Kenya

Abstract

Budgetary implementation entails putting of a proposed budget to work with regard to the time frame and the anticipated performance. By budgeting, managers coordinate their efforts so that objectives of the organization harmonize with the objectives of its parts. Control ensures that objectives as laid down in the budgets are achieved. A descriptive survey design will be adopted and a representative sample of the staff who are involved in the budget process at the Agricultural finance corporation headquarters used. A self-administered questionnaire used to collect data from the respondents. The study attempts to investigate how corporate performance is affected by a poor budget implementation process for the achievement of the objectives of the organization. This study used a regression model to analyze the existence of the various relationships existing between budget implementation and performance in an organization. This is a good analysis method that assisted to show the existence of such relationships among the various variables in the study. The statistical package for social sciences will be used to aid the analysis. The study is intended to come up with the reasons as to why and how the budget implementation process affects the performance of the organization. The study sought to find out what relationship exists between the performance and the implementation process. The study concluded that budget planning was effectively practices in the corporation as employees were sensitized on the budget process, the corporation start with planning for its programmes, that programmes and plans were the basis for getting financial resources, the management in the organization normally formulate the firm objectives from the set goals and that the corporation budgets emphasize outcomes . The study concluded that corporation often hold budget conferences to review performance, put clear tracking of programme results in the institution, make adjustments regarding budget performance, the budget performance was always communicated and that the perceived level of budget monitoring and control in the institution was adequate. The study finally recommend that financial corporation should ensure budget adequacy by allocation sufficient budget , ensured equity in distribution of resource in budgeting, increase level of budget monitoring and control in the institution being adequate and implementing regulation ensure standard fair distribution of the budget. From the findings, the study recommend institutions should ensure budget planning was effectively practices in the corporation by sensitization of employees on the budget process, planning for its programs, ensuring programs and plans were the basis for getting financial resources, the management in the organization normally formulate the firm objectives from the set goals and that the corporation budgets emphasize outcomes.