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REPORT

BUDGETING AND SCHOOL REVENUE PERFORMANCE LEVELS

A CASE STUDY OF KAWEMPE MBOGO MUSLIM SECONDARY

SCHOOL

BY

MUWONGE WILLIAM

07/U/5060/EXT

FACILITATED BY DR. KAMUKAMA ARINAITWE NIXON

THE REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL

FULFILLMENT OF THE REQUIREMENT OF AWARD OF BACHELOR

OF COMMERCE DEGREE

JUNE, 2011

MAKERERE UNIVERSITY

Declaration

I Muwonge William, hereby declare that this research report is my original work and has

never been at any one time submitted for the award of a degree in any university.

Signature…………………………

Muwonge William

Date:………………………………………..

i

Approval

This report is to certify that Muwonge William has carried out the study entitled

budgeting and school revenue performance levels, a case study of Kawempe Mbogo

Muslim Secondary School. This research has been submitted with my approval as the

supervisor and is worth for the award of Bachelor of Commerce degree of Makerere

University.

Signature……………………………….

Dr. Kamukama Nixon Arinaitwe

Supervisor

Date……………………………………………

ii

Dedication

I dedicate this work to all those who have sacrificed their time and resources towards my

education.

May God bless you.

iii

Acknowledgment

I thank the almighty God who has kept me alive and strong amidst all challenges. I

acknowledge and appreciate the people below for having ever helped me through my

studies either financially or academically particularly Dr. Kamukama Nixon Arinaitwe

my supervisor, Mr. Kalanzi Kajubi Paul my guardian, Mr. & Mrs. Talemwa Peace and

Mr. Bongyeyerwe Enock.

I also extend my appreciation to my dear friends like Nakalyango Justine and Andrew

Kalanzi. To my respondents, I thank you for honoring my request through responding to

my questionnaire whole heartedly.

The information you gave me enabled me to successfully complete this research work.

Thanks for your cooperation

May God bless you all.

iv

TABLE OF CONTENTS

Title page

Declaration ………………………………………………………….……………...iApproval.........................................................................................................................................iiDedication......................................................................................................................................iiiAcknowledgment..........................................................................................................................iv TABLES OF CONTENT.............................................................................................................vLIST OF TABLE.........................................................................................................................viiiAbstract.........................................................................................................................................ix

CHAPTER ONE............................................................................................................................11.0 INTRODUCTION 11.1 BACKGROUND TO THE PROBLEM 11.2 STATEMENT OF THE PROBLEM 31.3 PURPOSE OF THE STUDY 41.4 OBJECTIVE OF THE STUDY 41.5 RESEARCH QUESTION 41.6 SCOPE OF THE STUDY 41.6.1 Geographical scope...............................................................................................................41.6.2 Study scope...........................................................................................................................41.6.3 Time scope.............................................................................................................................51.7 SIGNIFICANCE OF THE STUDY 5

CHAPTER TWO...........................................................................................................................62.0 LITERATURE REVIEW..................................................................................................62.1 INTRODUCTION 62.2 BUDGET DEFINITION 62.2.1 TYPES OF BUDGETS.........................................................................................................72.2.2 Incremental Budget...............................................................................................................72.2.3 Zero Based Budgets..............................................................................................................72.2.4 Fixed Budgets.......................................................................................................................82.2.5 Flexible Budgets...................................................................................................................8

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2.2.6 Continuous Budget...............................................................................................................82.2.7 Cash /Revenue Budgets........................................................................................................92.3 STEPS IN BUDGET PROCESS 92.4 ESSENTIALS OF SUCCESSFUL BUDGETING 102.5 LIMITATION OF BUDGETING 122.6 BUDGETARY CONTROL 132.7 CONCEPT OF REVENUE PERFORMANCE LEVELS 142.7.1 Total Revenue (TR)............................................................................................................142.7.2 Average Revenue (AR)......................................................................................................142.7.3 Marginal Revenue (MR):...................................................................................................142.8 MEASURE OF PERFORMANCE 142.9 RELATIONSHIP BETWEEN BUDGETING AND REVENUE ` PERFORMANCE

16CONCLUSION 17

CHAPTER THREE.....................................................................................................................183.0 METHODOLOGY 183.1 INTRODUCTION 183.2 RESEARCH STRATEGY AND DESIGN 183.3 SURVEY POPULATION 183.3.1 Sampling size......................................................................................................................183.4 SOURCE OF DATA 193.5 DATA COLLECTION METHODS AND INSTRUMENTS 193.5.1 Questionnaires....................................................................................................................193.5.2 Interview.............................................................................................................................193.5.3 Observation.........................................................................................................................193.5.4 Documentary review...........................................................................................................203.6 RESEARCH PROCEDURE 203.7 DATA PROCESSING AND ANALYSIS 203.8 DATA PRESENTATION 20

CHAPTER FOUR.......................................................................................................................214.0 PRESENTATION ANALYSIS AND INTERPRETATION OF FINDINGS 214.1 INTRODUCTIONS 21

vi

4.2 GENERAL FINDINGS OR INFORMATION. 214.2.1 Findings on response rate per department..........................................................................214.4 OTHER FACTORS AFFECTING REVENUE PERFORMANCE LEVEL 314.5 FINDINGS ON THE POSSIBLE STRATEGIES FOR IMPROVED SCHOOL REVENUE LEVELS 324.6 RELATIONSHIP BETWEEN BUDGETING AND REVENUE PERFORMANCE LEVEL………………. 35

CHAPTER FIVE.........................................................................................................................375.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 375.1 INTRODUCTION 375.2 SUMMARY OF FINDINGS 375.2.1 Examination of whether there is a clear budgeting process and budgeting control system.

…………………………………………………………………………………….375.2.2 To establish other factors affecting revenue collection other than budgeting and budgetary control………………....................................................................................................................375.3 TO SUGGEST POSSIBLE STRATEGIES FOR IMPROVED SCHOOL REVENUE LEVELS…………….385.4 RELATIONSHIPS BETWEEN BUDGETING, BUDGET CONTROL AND SCHOOL REVENUE PERFORMANCE LEVELS 395.4 CONCLUSIONS 395.5 RECOMMENDATIONS 405.6 AREAS OF FURTHER RESEARCH 415.6.1 Budgeting and communication systems..............................................................................415.6..2 Training and performance....................................................................................................415.6.3 Budgeting and motivation....................................................................................................415.6.4 Employee motivation on performance of business organization.........................................415.6.5 Budgeting and cash management........................................................................................41

REFERENCE...............................................................................................................................42

APPENDICES.................................................................................................................................iAnticipated problems iLETTER OF CONSENT iiRESEARCH QUESTIONNAIRE iii

vii

LIST OF TABLES

Table 4.2.1 Shows findings on response rate per department. 21 Table 4.2.2 Shows response rate based on the position held 22 Table 4.2.3 Shows gender distribution structure of respondents 23 Table 4.2.4 Showing age distribution structure of respondents 23 Table 4.2.5 Shows marital status of the respondents 24 Table 4.2.6 Shows respondents levels of education 24 Table4.3.1 Shows findings on budgeting and budgetary control on whether there objectives to be achieved and who formulates them 25 Table 4.3.2 Shows findings on whether there is coordination of objectives and activities of different departments during the budgeting process 26 Table 4.3.3 Shows findings on whether there is full participation of employees in the budget process ………………………………………………………………………………….. 27 Table 4.3.4 Shows finds on whether there is always flexibility to accommodate the changes that may be caused by the changed circumstances. 27 Table 4.3.5 Shows findings on whether budget education was carried out at all levels 28 Table 4.3.6 Shows findings on whether there is always comparison between the budgeted and actual results to check if there are differences. ……………………………………………29Table 4.3.7 Shows findings on whether actual revenue collected usually fall under the budgeted revenue ………………………………………………………………………………….. 29 Table 4.3.8 shows findings on whether there was a reward scheme for revenue collector 30 Table 4.3.9 Shows findings on whether monies collected are banked intact or not 30 Table 4.4 Shows other factors affecting revenue performance level in at Kawempe Mbogo Muslim Secondary School 31 Table 4.6 Shows whether there is a relationship between budgeting and revenue performance level at school ………………………………………………………………………………….. 35 Table 4.7 showing data analysis by SPSS 36

ix

Abstract

The study sought to establish the relationship between budgeting system and revenue

performance levels at Kawempe Mbogo Muslim Secondary School. This was hindering

the school from gaining maximum advantage from its budgetary system and the

surrounding schools. The researcher developed interest in investigating relationship

between budgeting and school revenue performance levels at Kawempe Mbogo Muslim

Secondary School. In this study, research questions were raised as to whether there was a

clear budgeting process and budgetary control at Kawempe Mbogo Muslim Secondary

School, establishing other factors other than budgeting that affect revenue performance

levels, suggesting possible strategies to improve budgetary performance and finally

establishing whether there was a relationship between the variables under the study.

The study was a cross sectional survey design using self administered questionnaires. The

study population composed of 30 respondents including 3 administrators like 1 Director,

1 Head teacher, and 1 Bursar, 1 Cashier, 3 non-teaching staff, 2 teaching staff, 4

academicians and 17 students.

The study was limited to that population because they are the ones representing there

colleagues in the budget process analysis who had the data that was required by the

researcher to attain the purpose of the study. Primary data was collected using self

administered questionnaires as the main instrument designed according to the five points

linkert scale to explore the variables.

Data was process with the aid of Microsoft word; excel computer programs, analyzed

using frequencies and percentages.

SPSS was used to establish the relationship between the variables and data was presented

in tabular form.

x

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND TO THE PROBLEM

The researcher in this context defines a budget as a plan for an entire organization and

budgeting being the process of forecasting revenue against the expenses of an

organization.

The over all budget might be referred to as the master budget. It is expressed in financial

terms, partly because money is the common language for business activities and partly

because the major objective of any organization is a financial objective for instance

profits in the case of commercial profit making organization and value for money in case

of not for profit organization (CIMA study text; advanced management accounting, BP

House, 2008).

The adoption of a budget authorizes the plan contained within it so that management by

exception can be practiced. In this way managers are to identify the cases of deviation

and initiate appropriate control action to remedy the situation.

A budget provides means of expressing goals to be achieved in short run in formal terms.

It establishes harmony between the short run goals and the long run objectives of the

firm, the targets of expected profits are laid down when the budget is prepared therefore

uncoordinated budgets are not common goal and have adverse effects to performance

evaluation. Budgets should therefore clarify the assumption underlying future goals

(Pandey, 1996).

Revenue collection on the other hand is one of the most important activities in an

organization for long sustainable success of the business.

Revenue is the measure of how good or bad an organization is performing which is the

organization’s ability to attain its goals by using resources in an efficient and effective

manner.

1

Therefore, a budget is set out to ensure that organizational goals and objectives are

attained as budgeted for and in the period as intended therefore a budget sets out the

following functions:-

Ensuring the achievements of the organization’s objectives, helps in classification of

authority and responsibility, to compel planning and guide the planning process,

communicate ideas and plans /expectations to all stakeholders, coordinate activities and

efforts to achieve goals, provide a basis for control and performance, to provide means of

motivating managers and cadre employees and to implement management by objective

and management by exception.

Essentials of good budgeting therefore include:-

Support and involvement of top management, clear and realistic goals should be set,

assessment of authority and responsibility, building up by or creation of responsibility

centers, full participation of managers and their subordinate, effective communication,

continuous budget education, timeliness and flexibility (Kamukama, 2006).

According to ACCA study text: BPP learning media (2008). Performance measurement is

the setting of targets that are consistent with the organization’s goals and comparing

actual results with this target.

Performance measurement is a vital part of control and aims to establish how well

something or somebody is doing in relation to a planned activity.

The mission statement encapsulates the vision of top management, what they are trying to

achieve and how they wish to achieve it. It is an important part of the process of

controlling the whole organization. A critical success factor is a performance requirement

that is fundamental to competitive, product leadership, personal development, employee

attitudes, public responsibility and balance between short range and long range goals.

2

At Kawempe Mbogo Muslim Secondary School Students Admission is on the increase

but revenue collection do not match with the budgeted that is there is a short fall of the

actual as compared to the budgeted per academic year and its against this back ground

that the researcher is prompted to under take this study to find out what hinders budgeting

process instituted to realize the revenue anticipated.

1.2 STATEMENT OF THE PROBLEM

There is a difference in the actual revenue performance levels as compared to the

budgeted despite of the budgeting process instituted at Kawempe Mbogo Muslim

Secondary School. This has prevented the school from gaining maximum competitive

advantage over the surrounding schools and also over its budgetary control.

This continued difference as experienced from the previous years is indicated in the table

below.

Year Estimated revenue Actual revenue Difference

2007/08 67,500,000 50,500,000 17,000,000

2008/09 60,500,000 43,000,000 17,500,000

2009/10 67,000,000 52,000,000 15,000,000

2010/11 70,000,000 54,500,000 15,500,000

Source Kawempe Mbogo Muslim Secondary School.

Accounts report.

From the above table, it is assumed that if nothing is done this difference will continue to

widen.

It is from such a background that the researcher is prompted to investigate and find out

what hinders the budgeting process and budgetary control instituted to realize the revenue

anticipated.

3

1.3 PURPOSE OF THE STUDY

The general purpose of the study was to establish the impact of budgeting and budgetary

control on the school’s revenue levels over a given period.

1.4 OBJECTIVE OF THE STUDY

i. To examine whether there is a clear budgeting process and budgetary control system

at Kawempe Mbogo Muslim Secondary School.

ii. To establish whether there are other factors that affect revenue collection other than

budgeting and budgetary control.

iii. To suggest possible strategies for improved revenue collection at Kawempe Mbogo

Muslim Secondary School.

1.5 RESEARCH QUESTION

i) What budgeting process and budgetary control is used at Kawempe Mbogo Muslim

Secondary School?

ii) What are other factors that affect revenue collection in Kawempe Mbogo Muslim

Secondary School other than budgeting and budgetary control?

iii) What are the possible strategies for improved school revenue levels?

1.6 SCOPE OF THE STUDY

1.6.1 Geographical scope

The study was carried out in Kawempe Mbogo Muslim Secondary School.

1.6.2 Study scope

The study was concerned about the evaluation of budgeting and budgetary control in

relation to school revenue performance levels.

4

1.6.3 Time scope

The study focused on the revenue yield by the school based on that budgeted for the

period of 4 years from 2007/2008, 2008/09. 2009/10 and 2010/11.

1.7 SIGNIFICANCE OF THE STUDY

i. The study findings can be used to establish the importance of budgeting and

budgetary control and what impact they have over the school revenue levels for a

given period of time.

ii. Since this study was successfully carried out, it can be used by the school to improve

its strategic and management decisions.

iii. The research can help future researchers to have an insight into the practical

application of budgeting and budgetary control to enhance the theoretical traits of the

future study.

5

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 INTRODUCTION

This section will review the available literature by various scholars and academicians

about budgeting and school Revenue Performance Levels.

2.2 BUDGET DEFINITION

Pandey (1996) defines a budget as a short term financial plan. It is an action to guide

managers in achieving the objectives of the firm. A budget is a comprehensive and

coordinated plan, expressed in financial terms, for the operations and resources of an

enterprise for some specific period in the future.

According to ACCA study text, BPP learning media (2008). A budget is an

organization’s plan for a forth coming period expressed in money terms.

A budget’s two fold role is to compel planning and also establish a system of control.

According to N.A. Saleemi: Cost Accounting Simplified (2005). A budget is a plan of

action expressed in quantitative terms. It may further be defined in the following words:-

“A financial and or quantitative statement prepared and approved prior to a defined

period of time. It may include income, expenditure and employment of capital”.

Lucey (1996) defined a budget as a quantitative expression of the goals and objectives on

organization wishes to achieve and the costs of attaining those goals. It involves setting

goals and objectives considering alternatives and ensuring that the organizational efforts

and activities are directed towards achieving the stated objectives.

A budget is a guarantee expression of a plan of action prepared in advance of the period

of which it relates budgets may be prepared for the whole organization or for

6

departments, for functions such as sales and production or for financial and resource

items such as cash /revenue.

Capital expenditure, man power and purchases. The process of preparing and agreeing

budgets is a means of translating the over all objectives of the organization into detailed,

feasible plans of action (Lucey, 1996).

2.2.1 TYPES OF BUDGETS

2.2.2 Incremental Budget

To actualize the budget objective a base is determined from which the process will begin

by taking the correct level of activity and current budgeted allowances for existing

activity as the starting point for preparing annual budgets (Lucey, 1992). This involves

adding a certain percentage to last year’s budget to allow for growth and inflation. It

encourages slack and wasteful spending to creep into budgets (ACCA Study text: BPP

learning media, 2008).

2.2.3 Zero Based Budgets

These are budgets where each cost of items and its level has to be justified in relation to

the ways. It helps to meet the objectives and how expenditure benefits the organization

(Din, 1982).

According to ACCA Study text BPP learning media (2008). The approach of zero based

budgeting treats the preparation of the budget for each period as an independent planning

exercise: the initial budget is Zero and every item of expenditure has to be justified in its

entirety to be included.

Therefore, under this approach there are 3 steps to include:

(i) Defining the decision package which could either be mutually exclusive package

or incremental packages.

(ii) Evaluating and ranking packages on the basis of their benefit to the organization.

7

(iii) Allocating resources according to the funds available and ranking of

packages.

2.2.4 Fixed Budgets

According to Lucey (1996) fixed budgets are those for a single level of some measure of

activity, where sales and costs estimated for the coming year are compared with actual

results so that the budget is not adjusted to actual volume attained.

According to ACCA Study text BPP learning media (2008). Fixed budgets are the

starting point for the on going budgeting process and provide a plan or target.

These are prepared on the basis of an estimated volume of production and an estimated

volume of sales. No variants of the budget are made to cover the event that actual and

budgeted activity levels differ and they are not adjusted to reflect actual activity levels.

They are generally used for planning and define broad objectives of the organization.

2.2.5 Flexible Budgets

These are budgets which changes in accordance with the level of activity actually

attained and this can be used to show the costs and profits associated with different levels

of output to help management choose the optimal output (Lucey, 1996).

According to ACCA Study text BPP learning media (2008). Flexible budgets are budgets

which by recognizing different cost behavior patterns change as activity change,

therefore, at the planning stage flexible budgets can be drawn up to show the effect of the

actual volumes of output and sales differing from budgeted volume.

At the end of the period actual results can be compared to a flexed budget (what results

should have been at actual output and sales volumes) as a control procedure.

8

2.2.6 Continuous Budget

These are budgets that are based on comparison between actual and budgeted results.

Where there is a wide margin between actual and budgeted result, the then remaining

period’s budget will be adjusted by management so as to achieve realistic budgets.

2.2.7 Cash /Revenue Budgets

According to ACCA Study text BPP learning media (2008). Cash /Revenue budget is a

detailed budget of cash inflows and out flows incorporating both Revenue and capital

items.

It is useful in that it shows the cash position as a result of all plans made during the

budgeting process and so gives management the opportunity to take appropriate control

action which include:-

Short-term surplus: Pay suppliers early to obtain discount or make short term

investments.

Short term deficit: Increased payables reduce receivable steps budgeting process arrange

for an overdraft.

2.3 STEPS IN BUDGET PROCESS

According to ACCA Study text BPP learning media (2008).

Budgeting process is a step by step process to include the following steps:-

i) Communicating the details of the budget policy and budget guidelines.

ii) Determining the factor that restricts output.

iii) Preparation of sales /revenue budget.

iv) Initial preparation of other budgets.

v) Negotiation of budgets with superiors.

vi) Coordination of budgets.

vii)Final acceptance of the budgets.

9

viii) Coordination and final acceptance.

ix) Production of a master budget.

x) Budget review.

2.4 ESSENTIALS OF SUCCESSFUL BUDGETING

Budgets guide managers to achieve objectives of the firm, they help management to think

a head and plan in a comprehensive and coherent way, determine well in advance what

should be done what individuals or units are to assume responsibility and be held

accountable, they provide an orderly way to proceed in attaining organization goals

(Pandey, 1996).

According to Kamukama (2006). It’s important that for any budgeting exercise to provide

tangible results. There are some common practices to be observed. Failure to observe and

appreciate these essentials will render the budgeting exercise useless.

The essential pre-requisites for successful budgeting include the following:-

Support and involvement of top management. The budget should get a blessing from top

management. Management should believe in efficiency of budget as a tool of effective

management and not as a primarily an accounting device. The budget should therefore,

be regarded by management as the most important management tools but not merely as

an accounting device.

Clear and realistic goals

Objectives should be clearly and un ambiguously established. Budgeting can not succeed

if the goals to be set are not clear. In absence of a goal clarity employees will take an

improper direction and hence the efforts of management will be wasted.

Assignment of authority and responsibility.

10

A successful budgeting program presupposes a clear allocation of authority, duties and

responsibilities in an organization.

A sound organizational structure is essential for the success of the budgetary system.

The budgetary system should be established in terms of the assigned authorities and

responsibilities and performance of each manager should be evaluated in terms of the

assigned authorities and responsibilities.

Full participation

Full participation of managers and their subordinate is crucial for success of budgeting

system. If employees have effectively participated in developing the budget goals and

targets they will make special efforts to see that the budgeting process succeeds. This

implies that budgets should be imposed by the top management rather than, they should

emanate from the organization itself.

Effective communication

A sound budgeting system requires effective communication of enterprise objectives and

budget goals. This brings about the harmony of understanding between managers and

their subordinates.

Continuous budget education

The people who participate in making and implementation of the budget should under

stand the technicalities of budgeting. They should know how to prepare budgets re-adjust

them when the circumstances change.

Therefore the participants and stakeholders should continuously be subjected to budget

education.

Timeliness

The time period covered by the budget should be related to the necessity for and the

responsibility of effective management action.

11

Reasonable attainable target

The targets laid down in the budget should be reasonable enough to be attained by the

implementer.

Flexibility

It is important that budgeting should be flexible rather than static. The budgeting system

should therefore be flexible enough to take advantage of all opportunities that arise from

time to time.

Inflexibility impairs the initiative and freedom of managers and subordinates in making

decisions. It is also important to note that budgets should continuously be revised to

accommodate economic conditions.

2.5 LIMITATION OF BUDGETING

According to Byekwanso (2006) Budgeting and budgetary control system suffer from

certain limitations and those using the system should be fully aware of them.

The limitations therefore include:-

The budget plans are based on estimates. Forecasting can not be an exact science.

Absolute accuracy therefore is not possible in forecasting and budgeting.

Budgets are developed around existing organization structures which may be

inappropriate for current conditions.

Badly handled budgetary systems with undue pressure and lack of regard to behavior

factors may cause antagonism and may lower morale.

12

Budgeting is an expensive technique. The installation and operation of budgetary control

system is a costly affair as it requires the employment of specialized staff and involves

other expenses so that small business may find it difficult to adopt.

According to ACCA Study text BPP learning media (2008). At the planning stage.

- Managers may fail to coordinate plans with those of other budget centers.

- They may build stock into expenditure estimate when putting plans into action.

- There could be minimum co-operation and communication between managers.

- Managers might try to achieve targets but not beat them.

When using control information

- Resentment could occur, managers seeing the information as part of a system of

trying to find fault with their work.

- Sceptism of the value of information if it is inaccurate, too late or note understood

could arise.

2.6 BUDGETARY CONTROL

Budgetary control is a process of ascertaining several budgeted figures for the future of a

business enterprise and making comparison of these budgeted figures with the actual

results for find out discrepancies if any. Comparison of budgeted and actual results

allows the management to take corrective actions at a proper time.

It is a continuous process that helps in planning, coordination and controlling of a

business decision. A budget is a means of budgetary control that assists the organization

in setting up the goals and efforts are made for their achievements (Frey, 2005).

According to Drury (1992) no system of planning can be successful without having an

effective and efficient system of control. The process of budgetary control includes

preparation of various budgets. Continuous comparison of actual performance with

budgeted performance and revision of the budgets in the light of changed circumstances.

13

In attempt to do this, care must be taken on the choice of the budget to be used. It is only

a flexible budget which can support the control process but not a fixed budget

(Kamukama, 2006).

According to the Chartered Institute of Management Accountants London, budgetary

control is the establishment of budgets relating to the responsibilities of executives

continuous comparison of the actual with budgeted results either to secure by individual

action the objective of that policy or to provide a basis for revision.

2.7 CONCEPT OF REVENUE PERFORMANCE LEVELS

According to Tayebwa (1998) Revenue of the firm can be looked at in 3 ways.

2.7.1 Total Revenue (TR)

This is the total amount received by the firm as a result of selling its total output

produced per period of time.

Therefore, TR=PxQ, where: Q is the quantity sold and P is the Price per Unit.

2.7.2 Average Revenue (AR).

This refers to revenue per unit output. It is the same as average price. That is

AR=TR/Q=P where Q is the quantity and P is the price.

2.7.3 Marginal Revenue (MR):

This is the additional revenue resulting from selling an extra unit of output. That is

MR=∆TR/∆Q, Where ∆Q is the change in output sold.

Therefore, revenue collection is one of the most important activities in an organization

for long sustainable success of the business. It is the measure of how good or bad an

organization is performing which is the organization’s ability to attain its goals by using

the resources available in an efficient and effective manner.

14

2.8 MEASURE OF PERFORMANCE

In business performance refers to the ability of the firm to meet both its short-term and

long term goals efficiently and effectively or how good or bad the enterprise is doing.

Performance of a business is determined by a wide range of both internal and external

factors such as business organization, the aim of owners, mangers and market structure.

Measurement of business performance is usually in terms of financial or management

performance using ratios like profitability, liquidity efficiency and capital ratios (Frank

wood and Songster, 2002).

Profitability has been the most widely used to measure of financial performance “profit is

the excess of income over expenditure which can be expressed by ratios like growth

profit margin, net profit margins and return on equity (Slower, 1996).

A company should earn profits to survive and grow over a long period of time. Profits are

essential, but it would be wrong to assume that every action initiated by management of

an organization should be aimed at profit maximization, irrespective of social

consequences.

It is unfortunate that the word profit is looked upon as a term of abuse since some firms

always want customers and society exploited (Pandey, 1995).

According to Pandey (1998), another measure of performance is market power. He adds

that the market power is indicated by the level of sales, economies of scale and reduction

in transaction.

Performance in business enterprises can be measured by a customer commitments based

such enterprises have customers who have royalty to the enterprise (Druker, 1995).

15

Kakuru (2001) argues that poor performance arises when the enterprise can not meet its

financial obligations that are an indicator of poor performance.

Therefore, performance of business enterprises is measured based on the basic business

objective that include profitability, sales growth, market power and business survival

indicated by resources. These objectives can be achieved through proper planning,

budgeting and adopting appropriate budgetary control system.

2.9 RELATIONSHIP BETWEEN BUDGETING AND REVENUE `

PERFORMANCE

If management is to have a fully effective cost reduction with a target of a better revenue

performance level, constant review must be applied to costs. Budgets are tools that

management uses for review and control purposes. When they are well prepared and

based realistically on past performance, they;

- Reveal weakness in the programme.

- Make it easier to fix responsibility.

- Make possible comparisons and show trends in performance.

- Help maintain balance among the divisions of the organization.

Two aspects of budgeting are the establishment of standards and setting up mechanisms

to measure and control performance. Budgets are used to allocate funds and supplies as

targets to motivate employees and as a means of control of both spending and

performance targets levels.

Therefore, Budgets help to allocate resources coordinate operations and provide means

for performance measurement (Blocher, 2002).

According to Waheb (1998), Budget control helps share over all plans, set standards and

coordinate into unified whole. Performance is the measure of how good or bad on

organization is performing.

16

Performance of an organization can be assessed in terms of financial performance,

market share or employee performance.

According to Gabutto, (1990) the over all position of the firm can be gauged by

comparing ratios between various connected items, the commonly used ratios can be

grouped as measures of profitability, liquidity and solvency.

Bach (1983) argues that in evaluating operating performance of a firm the analysts

invariably use rates of return analysis. Budget system used by an organization. If not

effective can retard the performance of the organization.

Budgetary system needs to be supported by management and should involve detailed

scrutiny of actual results against the anticipated plan to ensure control and a good control

ensures good performance.

CONCLUSION

Management employs budgets as tools for planning control, review and performance

appraisal. The objectives of budgetary planning and control system are to ensure the

achievements of objectives, compel planning, communication of ideas and plans,

coordinate activities, provide a frame work for responsibility accounting to establish a

system of control and motivate employees to improve their performance.

17

CHAPTER THREE

3.0 METHODOLOGY

3.1 INTRODUCTION

This section comprised of the research design(s) and strategy, survey population,

sampling design (sampling techniques), sample size, sampling procedures, data sources,

data collection methods and tools, data processing and analysis used.

3.2 RESEARCH STRATEGY AND DESIGN

For reliable information the researcher used a cross sectional survey design since data

was collected at one point in time and predictive research design since it needed

forecasting or making deduction about revenue budgeted for a given period. Both

qualitative and quantitative methods were used and the key objective was to collect

information on budgeting and school revenue performance levels as an instrument to

yield more revenue over expenditure in given periods.

3.3 SURVEY POPULATION

The study was conducted in Kawempe Division specifically in Kawempe Mbogo Muslim

Secondary School and was composed of a total of 30 respondents including 3

administrators like 1 Director, 1 Head teacher, and 1 Bursar, 1 Cashier, 3 non-teaching

staff, 2 teaching staff, 4 academicians and 17 students.

18

3.3.1 Sampling size

The sampling size included 30 respondents representing the whole population in

accounting section, administrative body, teaching staff, support staff and the student’s

body.

The researcher used convenience sampling technique since he had to choose respondents

who are available and willing to participate.

3.4 SOURCE OF DATA

Data was got from primary and secondary Sources. This enabled the researcher to collect

relevant, reliable and comprehensive information.

3.5 DATA COLLECTION METHODS AND INSTRUMENTS

In order to obtain the desired information from the field the researcher used the following

instruments.

3.5.1 Questionnaires

Simple structured questionnaires were used to collect primary data.

Both open and closed ended questions were used to enable the researcher solicit all the

information required from the respondents. It was intended to give the respondents

enough time to analyze the questions before responding to them.

These questionnaires were issued to the targeted population and responses properly

recorded.

3.5.2 Interview

Structured interviews were conducted with some selected respondents of the sample who

were asked relevant questions face to face about the study.

This method was intended to provide information about certain issues from senior

administrative officers who were too busy to fill the questionnaires.

19

3.5.3 Observation

Here the researcher physically observed and noted what exactly existed on the ground.

Information about school revenue collection and problems prevailing were all obtained

by the researcher through this method.

3.5.4 Documentary review

To obtain the necessary secondary data pertaining to the study, written and documented

information to include textbooks, accounts reports, business journals and internet were all

reviewed and analyzed to supplement the primary data.

3.6 RESEARCH PROCEDURE

The researcher used cross sectional research design since data was to be collected at one

point in time and also use convince sampling since he needed to talk to the students,

support staffs, teaching staffs and administrators available. He made necessary

appointments with these key informants from the school.

3.7 DATA PROCESSING AND ANALYSIS

The researcher used computer software for instance Microsoft word for typing and

editing the data and the SPSS package for analysis.

Data was therefore analyzed according to different responses.

During each analysis a list of key beliefs, opinions, ideas, statements and attitudes

expressed for each topic of interview was made.

3.8 DATA PRESENTATION

Data was presented in form of tables indicating column for attitude, frequency and

percentages and then SPSS programme was employed for analysis aimed at giving the

correlation and co-efficiency.

20

CHAPTER FOUR

4.0 PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.1 INTRODUCTIONS

This chapter presents empirical findings in reference to the research questions in chapter

one. These findings were obtained from the primary and secondary sources.

They were presented and analyzed using frequency tables, percentages and finally SPSS

model was used to determine the relationship between the variables under study.

4.2 GENERAL FINDINGS OR INFORMATION.

Thirty questionnaires were issued out to respondents

4.2.1 Findings on response rate per department

Table 4.2.1 Shows findings on response rate per department.

Source: Primary data

According to the table above students body obtained 70%, non teaching staff 6.7%

teaching staff and administration 13.3% accounts 6.7% and directors department 3.3%.

The findings revealed that the highest response comes from student’s body with 70% and

the smallest response come from \director’s department with 3.3%.

1 3.32 6.7

4 13.3

2 6.721 70.030 100.0

DirectorAccounts departmentTeaching & StaffdepartmentNon - teaching staffStudents bodyTotal

ValidFrequency Percent

21

Table 4.2.2 Shows response rate based on the position held

Respondents Received Non response Total

Frequency % Frequency % Frequency %

Academician

s

4 13.3 - - 4 13.3

Administrato

r

3 10 - - 3 10

Non teaching

staff

3 10 - - 3 10

Teaching

staff and

Administrato

r

2 6.7 - - 2 6.7

Students

body

17 56.7 - - 17 56.7

Accountants 1 3.3 - - 1 3.3

Total 30 100 30 100


From the above table it was noted that one accountant and the director was considered as

administrators therefore included in the teaching and administration department yet four

academicians were included in the students body department. The researcher fetched 30

% response from all categories of respondent with academicians 13%, administrators

10% non teaching staff 10%, teachers 6.7% student body 56.7% accountants 3.3%. The

biggest percentages come from students’ body with 56.7% while the smallest come from

accountant with 3.3%.

There was no non response of the total questionnaires. This frequencies and percentage

were based on the composition of the schools population

22

Table 4.2.3 Shows gender distribution structure of respondents


According to the results above 63.3% of the respondents were male and 36.7% were

female thus male respondents double the female respondents which reveals gender

imbalance in the budget analysis at Kawempe Mbogo Muslim Secondary School.

Table 4.2.4 showing age distribution structure of respondents

Age group Frequency (F) Percentage (%)

20-29 26 86.7

30-39 - -

40-49 4 13.7

50-59 - -

60 and above - -

Total 30 100


From the above table, findings indicate that respondents in the age group 20-29 were

86.7% and 40-49 were 13.7% where as the rest was nil.

The majority of respondents were in the age group of 20-29 with 86.7% and the least

respondents group was the age group of 40-49% with 13.3%. The findings therefore

implied that the majority of 86.7% of the budgetary analysis were the youth in the group

of 20-29.

19 63.311 36.730 100.0

MaleFemaleTotal


23

Table 4.2.5 shows marital status of the respondents

Status Frequency (F) Percentage (%)

Married 4 13.3

Single 25 83.3

Widowed 1 3.3

Total 30 100


According to the results above 13.3% of the respondents were married, 83.3% were

single and 3.3% were widowed. The biggest percentage therefore was the single in the

budget analysis at the school which captured mainly the youth.

Table 4.2.6 shows respondents levels of education


Finings from the above table revealed that 70% of the budgetary analysis response had

attained certificates level in education, 6.7% had attained diploma level in education and

20.0% had attained degree level in education. The majority of the respondents had

attained the certificate level in education and the minority respondents with the diploma

level in education.

21 70.02 6.76 20.0

29 96.71 3.3

30 100.0

CertificateDiplomaDegreeTotal

Valid

SystemMissingTotal

Frequency Percent

24

Table 4.2.7 shows the length of service of the respondent in the school


The results from the table above indicate that 43.3 % of the respondents had been in

service at the school for less than 1 year, 40.0% had been in service between 1-5 years,

6.7% had been in service between 5-10 years and 10% had been in service at the school

from over .

Table4.3.1 shows findings on budgeting and budgetary control on whether there

objectives to be achieved and who formulates them.

Response Frequency(F) Percentage (%)

Yes 24 80.0

No 6 20.0

Total 30 100

Who formulates Frequency Percentage

Director 10 25

Head of department 9 22.5

Management 14 35

Team of management 7 17.5

Department and

individual employees

- -

Total 40 100


13 43.312 40.02 6.73 10.0

30 100.0

Less than one year1-5 years5-10 yearss

Above 10 years

Total


25

The finds from the above table revealed that there was budgeting and budgetary control

and that the objectives are normally formulated by management with the highest

percentage of 35% followed by directors with 25%, head of department with 22.5% and

team of management with 17.5%.

Table 4.3.2 Shows findings on whether there is coordination of objectives and

activities of different departments during the budgeting process


According to the above table 66.7% of the respondents agreed that there is coordination

of objective and activities of different departments during the budgeting process, 16.7%

disagreed while 16.7% were not sure yet 1was missing. This implied that there were

always coordination of the objectives and activities of different departments during the

budgeting process.

5 16.715 50.05 16.71 3.33 10.0

29 96.71 3.3

30 100.0

Strongly agreeAgreeNot sureDisagreeStrongly disagreeTotal

Valid

SystemMissingTotal

Frequency Percent

26

Table 4.3.3 Shows findings on whether there is full participation of employees in the

budget process


Finding from the above table revealed that 43.3% of the respondents agreed that there

were full participation of employees in the budget process, 36.7% disagreed, while 20%

were not sure.

This implied that the majority agreed that employees are involved but not all since not all

respondents were involved. This explains why the targets are not always realized as

planned /expected.

Table 4.3.4 Shows finds on whether there is always flexibility to accommodate the

changes that may be caused by the changed circumstances.


5 16.78 26.76 20.08 26.73 10.0

30 100.0



7 23.315 50.06 20.01 3.3

29 96.71 3.3

30 100.0

Strongly agreeAgreeNot sureStrongly disagreeTotal

Valid

SystemMissingTotal

Frequency Percent

27

From the above table findings show that 73.3% agreed that there is always flexibility to

accommodate the changes which may be brought about by the changed circumstances,

3.3% disagreed, while 20.0% were not sure, yet 1 was missing. From the above analysis

it’s depicted that there was flexibility to accommodate the changing circumstances

though not enough to guarantee efficiency of the process because of those respondents of

3.3% who disagree and this explains the gaps normally experienced as regards targets

verses actual revenue collection.

Table 4.3.5 Shows findings on whether budget education was carried out at all levels

Budget education is always carried out all levels

6 20.013 43.35 16.74 13.32 6.7

30 100.0



Source: Primary Data

Findings from the above table indicate that 63.3% of the respondents agreed that budget

education was carried out at all levels, 20% disagreed, while 20% were not sure. This

depicted that much as 60% agreed that there was budget education at all levels it’s not

enough to guarantee effectiveness and efficiency because of the 20% which disagreed

and this could be the reason why targets are not always realized as planned.

28

Table 4.3.6 Shows findings on whether there is always comparison between the

budgeted and actual results to check if there are differences.


Finding from the above table reveals that 76.7% agreed that there were always

comparison between the budgeted and actual results to check if there were differences,

13.3% disagreed, while 10% were not sure. From the analysis it means 13.3% of the

respondents who disagree might be the reason of why targets are not always realized as

expected.

Table 4.3.7 Shows findings on whether actual revenue collected usually fall under

the budgeted revenue


5 16.718 60.03 10.01 3.33 10.0

30 100.0



15 50.014 46.729 96.71 3.3

30 100.0

YesNoTotal

Valid

SystemMissingTotal

Frequency Percent

29

Table 4.3.8 shows findings on whether there was a reward scheme for revenue

collector


Table 4.3.9 Shows findings on whether monies collected are banked intact or not


Finding from tables 4.3.7 -4.3.9 revealed that respondents knew that the problem of

actual revenue falling below the planned or budget revenue existed as indicated by 50.0%

yes response against 46.7% of no response in table 4.3.7.

It’s also noted that presence of the reward scheme as depicted in table 4.3.8 with 36.7 %

of no response against 63.3% of the yes response could be one of the reasons why

revenue performance is improving.

In another development the existence of 13.3 % no response as depicted in the table 4.3.9

could also explain the misuse or misappropriation of the monies collected. Since it

showed that monies were not banked which could be the reason why actual revenue

collected falls under the budgeted revenue.

19 63.311 36.730 100.0

YesNoTotal


12 40.04 13.3

12 40.028 93.32 6.7

30 100.0

YesNoNot sureTotal

Valid

SystemMissingTotal

Frequency Percent

30

4.4 OTHER FACTORS AFFECTING REVENUE PERFORMANCE LEVEL

Table 4.4 Shows other factors affecting revenue performance level in at Kawempe Mbogo Muslim Secondary School

Factors Positive response Not sure response Negative response

Missing system Total

F % F % F % F % F %The quality of staff considering the skills they posses

21 70 4 13.3 - - 5 16.7 30 100

The structure of the organization fore instance the independence of managers

13 43.3 5 16.7 7 23.3 5 16.7 30 100

Credit management policies as it affects liquidity

21 70 4 13.3 - - 5 16.7 30 100

Economic stability for example level of inflation

19 63.3 2 6.7 4 13.3 5 16.7 30 100

Non availability of financial resource for example limited access to loans.

21 70 1 3.3 3 6.7 6 20 30 100

Government policies for example licensing of more privet schools

20 66.7 3 10 2 6.7 5 16.7 30 100

Level of competition amongst the surrounding schools which have different effects on costs and hence revenue performance level.

19 63.3 4 13.3 - - 7 23.3 30 100


The study revealed that there are several other factors that influence revenue performance level at the school other than

budgeting and budgetary control. These factors there fore should not be under looked.

31

4.5 FINDINGS ON THE POSSIBLE STRATEGIES FOR IMPROVED SCHOOL

REVENUE LEVELS

From the findings a number of respondents suggested that the school management should

device a number of incentives that will attract more students to the school and source of

these incentives include uplifting the quality of education by employing more skilled

teachers who will be able to generate a number of first grades that would attract a huge

number of students to the school thus leading to increased enrolment.

In another development findings showed that misappropriation of the school monies

would be a problem of why the actual revenue did not materialize as anticipated therefore

the suggestion was that of always carrying out both internal and external audits.

Findings also suggested that management of the school should open up school accounts

to which all school monies would be deposited before authorized expenditure.

Findings still suggested that the government should always aid the private schools to

supplement the inadequate school collection so as to enable the private school provide the

required qualify education.

Some findings suggested that the management should take the concern of advertising the

school so as to make it known to the public in order to offer an invitation to treat to the

public.

Other finding suggested that employing professional staff in the budgeting process could

also help the school to combat its problem of not realizing revenue as anticipated

.

In addition other findings suggested that the budgeting team should always consider the

views of all departments in the school as they are well versed with their respective

transactions.

32

Findings also suggested that increased education of all the participants in the budgeting

process would help the school in its struggle to improve its revenue performance levels.

Other findings suggested that putting and emphasizing the payment deadlines would also

help the school to improve its revenue performance levels.

Some findings suggested that there is need to increase the school fees and introduce other

charges like the development fee, library fees which would help the school to improve its

revenue performance levels.

Other suggestions were that students should always be served with the demand notes in

advance such that they can help on convincing their parents to pay earlier.

Finding also suggested that the school management should create good relationship with

the parents as this could help to create a rapport that would always motivate parents to

pay in time.

Other findings suggested that the management should think of other income generating

projects such as that of providing adult education services which would also improve the

school revenue performance level.

Finding still suggested that the budgeting team should always take into consideration of

the price fluctuation and therefore give allowance for low income generated.

Other findings suggested that management should always motivate well the revenue

collectors and also caution them not to allow any fees defaulters on the school compound.

Finding also revealed that incentives like giving bursaries on merit could help attract

more students which could help the school to improve its revenue performance levels.

33

Other findings suggested that diversification of income generating activities such as

opening up technical skills services could also help the school improve its revenue

performance levels.

34

4.6 RELATIONSHIP BETWEEN BUDGETING AND REVENUE PERFORMANCE

Table 4.6 Shows whether there is a relationship between budgeting and revenue

performance level at school


Findings from the above table indicated that 73.3% agreed that there was a relationship

between budgeting and budgetary control and the revenue performance levels at the

school, 3.3% disagreed while 20.7% were not sure yet 1 was missing.

8 26.714 46.76 20.01 3.3

29 96.71 3.3

30 100.0

Strongly agreeAgreeNot sureStrongly disagreeTotal

Valid

SystemMissingTotal

Frequency Percent

35

Table 4.7 showing data analysis by SPSS

Correlations

1.000 .595**. .001

29 27.595** 1.000.001 .

27 28

Pearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)N

Budgeting andBudgetary Control

School RevenuePerformance

Budgeting andBudgetary Control

School RevenuePerformance

Correlation is significant at the 0.01 level (2-tailed).**.

Source: Primary data Processed by SPSS

The information generated above was input in the SPSS program to find out the relation

ship that existed between the two variables by way of calculating correlation coefficience

(r), r of 0.6 was observed which revealed a very strong positive relationship between

budgeting, budget control and school revenue performance levels.

R2 = 0.36 (coefficient of determination) revealed that 36% of the variance in performance

which is explained by budgeting and budget control at the school or that 36% is the

contribution of budgeting and budgetary control towards revenue performance levels at

the school. It is therefore important to appreciate the role of budgeting and budgetary

control which is the reason why school revenue performance levels improved.

It should however be noted that the failure for the school to realize revenue collection as

always anticipated is explained by other factors that should not always be under looked.

36

CHAPTER FIVE

5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter covers the summary of findings, conclusions and recommendations based on

the finds.

5.2 SUMMARY OF FINDINGS

The researcher summarized the major findings basing on the research objectives after

interpreting and analyzing the responses.

5.2.1 Examination of whether there is a clear budgeting process and budgeting control

system.

The study revealed that there is a clear budgeting process and budgetary control system in

which objectives were set by management and standard were also set against which the

actual revenue performance levels were checked.

The implication of the findings was to take advantage of budgetary control system and

electrifying of the problems and weakness in the budgeting process and budgetary control

so as to improve revenue performance level.

5.2.2 To establish other factors affecting revenue collection other than budgeting and

budgetary control.

Finding revealed that there were many other factors affecting revenue collection other

than budgeting process and budgetary control which should not be under looked. These

factors may be the reason way the school is not always realizing revenue as anticipated.

These factors thus affected revenue performance level of the school and they included:-

- The quality of staff considering the skills they possess

37

- The structure of the organization for instance the independence of managers

- Credit management policies with its impact on inflation

- Inadequate financial resources for instance lack of access to credit facilities like loans

- Government policies for instance that of licensing so many private schools which other

wise created stiff competition

- Increased level of competition amongst the surrounding schools

The implication of the findings is to keep an open eye to all these factors and thus find

away of over coming them so as to improve the school revenue performance levels.

5.3 TO SUGGEST POSSIBLE STRATEGIES FOR IMPROVED SCHOOL

REVENUE LEVELS.

The study revealed many more possible strategies for improved school revenue

performance levels among which included:-

- Devising a number of incentives to attract students to join the school so as to increase on

enrolment

- Carry out both internal and external audit to eliminate the problem of misappropriation of

school monies

- The school to open up a school fees account for which monies would be banked intact

pending authorized expenditure

- Seeking for government funding to supplement the school revenue collection

- Advertising the school to make it known to the public as a matter of publicity

- Employing professional staff in the budget implementation team

- Considering all the departmental views

38

- Education of all participation in the budgeting process

- Putting emphasis on the payment deadline

- Proper motivation of the revenue collectors

- Issuing demand notes to students in advance

- To think of other income generating projects

- To always put in consideration price fluctuation when budgeting

- Diversification of income generating activities

The implication of the findings is to take advantage of the suggested strategies in order to

improve school revenue performance levels.

5.4 RELATIONSHIPS BETWEEN BUDGETING, BUDGET CONTROL AND

SCHOOL REVENUE PERFORMANCE LEVELS

The study revealed a very strong relationship between budgeting, budget control and

school revenue performance levels. The implication of the relationship confirmed that

budgeting, budget control and revenue performance moves in the same direction and that

if budgeting processes is clear, there will be less problems and that performance will be

satisfactory. The problems therefore of the school not realizing revenue as anticipated

were attributed to other factors as noted.

5.4 CONCLUSIONS

After an analysis of findings based on research objectives the researcher came up with a

conclusion that much as budgeting and budgetary control has significant effects on the

school revenue performance level other factors should not always be under looked for

they play a significant role too. Therefore the concept of performance can not fully be

explained by a single factor in isolation, but a combination of many other factors,

budgeting and budgetary control inclusive.

39

5.5 RECOMMENDATIONS

From the findings of the study, the researcher made recommendations in form of

strategies on improving revenue performance levels and other different aspect of the

study. The recommendations were based on both the opinions of the researcher and those

of respondents after analyzing all the available information concerning the area of the

study.

Both qualitative and quantitative aspects should be given due consideration as they all

have significant impact on the performance of the school in terms of revenue

performance levels.

There should be proper motivation of the revenue collectors intended to boost their effort

as regards budget implementation with a common goal of improving school revenue

performance levels.

The budget planning process should always take into account the uncertainties likely to

lead to deviation from the actual for example the inflationary tendencies.

Spending should always be within the limits and authorized by responsible officers for

control purposes.

40

5.6 AREAS OF FURTHER RESEARCH

Where as this study showed the impact of budgeting and budgetary control to school

revenue performance levels. There is need for further studies in areas which the study did

not capture yet they affect budgeting and performance. Further separate studies to be

conducted to establish the relationship between the variables in question are as below:

5.6.1 Budgeting and communication systems

5.6.2 Training and performance

5.6.3 Budgeting and motivation

5.6.4 Employee motivation on performance of business organization

5.6.5 Budgeting and cash management

41

REFERENCE

ACCA Study text, (2008); BPP Learning Media.

Byekwaso Godfrey, (2006): Intermediate Accounting, Revised Edition.

CIMA Study text; (2008) Advanced Management Accounting BPP House.

Drury. C. (1992): Management and Cost Accounting, 3rd Edition.

Frank wood and Songster A, (2002) Business Accounting, 9th Edition Volume 2. Prentice Hall.

Kakuru Julius, (2001) Finance Decision and the Business.

Kamukama, (2006): Cost and Management Accounting, 1st Edition.

Lucey, T. (1996): Costing 5th Edition

Lucey T, (1996): Management Accounting 4th Edition Educational Aldine Place London.

Pandey I.M. (1996): Essentials of Financial Management.

Salemi N.A. (2005): Cost Accounting Simplified.

School Accounts Report (2007, 2008, 2009, 2010, and 2011).

Tayebwa. B. Mugisha, (1998): Basic Economics, 3rd Edition.

42

APPENDICES

Problems encountered

This section indicates some of the problems that the researcher encountered in the course

of undertaking this research that almost hindered the success of the research.

The problems included:-

- Since the research pertains financial aspects of the school it is possible that the

respondents gave the incorrect information for fear that it may not be confidential

and that this may lead to over taxation of the school revenue.

- The researcher was limited by resources such as the inadequacy of the funds

required for the research.

- The researcher on most occasions found when his key informants were not at

school which increased the costs of transport for revisiting.

- The researcher also faced difficult in getting the information since the term was

closing and so the key respondent seemed to be so busy thus

kept on postponing response which too increased transport costs

- Access to reading material especially text books was a major hindrance

to the study

i

LETTER OF CONSENT

ii

MAKERERE UNIVERSITY

FACULTY OF ECONOMICS AND MANAGEMENT

DEPARTMENT OF DISTANCE EDUCATION

RESEARCH QUESTIONNAIRE

Dear Respondent;

I am a Bachelor of Commerce student at Makerere University conducting a research on

budgeting and School Revenue performance levels.

This study is basically focused on academic purposes as a major requirement for completion of

Bachelor of Commerce (Accounting) of Makerere University.

The findings will be of value to the management of the school in the struggle to improve on their

budgetary performance. Answers provided will be confidentially treated with utmost secrecy and

strictly for academic purposes.

I therefore, humbly request you to preserve me a few minutes of your precious time to answer

these questions below as honestly and truthfully as you can.

Your cooperation is highly appreciated.

-----------------------

Muwonge William

iii

SECTION A

BACKGROUND INFORMATION

Please tick your choice in the appropriate box.

1. Department

a) Directors b) Accounts department

c) Teaching and staff department d) Non Teaching staff

e) Student body

2. Position

a) Academician b) Administration c) Teacher

c) Supporting staff d) Student body

3. Gender

a) Male b) Female

4. Age group

a) 20-29 b) 30-39 c) 40-49

d) 50-59 e) 60 and above

5) Marital status

a) Single b) Married c) Widowed

6) Level of Education

a) Certificate b) Diploma c) Degree

d) Others (specify) …………………………………………………………………………

1

7) How long have you worked with this school?

a) Less than one year b) 1-5 years

c) 5-10 years d) Above 10 years

SECTION B

8) Do you carry out budgeting in this school?

a) Yes b) No

9) If yes, do you have any set objectives that you need to achieve in a specific period.

a) Yes b) No

10) How are these objectives formulated?

a) Formulated by Directors

b) Formulated by Management

c) Formulated by the head of Department

d) Formulated by team of management

e) Department and individual employee

11) Do you make a budget in reference to a plan?

a) Yes b) No

12) During the Budgeting process there is always coordination of objectives and activities of

different department.

Strongly agree Agree Not sure Disagree Strongly disagree

2

13) A part from estimating revenues and expenditure, does the school have other objectives

considered while budgeting?

a) Yes b) No

14) If yes, specify …………………………………………...……………………………..

………………………………………………………………………………………………

3

15) There is always full participation of employee in the budget process.


16) During budget preparation and implementation there is always flexibility to accommodate

the changes that may be caused by changing circumstances.


17) Budget education is always carried out at all level.


18) A comparison is always made between the budgeted and the actual results to check if there

are differences or variances.


b) Where there are differences /variances in the budgeted and actual result, is there any action

taken?

a) Yes b) No

19) If yes, specify ………………………………………………………………………..

………………………………………………………………………………………………

20) In your opinion what do you consider to be the budget constraints at Kawempe Muslim

Mbogo Muslim Secondary School?

………………………………………………………………………………………………………

………………………………………………………………………………………

21) Suggest possible solutions that can deter the constraints and improve the budgetary process

at Kawempe Mbogo Muslim Secondary School.

………………………………………………………………………………………………………

………………………………………………………………………………………

4

SECTION C

22) What are the sources of revenue at Kawempe Mbogo Muslim Secondary School?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………

23) From the above, what source has the highest potential and why?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………

24) Does actual revenue collected usually fall under the budgeted revenue?

a) Yes b) No

25) If yes please give a brief list of reasons why it is like that?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………

26) Suggest ways through which the school can improve revenue collection.

………………………………………………………………………………………………………

………………………………………………………………………………………

27) Is there a reward scheme for revenue collector?

a) Yes b) No

28) What is the best period of the term to collect revenue?

………………………………………………………………………………………………………

………………………………………………………………………………………

5

29) How do you make sure that the receipts /documents used in revenue collection are accounted

for properly?

………………………………………………………………………………………………………

………………………………………………………………………………………

30 Are monies that are collected, banked intact?

a) Yes b) No c) Not sure

31) If no, please specify?

………………………………………………………………………………………………………

………………………………………………………………………………………

32) How often do you make your revenue report and to whom?

………………………………………………………………………………………………………

………………………………………………………………………………………

33) How often do the internal checks effected?

………………………………………………………………………………………………………

………………………………………………………………………………………

34) Are there recommendations of any help to enhance revenue performance?

a) Yes b) No

35) Who are involved in the revenue budgeting process?

………………………………………………………………………………………………………

………………………………………………………………………………………

36) Any additional comments/views?

………………………………………………………………………………………………………

………………………………………………………………………………………

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SECTION D

RELATIONSHIP BETWEEN BUDGETING AND REVENUE PERFORMANCE

37) Performance is closely related to budgeting since the comparison of the budgeted with the

actual results helps in measuring performance.


38) How do you rate the performance of this school considering the years 2007, 2008, 2009,

2010 and 2011.

a) Improving b) Static c) Worsening

39) In your opinion, what could be the likely causes of such condition in 38 above?

………………………………………………………………………………………………………

………………………………………………………………………………………

40) To attain the desired revenue performance level in the school, budgeting should be made a

priority as it specifies, what is to be made a priority as for what to be achieved in a given period?


41) Through budgeting the school’s revenue sources are effectively and efficiently allocated to

achieve the desired revenue performance levels.


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42) Budgets put much emphasis on short-term targets like profits at the expense of other

variables like customer satisfaction and therefore, not a good measure of revenue performance.


43) In today’s changing business environment, school activities have to be handled the way they

appear not necessarily as budgeted and thus budgeting is irrelevant as a measure of performance.


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SECTION E

OTHER FACTORS AFFECTING PERFORMANCE

From 44-50 tick the most appropriate that is:-

SA = Strongly Agree A = Agree NS = Not sure

D = Disagree SD = strongly disagree

44 The quality of the staff considering the skills they

posses. Influence revenue performance levels.

SA A NS D SD

45 The structure of the school management for

example the independence of administrator

46 Credit management policies used by the school has

its effects on liquidity

47 Economic stability for example level of inflation

48 Availability of resources for example access to

extend finance

49 Government policies for example licensing more

private schools.

50 Levels Of competition amongst the surrounding

schools that have direct effect on cost and hence

revenue performance

51) In your opinion are there other factors hindering Revenue Performance level to increase in

Kawempe Mbogo Muslim Muslim Secondary school.

a) Yes b) No

52) If yes specify …………………………………………………………………………...

………………………………………………………………………………………………

53) Give possible recommendation.

………………………………………………………………………………………………………

………………………………………………………………………………………

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Thank you very much for your dedicated time and positive cooperation. I wish you the best in

your struggle to improve budgeting process at the school.

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makerere university€¦ · web viewperformance measurement is the setting of targets that are...

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