External Factors Affecting Budget Utilization in Ethiopian Public Universities

Dejene Taffa

doi:10.7176/jesd/10-21-06

Abstract

Inefficient higher education budget utilization has been adversely affecting the implementation of government policies, programs and project implementation in Ethiopia. This study sought to investigate external factors that affect proper budget utilization in public universities of Ethiopia in 2017. A total of 178 respondents were randomly selected from Dilla, Wolaita Sodo, and Bule Hora Universities. Primary data were collected using closed and open questionnaires. To supplement the survey result secondary data were collected from a federal general auditor. The data were analyzed using various descriptive statistics. The findings indicated a significant improvement in budget allocation to public universities from time to time. However, imposition of the federal agencies to implement unplanned activities by Universities, delay in project implementation, low financial and technical capacity of the contractors in terms of financial and technical matter that cause project implementation delay’s particularly for construction projects had adversely affected the budget utilization of the study Universities. This study recommended that the potential of the contractor both technical and financial capacity and their past performance should be properly evaluated before coming to an agreement. The result also suggested that there should be a need timely and continuous follow up the progress of the project and take corrective action before the end of the fiscal budget year. Keywords: Budget Utilization, Public Universities, External Factors, Ethiopia DOI : 10.7176/JESD/10-21-06 Publication date: November 30 th 2019

Highlights

The budget refers to a plan relating to a definite future period of time expressed in monetary and/or quantitative terms
Trends in Budget Utilization According to secondary Data obtained from the report of the auditor general of Ethiopia, over utilized and underutilized budget by different government organization is significantly increasing from 2007- 2009 E.C and most public higher education institutions are repetitively listed as major government organizations for excess/under budget use and unlawful and/or improper utilization of the budget during the stated fiscal years
A questionnaire was distributed to resource persons in the organization whose activity is directly related to finance, project management and budget and planning departments

Summary

Introduction

The budget refers to a plan relating to a definite future period of time expressed in monetary and/or quantitative terms. Budget is the most widely used and highest rated management tool of cost reduction and control. It is a tool that helps managers in planning and control functions (Arora 2010). The relative strength of each function depends on the current view of the function of budgeting and budgeting tools and techniques, and depends on the strength of particular organizations and/or institutional arrangements to support these functions (World Bank, 1998). While using the system, the fact that the budget is based on estimates must be kept in view. This indicates that if there is no good estimate during the future budget judgment, overestimation or underestimation will happen which leads to overutilization or underutilization than the approved budget that's going on most public institutions (Arora 2010)

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