Budget Variance Research Articles

EFFECTS OF BUDGET IMPLEMENTATION ON GOAL ACHIEVEMENT OF STATE OWNED TERTIARY INSTITUTIONS IN EBONYI STATE, NIGERIA

The evaluation of budget implementation on goal achievement in Ebonyi State of Nigeria prompted the specific objectives of the research work to include: budgetary control mechanism, late approval of budget, budget variance information and late release of approved budgeted funds. Survey research design was adopted and data were collected using close-ended questionnaire. The questionnaire was structured on a 5-point Likert scale statistical rating method. The total population of the study was 259 while the sample size was 157. Collected data were presented on frequency distribution tables, simple percentages and multiple regression analysis. The data were analyzed using Statistical Packages for Social Sciences, version 20, 2023. The study adopted Stakeholders Approach Theory by Edward (1984). The study unveiled that budgetary control mechanism and budget variance information had positive and significant effects while late approval of budget and late release of approved budgeted funds had negative and no significant effects on goal achievement of state owned tertiary institutions in Ebonyi State, Nigeria. The implications of the study were that budgetary control mechanism and budget variance information do not hinder budget implementation on goal achievement. Late approval of budget and late release of approved budgeted funds hinder budget goal achievement, encourage abandonment of projects and non-quality project perfection. Analysis of budget variance aids management of state institutions to adjust budget proposal in respect to deficit budget and, idle resources from surplus budget on any item(s) of budget are reinvested in achieving other goal congruence of the institutions. The study concluded that early approval of budget and timely release of approved budgeted funds facilitate budget implementation and aid in goal achievement of budget proposals of the institutions. The research therefore recommended that the management of the state institutions’ budget committee and other budget stakeholders should be familiar with the processes of budgeting and budget operation to facilitate planning and preparation of financial year budget void of errors and omissions for enablement of early approval of budget and timely release of approved budgeted funds among other measures capable of harnessing budgeting values in the State.

Financial Reporting, Tracking, and Analysis Practices Effect on Financial Performance of Commercial State Corporations in Kenya

In Kenya, legislative acts by parliament establish state corporations to promote social and economic progress. The state corporations advisory committee has identified eight distinct categories of these entities, which include financial, commercial, industrial, regulatory, public universities, training and research, service, regional development authorities, as well as tertiary education corporations. Out of the 33 state corporations in commercial and manufacturing category, 18 fall under manufacturing while 15 are commercial-oriented and therefore by their operational nature expected to make profits or operating surplus. The study focused on the fifteen (15) profit-making state corporations. Most commercial state corporations are in a state of perennial loss-making. Their financial performance trend between 2016-2020, shows that out of the 15 corporations in the commercial sector, only four (26.67%) are sustainable from their operations. This leaves over 73.33% of them struggling to survive and have to depend on government funding to address their liquidity challenges. This study sought to assess the impact of financial reporting and analysis on the financial performance of commercial state corporations in Kenya. The study assumed a descriptive study design. The study used a census procedure since all fifteen State Corporations under the commercial category were studied. Data was analysed using descriptive and inferential statistics. The inferential statistics results indicate that financial reporting and analysis have a positive and statistically significant effect on financial performance of commercial SOEs. The study found that improved financial performance was observed upon conducting periodical operational budget estimations, capital project estimations, periodical cash flow projections, and comparison of actual costs and budget variance analysis. The management and finance department to ensure that financial reporting processes are strengthened to enhance accuracy, openness, and compliance with governing requirements.

Evaluating Supply Chain Performance through Financial Metrics: A Study in a Manufacturing Industry

This empirical study is based on primary data emphasizing the importance of evaluating supply chain performance through financial metrics, each activity within the supply chain directly impacts both the top line and bottom line of a business. In today's challenging business environment, organizations must prioritize monitoring their financial performance to ensure enduring resilience. The economy of Bangladesh has encountered turbulence due to disruptions such as the aftermath of the COVID-19 pandemic and the ongoing global political unrest. These occurrences have significantly impacted the business landscape, resulting in uncertainties in both demand and supply, shifts in consumer purchasing patterns, and notable increases in the prices of essential commodities and raw materials, therefore, the overall cost of business has risen. This study investigates the consequences of various disruptions, both internal and external, on the economy, adversely affecting organizations. The ability of an organization to withstand such challenges depends on maintaining robust financial and operational performance. Given the persistent global upheaval, there is a compelling need for an innovative approach to enhance supply chain optimizations, overall operational efficiency, and meticulous budget control and variance analysis aligned with financial planning. This is crucial at a substantial level to ensure positive entries in the profit and loss account and maintain a healthy cash flow statement. This study is done based on twenty-four (24) manufacturing sectors of Bangladesh. To address these challenges, the study advocates an Integrated Supply Chain Performance Measurement (ISCPM) model. This model contributes to academia through a novel approach, demonstrating its effectiveness by employing ten attributes to evaluate supply chain performance, with a specific focus on the financial performance termed Financial Health (FH), an attribute to measure supply chain performance in an organization. The study further elaborates Financial Health attributes into five key Performance Measurement Index (PMI) which are Economic Performance, Cost, Budget Variance, Inventory, and Planning Variance —within the context of manufacturing operations, providing insights into various facets of their impact. The study significantly contributes to the industry for practitioners by bringing synergy into the framework and performance measurement attributes, ultimately adding value to the manufacturing industry.

Analisis Kinerja Realisasi Anggaran Pendapatan Belanja Daerah Pada Badan Keuangan Aset Daerah Pemerintah Kota Medan

This study describes and explains the budget realization for the last five years, starting from 2018 to 2022, by paying attention to the percentage change between the budget value and the realization of the regional income and expenditure budget each year. The purpose of this study is to evaluate the performance of regional revenue and expenditure budget realization in the regional asset finance agency of the Medan City government during the 2018-2022 period. This study also aims to compare the effectiveness of budget realization during that period. The research method used is descriptive qualitative using secondary data sources and documentation study data collection techniques. Data analysis involves revenue variance analysis, degree of decentralization ratio, local tax effectiveness ratio analysis, and expenditure budget variance analysis. The results show a problem, where the realization of the regional revenue and expenditure budget in 2019-2020 has increased, even though it should have decreased due to the impact of the COVID-19 pandemic. This problem is related to the loss of funds worth 1.6 million which has been handled by Law Enforcement Officials.

Analisis Anggaran Sebagai Kebijakan Salah Satu Alat Pengendalian Kinerja Pada Badan Pengelola Keuangan Dan Aset Daerah (BPKAD) Provinsi Sumatera Utara Kota Medan

This study aims to determine the budget as one of the performance control tools at the Regional Finance and Asset Management Agency (BPKAD) of North Sumatra Province, Medan City. The data collection techniques used were interviews and documentation. The types of data used are quantitative data and qualitative data. The source of data used in this study is secondary data, in the form of Regional Budget Realization Reports. The analysis method used is a comparative descriptive analysis method, namely by comparing the budget with realization in various sources of financing using variance analysis. The results showed that there were irregularities in excess funds of 68.41%, 69.96%, 99.20%, and 32.52% in the budget of BPKAD Medan City for 2022. The conclusion from the analysis and realization of expenditures is that in the 2022 fiscal year, the BPKAD Medan City experienced deviations. Where deviations occur due to the budget that is not absorbed in the budget and expenditure realization. Performance control at the Medan City BPKAD for 2022 is considered good because the budget is greater than the realization in terms of budget variance and expenditure realization variance.

Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification

Budgets in organisational units are considered to be traditional management support tools. On the other hand, budgetary control is the essence of control measures, allowing for the increase in the efficiency of an enterprise through appropriate allocation of resources. The methodology used in the analysis of budget variances (obtained as a result of applying budgetary control) undoubtedly influences the management efficiency of almost every organizational unit. The authors indicate a research gap of methodological and application nature in the area of risk measurement in the analysis of budget variances. Therefore, the aim of the article is to create universal and flexible models enabling probabilistic quantification of the risk of budget variance regardless of the nature of the cost, the person budgeting and the budgeting unit. Extreme value theory was used to develop the model. The results of the work are models allowing for the estimation of the limit level of deviation for assumed probabilities and models determining the level of deviation for a given probability level. The application of these models in budgetary control will allow for a synthetic assessment of the degree of budget execution in the company, comparing the quality of budget execution over time as well as between units, defining the limits of materiality of budget variances. For the purpose of model verification, the authors have used budget variances of cost energy consumption, which have been determined on the basis of empirical distributions obtained from data coming from the system of budgetary control implemented at a university located in a larger European city.

THE BUDGET OF THE ITALIAN STATE BETWEEN THE PANDEMIC AND THE UKRAINIAN CONFLICT, IN THE CONTEXT OF THE EVOLUTION OF THE EUROPEAN PROJECT

The balanced budget principle was introduced with the fiscal compact at the European level to pursue the aims of the European project also with an accounting and financial instrument. This principle was constitutionalized in Italy in 2012 with Article 81. The budget variance was seen as an exceptional event to be avoided at all costs, and until 2020, events never required a budget variance. This entailed some economic sacrifice and an abrupt adaptation of Constitutional Court jurisprudence aimed at placing more emphasis on the accounting principle over the rights of certain categories of citizens. This emergency approach, over 2020 and 2021, led to as many as five budget slippages. In March 2021, the Russian invasion of Ukraine began, a fact that destabilized all political and economic relations worldwide. By November 2022, the economic situation had become so unsustainable that on November 9, Parliament authorized a budget deviation to the amount of 9.1 billion. It can be said that, in the last two years, the exception clause of Article 81 Const. has been used for objectively exceptional events (pandemic and Ukrainian conflict), so that the use of the budget deviation is perfectly justified by the events. This fact, therefore stands to mean that so far, budget slippages have not negatively impacted the original rationale of the rule: to use monetary and financial leverage to evolve the European Union project.

중국과 일대일로 연선국가 간 주가수익률 전이효과 분석

The purpose of this study is to analyze the spillover effect of stock returns between China and 10 countries along the One Belt One Road. To this end, the spillover index suggested by Diebold & Yilmaz (2012) was used. Summarizing the results of the empirical analysis, first, 60% of the variance in forecasting errors in stock returns in China was explained by self-impact. Among the countries along the line, the share explained by the budget error variance of stock returns in Russia, Singapore, and Indonesia was found to be 3.6%, 8.6%, and 5.5%, respectively. Second, the total spillover index was 57.7, which means that 57.7% of the prediction error variance of stock returns in one country can be explained by the impact of stock returns in other countries. Third, according to the results of the total spillover effect time variability analysis using rolling sample analysis, the total spillover index and the Chinese SSEC index had a weak positive (+) relationship before the One Belt One Road implementation (2013). After implementation, it was found to have an average negative (-) relationship. This shows that inter-regional connections or ripple effects have been strengthened since the implementation of the One Belt One Road and the synchrony between the Chinese market and other markets is deepening.

PENGARUH VARIAN ANGGARAN, UKURAN PEMERINTAH DAERAH, DAN KAPASITAS FISKAL TERHADAP KINERJA KEUANGAN PEMERINTAH DAERAH

This study aims to examine the effect of budget variance, local government size and fiscal capacity on the financial performance of district/city governments in Aceh in 2018-2020 based on efficiency ratios and effectiveness ratios. The data used is secondary data from local government financial reports that have been audited by BPK RI. The data analysis method used is Spearman's Rho Correlation, Multiple Linear Regression Test and Coefficient of Determination Test. This study uses two regression models. The first model of the dependent variable of financial performance is measured using the efficiency ratio and in the second model the dependent variable of financial performance is measured using the effectiveness ratio. The results showed that the budget variance and fiscal capacity partially had no effect on the financial performance of local governments based on efficiency ratios, while the variable size of local government has a negative and significant effect on the financial performance of local governments based on efficiency ratios. In the second model that uses the effectiveness ratio, budget variance and fiscal capacity have a negative and significant effect on local government financial performance, while the variable size of local government has no significant effect on the financial performance of local governments based on the effectiveness ratio. The result of the Coefficient of Determination analysis is 0.023, which means that the budget variance, size of local government and fiscal capacity can explain 2.3% of local government financial performance based on efficiency ratios. While in model 2, the coefficient of determination is 0.246, which means that the budget variance, the size of the local government and the fiscal capacity can explain 24.6% of the financial performance of the local government based on the effectiveness ratio.

USE OF IFMIS IN BUDGETARY CONTROLS AND FINANCIAL ACCOUNTABILITY IN COUNTY GOVERNMENTS IN WESTERN KENYA

<p>The purpose of this study was to determine the influence of the use of IFMIS in budgetary controls on the financial accountability of county Governments in Western Kenya. The study adopted a correlational research design. Primary data was collected using questionnaires. The study target population was 1110 county staff comprising Cabinet executive officers, IFMIS directors, finance staff, revenue officers, and planning and procurement staff. Simple random sampling was used to select 294 respondents. Reliability was tested through Cronbach Alpha, validity was tested through expert analysis and principal component factor analysis. SPSS was used to analyze descriptive and inferential statistics. Descriptive statistics consisted of frequencies. Inferential statistics consisted of Binary logistic regression analysis. Cox & Snell R Square was established as 0.699. Wald statistic was significant with p values of 0.19. Correlation analysis showed r = of 0.814. The binary logistic regression coefficient was β = 2.049, p-value .019 and Exp (β)= 7.76 for budgetary controls. It was recommended that the implementation of IFMIS should be strengthened and regularly reviewed to identify loopholes that still exist that reduce effectiveness. This would improve fiscal discipline by a very high percentage as shown by the odds ratio of budgetary controls which is greater than one. The government should enforce the use of IFMIS in budgetary controls. This will lead to minimal budget variance and budget deficits. Better ways that can make IFMIS adhered to in budgeting should therefore be enforced this will improve financial accountability as evidenced by the odd ratio of budgetary controls.</p><p><strong>JEL:</strong> G21; G29; G38</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0919/a.php" alt="Hit counter" /></p>

Auditors' workload and audit quality under audit hour budget pressure: Evidence from the Korean audit market

By utilizing unique audit hour (actual and budgeted) data from Korea, this study examines the impact of auditors' workload on audit quality under audit hour budget pressure. We find the intensity of auditor workload has a negative impact on audit quality when total audit hours exceed budgeted hours (i.e., unfavourable budget variance). When we breakdown the audit workload by auditor level, we find partner workload has a negative impact on audit quality regardless of the budget variance, while senior auditor workload negatively affects audit quality only when the budget variance is unfavourable. We cautiously interpret our empirical findings to suggest that stress and burnout caused by increased audit hours under budget pressure can compel auditors to engage in behaviours that undermine audit quality.

Citizen Participation and Budget Variance: How Does Local Government Make Better Fiscal Accountability?

We explore how citizen budget participation influences the difference between the original and final versions of local government budgets. Our findings based on 1,506 city and county governments in the U.S. show that localities with a higher level of citizen participation tend to increase any budget gap between original and final expenditures but decrease the gap on the revenue side of the budget. Citizens appear to be reluctant to modify revenues due to the lack of flexibility in allocating the tax burden. Alternatively, citizens may have more willingness to exploit the uncertainty of how expanded services will ultimately be funded over time. Our analysis provides insights into how public participation mechanisms influence the fiscal accountability of the presiding government budget decision makers.

Analisis Laporan Ikhtisar Realisasi Anggaran Untuk Menilai Pencapaian Kinerja Keuangan Pada Kantor Pemerintahan Dinas Lingkungan Hidup Provinsi Sumatera Utara

Budget Realization Report is a report that describes the realization of income, expenditure and financing for a period. Financial performance is a performance measure that uses financial indicators. This study aims to assess the financial performance of the North Sumatra Province Environmental Service Government Office for the 2018-2021 period by using the analysis of the Revenue Budget Variance Analysis, the Decentralization Degree Ratio, the Effectiveness Ratio of Regional Original Revenue, the Regional Expenditure Efficiency Ratio, and the Regional Expenditure Harmony Ratio. This research method uses a quantitative descriptive approach. The analysis method is carried out by assessing or measuring local government financial performance which is measured based on: Income Variance Analysis, Decentralization Degree Ratio, Regional Expenditure Efficiency Ratio, Effectiveness Ratio of Regional Original Revenue, Regional Expenditure Harmony Ratio. The results of research on financial performance at the North Sumatra Province Environmental Service show that 1) Realization of the revenue budget in 2021 is unfavorable but is good if viewed from the whole during the 2018-2021 period. 2) from the Decentralization Degree, showing a ratio of 100%, it can be concluded that the ratio is classified as very good. 3) Regional Expenditure Financial Performance with an average percentage ratio of 90.15% which is on a less efficient interval scale. 4) The PAD Effectiveness Ratio is said to be effective with an average percentage ratio of 120.43% which is included in the very Effective criteria. 5) Shopping Harmony can be concluded that the average percentage ratio is 83,02%.

Determinan Kinerja Anggaran pada Organisasi Perangkat Daerah

Budget performance is the basis for evaluating and assessing the quality of financial management and budgeting in government organizations, especially in local government’s agencies. The purpose of this study is to examine the effect of budget size (TB), budget change (PB), and previous year budget variance (VS) on budget performance (KA) at agencies of Gayo Lues Regency. The sample in this study amounted to 44 work units of regional apparatus (SKPD) for fiscal year 2016-2017. Data analysis using multiple linear regression model. The results show that PB has no effect on KA, while TB and VS have negative effect on KA

Evaluating the Recessionary Impact on Election Administration Budgeting and Spending

Recent research indicates the need to understand the role financial resources play in election administration. A key question is, when considering “financial resources,” how much does economic hardship affect the differences between the budgeted amount and the actual amount spent?. The limited research that has examined this question comes from the United Kingdom; it shows that there are significant differences between the two measures and they vary systematically based upon fiscal environmental conditions. This research examines whether the fiscal environment influences election administration budgets, spending, and the resulting budget variance in local US jurisdictions. Using county election administration spending data from four states, this research indicates election administration budgets, spending, and variances are related to the fiscal environment. Not only does this work have implications for measurement of election cost, but this work is key to understanding the financial situation election administration faces given pandemic-related economic woes.

Deep Learning Emulation of Subgrid‐Scale Processes in Turbulent Shear Flows

AbstractDeep neural networks (DNNs) are developed from a data set obtained from the dynamic Smagorinsky model to emulate the subgrid‐scale (SGS) viscosity (νsgs) and diffusivity (κsgs) for turbulent stratified shear flows encountered in the oceans and the atmosphere. These DNNs predict νsgs and κsgs from velocities, strain rates, and density gradients such that the evolution of the kinetic energy budget and density variance budget terms is similar to the corresponding values obtained from the original dynamic Smagorinsky model. These DNNs also compute νsgs and κsgs ∼2–4 times quicker than the dynamic Smagorinsky model resulting in a ∼2–2.5 times acceleration of the entire simulation. This study demonstrates the feasibility of deep learning in emulating the subgrid‐scale (SGS) phenomenon in geophysical flows accurately in a cost‐effective manner. In a broader perspective, deep learning‐based surrogate models can present a promising alternative to the traditional parameterizations of the subgrid‐scale processes in climate models.

An Experiential Educational Intervention to Improve Nurse Managers' Knowledge and Self-Assessed Competence With Health Care Financial Management.

Nurse managers often list finance as the most challenging responsibility of their roles. This study examined the outcomes of an experiential, evidence-based educational intervention to increase nurse managers' knowledge and competence with the financial aspects of their roles. The study design was a pretest-posttest comparative evaluation. Twenty-three nurse managers attended two 4-hour sessions covering general budget terms, productivity measures, variance analysis, and personnel budgeting. Pre- and posttests included 20 questions obtained from health care finance texts and preparatory materials from a nurse leader certification examination. Preand postassessments consisted of the finance portion of the Nurse Manager Leadership Partnership's Nurse Manager Skills Inventory. Scores improved significantly (p ≤ .05) for the posttest and the American Organization of Nurse Executives Nurse Manager Skills Inventory Finance self-evaluation questions (p ≤ .01). Experiential methods were successful in facilitating learning. Certification examination questions addressed relevant areas of financial knowledge necessary for nurse managers' role in the financial management of their units. [J Contin Educ Nurs. 2020;51(4):181-188.].

Examining Cost Measurements in Production and Delivery of Three Case Studies Using E-Learning for Applied Health Sciences: Cross-Case Synthesis.

BackgroundThe World Health Report (2006) by the World Health Organization conveys that a significant increase is needed in global health care resourcing to meet the current and future demand for health professionals. Electronic learning (e-Learning) presents a possible opportunity to change and optimize training by providing a scalable means for instruction, thus reducing the costs for training health professionals and providing patient education. Research literature often suggests that a benefit of e-Learning is its cost-effectiveness compared with face-to-face instruction, yet there is limited evidence with respect to the comparison of design and production costs with other forms of instruction or the establishment of standards pertaining to budgeting for these costs.ObjectiveTo determine the potential cost favorability of e-Learning in contrast to other forms of learning, there must first be an understanding of the components and elements for building an e-Learning course. Without first taking this step, studies lack the essential financial accounting rigor for course planning and have an inconsistent basis for comparison. This study aimed to (1) establish standard ingredients for the cost of e-Learning course production and (2) determine the variance instructional design has on the production costs of e-Learning courses.MethodsThis study made use of a cross-case method among 3 case studies using mixed methods, including horizontal budget variance calculation and qualitative interpretation of responses from course designers for budget variance using total quality management themes. The different implementation-specific aspects of these cases were used to establish common principles in the composition of budgets in the production and delivery of an applied health professional e-Learning course.ResultsA total of 2 case studies reported significant negative budget variances caused by issues surrounding underreporting of personnel costs, inaccurate resource task estimation, lack of contingency planning, challenges in third-party resource management, and the need to update health-related materials that became outdated during course production. The third study reported a positive budget variance because of the cost efficiency derived from previous implementation, the strong working relationship of the course project team, and the use of iterative project management methods.ConclusionsThis research suggests that the delivery costs of an e-Learning course could be underestimated or underreported and identifies factors that could be used to better control budgets. Through consistent management of factors affecting the cost of course production, further research could be undertaken using standard economic evaluation methods to evaluate the advantages of using e-Learning.

Application of extreme value analysis in the assessment of budget variance risk

This paper presents the methods for the evaluation of budget variance risk, i.e. the risk of a difference between the budgeted and actual figures. The postulated approach is based on extreme value analysis (EVA), to offer, among other things, the evaluation of maxima distribution parameters for studied phenomena. The proper recognition of these parameters yields potential for calculation of probabilities for budget variance to pass certain levels established as critical. This methodology can be used to evaluate deviation levels by time period, and to compare them against historical data. The main objective of this paper was to examine the utility of the theory of extreme values in the estimation of budget deviation risks. The study presents the results of probabilistic analyses of data obtained from a budgetary cost control unit of a production company located in eastern Poland, for the period of 2011-2012. The developed method of analysis and assessment of budget deviations is in line with the development of concepts and methods of management accounting.

Revenue Budget Variance and Capital Expenditure Realization Emperical Evidence from Indonesian Local Goverments

This study aims to examine the effect of local revenue variance, variance of fund balances and budget account surplus (SILPA) for capital expenditure realization. The population in this study were all districts / cities in Indonesia, with observations taken from 2010 to 2014 amounting to 508 districts / cities from 34 provinces. Based on the Slovin formula, obtained a sample of 345 districts / cities as observation data. Data obtained from local government budget and budget realization report 2010-2014). Multiple regression analysis applied to data analysis. Empirical results indicate that the variance of local revenue is related to the realization of capital expenditure. The results also reported the relationship between variance of equilibrium funds and capital expenditure realization as well as the relationship between budget account surplus and capital expenditure realization. The results are also related simultaneously between the variance of local revenue, variance of fund balance, and budget account surplus (SILPA) for capital expenditure realization. The conclusions of this study are the variance of local revenue, the variance of fund balance, and the remaining budget have a positive effect on capital expenditure. Thus, local governments can be said to have changed the variance of Regional Income, balance funds and SiLPA to capital expenditures. The consequence is the emergence of new capital expenditure programs that may not be realized.