Budgeting Practices Research Articles

Practice of Participatory Budgeting at the Corporate Foundation

Budget participation in the organization is intended to have a positive effect on control and motivation in achieving goals and public accountability. However, budget participation also sometimes does not work well due to several obstacles, such as miscommunication, lack of commitment, and low motivation to perform. Foundation as a non-profit oriented organization has a unique situation in terms of performance. Performance that is identical to profit oriented applied to non-profit organization certainly has its own phenomenon. Whether a corporate foundation performing better than foundation in general by implementing a participatory budgeting is very interesting to explore. The purpose of this study is to explore the implementation and evaluation of participatory budgeting, particularly in the education sector, at foundation owned by company. This research approach is qualitative with case study on a Company Foundation K. The company foundation is the unit of analysis of this research. The informants involved were teachers, company staff from the Business and Support Division, the Education Office, and staff of foundation from the Education Division. The results of the study indicate that the success of implementation participatory budgeting is influenced by internal schools, such as principals and teachers and external schools, such as regulations from the company and the Education Office/government. The biggest challenge is the inconsistency in the implementation that is different from the planning. Changes in policies and changes in implementation procedures, both internally and externally, affect the staff’s motivation and responsibility for implementing the budget. Thus, the performance of budget absorption, especially at the education sector, has not been optimal can be improved by developing participatory budgeting practices that are transparent, participatory, and accountable. Keywords: Participatory Budget Implementation, Participatory Budget Evaluation, Corporate Foundation, Non-Profit Oriented, Budget Performance .

Who will benefit from extended budget participation? An empirical analysis of South Korean participatory budgeting practices

IMPACT Local governments around the world have implemented various budget participation mechanisms to overcome the drawbacks of representative-directed budget allocation by allowing the public to participate directly in the budget process. How far these budget participation mechanisms influence budget allocation decisions and produce the desired financial outcomes is still under debate. This article explains South Korean local government budget participation practices and reveals that adopting public budget participation mechanisms with greater citizen empowerment and inclusiveness increases expenditures that benefit the majority at the expense of special interest groups. The authors’ findings will be helpful for local government managers and policy-makers who are considering adopting budget participation mechanisms.

Institutional Pressures and Accounting Control Practices of Small and Medium Manufacturing Enterprises in Lagos State

The extent to which institutional pressures inform SMEs’ choice of accounting controls system seems unclear as considerable evidence in this line of thinking are only available for large firms and public sectors organizations. In view of the foregoing, the study investigated the extent to which institutional pressures (Regulatory,Association and provider of capital pressures)influence Small and Medium Manufacturing Enterprises (SMMEs) choice of accounting control mechanisms(diagnostic budget, interactive budget and comprehensive reward system). The study obtained quantitative data through self-administered questionnaire from randomly selected 262 managers of small and Medium Manufacturing Enterprises in Lagos State respectively. The obtained quantitative data were subjected to multiple regression analysis (Ordinary Least Squares). The findings of the study revealed that both institutional contingency (association and regulatory) influence the choice of accounting control mechanisms. Specifically, variation in diagnostic budget practice is explained by regulatory pressure(t-value=4.000 P-value< 0.01),Choice of interactive budget practice is also informed to a greater extent by both regulatory pressure and association pressure(t-value=2.896 P< 0.01) and (t-value=3.867, P-value < 0.01) while the choice of comprehensive reward system is driven by both regulatory and association pressure (t-value=3.233, P-value < 0.01) and (t-value=4.360, P< 0.01).Base on these findings, the study concludes that managers of Small and Medium Manufacturing Enterprises may use accounting control techniques as driven by association pressures and regulatory pressures not necessarily by the need to achieve goal congruence. Consequently, organization may unnecessarily incur avoidable cost on the use of accounting control for other purposes that are not goal –congruence.

Green budgeting: A way forward

Green budgeting refers to the integration of climate and environmental perspectives into a government’s budgetary processes. Based on the resources of the OECD’s Paris Collaborative on Green Budgeting and experiences in OECD countries from implementing green budgeting, this paper identifies seven key areas to support the development of green budgeting practices in making progress toward climate and environmental goals. The key areas consider the institutional frameworks, budgetary tools, transparency and accountability arrangements and the enabling environment for budgeting in the public sector.

Promoting Participatory Budgeting Practices in Indonesia: Lessons from Malang City

This study aims to analyze community participation in the process of development planning and APBD formulation in Malang City. This research uses a qualitative approach and the data is sourced from document studies, literature studies and in-depth interviews with informants selected by a purposive method. The results show that even though the process of dialogues in the implementation of Musrenbang RKPD has been well involving various elements of society in order to plan the development of the regions, the final decision remains dominant in the government hands. Moreover, the spaces of community participation in the post-musrenbang stage are also known to be inadequate. There are four factors hampering the community participation: low political commitments of the government elites, not yet optimal channels of the community participation, less supportive government bureaucrats, and lack of public awareness. There are four strategic efforts to strengthen the community participation: provide political education to civil society, implement the community aspiration ceiling in the Musrenbang RKPD, form the community forum in the post-musrenbang stage, and implement a public planning and budgeting system that supports the principles of good governance.

A Cross-Country Analysis of Green Public Finance Management and Budgeting in Supporting Sustainable Development

This study analyses green public finance management (PFM) and emphasise its stages to support sustainable development. It aims to explore the practices of green PFM and budgeting in member countries of the Organization for Economic Co-operation and Development (OECD) and the European Union (EU). A comparative cross-country analysis was performed using the secondary data from "the Joint Survey on Emerging Green Budgeting Practices" conducted by OECD and EU. It is concluded that green PFM and budgeting is a new implementation in limited countries or has not been put into practice in most of them efficiently yet. It is considered that green PFM and budgeting will become more crucial in future because of the effects of climate change and environmental degradation. This study is also one of the limited research focused on the main stages of the green PFM in reaching the United Nations Sustainable Development Goals (UN SDGs) regarding climate change and environmental issues.

Capital budgeting and Kelly betting

Capital investments are easily interpreted as bets and vice versa. The mathematical theory of betting, often known as ‘Kelly betting’, has implications for all financial decision-making under uncertainty. There have been attempts to exploit Kelly betting methods in financial portfolio optimization, but there has been little analysis of conventional capital budgeting methods against a Kelly framework. A simple comparison between methods reveals that capital budgeting decisions made using conventional finance methods can embed the error that Kelly theorists call ‘overbetting’. The outcome of overbetting is that the firm reduces its expected compound capital growth rate while simultaneously adding to the volatility of its anticipated growth path. That unfortunate pairing is mathematically precluded under Kelly betting rules but is implicitly, albeit unknowingly, sanctioned by accepted capital budgeting practices in finance. JEL Classification: G11, G12, G31

INITIATIVE PROJECTS AS ONE OF THE PROMISING FORMS OF CIVIL PARTICIPATION IN RESOLUTION OF ISSUES OF SOCIO-ECONOMIC DEVELOPMENT OF THE TERRITORY (BY THE MATERIALS OF THE ALTAI TERRITORY)

In the article, in the context of the topic of socio-economic development of the territory, the mechanism for introducing a new and promising form of citizens» participation in solving issues of local importance — initiative projects is considered. They involve providing the population of municipalities with the opportunity to develop and put forward for consideration by the authorities their own projects aimed at improving and developing their place of residence. Initiative projects contribute to the strengthening of trusting relations between the population and authorities, their mutually beneficial cooperation, more rational use of budgetary funds, the growth of residents» interest in improving the comfort of the micro-territory, the emergence of new and more effective approaches to solving common pressing issues.
 The authors consider the legal and organizational foundations for the implementation of initiative projects, give practical examples confirming the importance of real interaction between the authorities and the population in the course of the process under study. The role of the population in shaping the practice of initiative budgeting and the need to introduce new forms of involving citizens in local problems are emphasized. Attention is focused on the relevance of involving residents in a specific management process and increasing the interest of all its participants in the final result of joint activities.

What restricts SMEs from adopting sophisticated capital budgeting practices?

What restricts SMEs from adopting sophisticated capital budgeting practices?

MSE Response during Times of Crisis: The Roles of Budgeting Micro Functions and Guanxi

This study explores how micro and small enterprises (MSEs) rely on and adapt their budgetary practices to guide their activities during times of crisis, specifically during the COVID-19 global pandemic that began in early 2020. While the existing literature has mainly focused on large enterprises during economic crises, this paper will specifically consider MSEs in Southeast China during and since the pandemic. The primary data were collected via an online survey distributed in Wenzhou municipality, with 397 responses included in the analysis. The results indicate that within the budgeting process, the micro functions of planning and performance evaluation had less importance during the pandemic while the importance placed on the function of resource allocation was unchanged. The findings suggest that MSEs during crises placed less importance on the budgeting process and more on guanxi-related considerations for maintaining financial liquidity, including customer and government relationship building. Our findings add a resource-based view of the capability of guanxi during times of crisis. In addition, the limitations and future research are discussed.

Competing logics in budgeting in a university setting in Tanzania

PurposeThis study aims to investigate how actors’ responses to competing logics (academic and business logics) in budgetary practices in a university setting in Tanzania were shaped by state pressure, market pressure and organizational characteristics (funding certainty and changes in university ownership) and how actors’ agency was exercised in enacting competing logics.Design/methodology/approachThe data for this study were collected from interviews, observations, informal discussions and document review. The data analysis processes were guided by institutional logic concepts and the role of actors’ agency.FindingsThe findings demonstrate how academic logic traditionally subsisted in a university setting in which there was funding certainty. Changes in the university’s ownership resulted in funding uncertainty. Market and state pressure increased the intensity of funding uncertainty, which supported business logic. While market logic supported the emergence of business logic, state pressure altered the balance of the competing logics. University actors responded by selective coupling and compartmentalizing where both elements of academic and business logics were enacted. While managers prioritized business logic, academics prioritized academic logic. However, the role of agency was exercised in actors’ responses, subverting both academic and business logics.Practical implicationsManagers should appropriately enact both elements of competing logics to avoid marginalization of some of the core university activities. In addition, profitable business ideas should be considered, identified, planned and implemented successfully. Moreover, there is a need to change the historically contingent and culturally situated environment when enacting competing logics. Furthermore, the state influence on universities should be considered to prevent unnecessary uncertainties in budgetary practices.Originality/valueThe paper demonstrates how selective coupling and compartmentalizing strategies were used by actors to enact both elements of competing logics in budgetary practices in a university setting. It further shows how actors’ agency influenced and subverted competing logics. The paper, thus, responds to the recent calls to investigate the influence of institutional logics on control practices, and the role of actors in strategically handling different logics in developing countries (Damayanthi and Gooneratne, 2017; Argento et al., 2020; Anessi-Pessina et al., 2016; Grossi et al., 2020). It further suggests new analysis of academic and business logics in their context.

Демографічна платформа формування модельного бюджету охорони здоров’я (реформаційне значення та актуарна оцінка).

The practice of social budgeting in Ukrainian healthcare sector requires certain improvement. This is determined by a number of factors: the limitedness of principles and simplification of the mechanisms for formation the budgets of medical institutions; the disregard for demographic factors, importance of which is growing in the context of the Pandemic-19; and the conduct of military actions on the territory of Ukraine. The article defines the theoretical foundations of the organization of healthcare social budget and the institutional characteristics of its improvement. The budgeting process in the country’s healthcare system is considered, including the history of healthcare reform, and its inconsistency with the needs of the population in medical treatment is noted. Risks in the healthcare budgeting process mostly emerge because of the disregard for demographic factors of population’s morbidity whose impact on budgeting significantly increases in the current crisis situation in Ukraine. Therefore, the problem of balancing local budgets and determining the amount of financial assistance based on an improved normative approach seems to be relevant. The aim of the article is to implement the problem of financial stabilization of the healthcare system based on the cost elasticity depending on demographic factors. The novelty of it is the theoretical substantiation and modeling of financial processes, taking into account the age-sex structure of the population. Along with the deductive one, the probabilistic research method was used. As a new approach to the organization of healthcare social budget, a funding model based on gender and age is proposed. A medical and demographic matrix has been developed that allows to perform various operative financial calculations and determine the cost of medical treatment of the population depending on the structure and dynamics of demographic factors.

한국기업의 투자분석 실태

Purpose This paper is concerned with reporting current capital budgeting practices of Korean firms with respect to the appraisal of capital investment projects, which was surveyed at the beginning of 2020. Methods Empirical research based on data from an e-mail questionnaire, designed around a factual and attitudinal survey. Results The survey result shows that the responding firms use an internal rate of return(71.7%), a net present value(62.2%), and a payback period(62.2%) technique. Also, it shows that the payback period technique has a close relationship with an R&D expenditure at the significance level of 5%. Conclusion It is explored that Korean firms shows the usage of investment project appraisal techniques similar to western firms, but much different from Japan and China.

Toplumsal Cinsiyet Temelinde Bütçelemenin Siyasi Boyutu

Toplumsal cinsiyet algısının sosyo-ekonomik ve ekonomi politik bir tartışma alanı olarak ele alınması, toplumsal cinsiyet temeline dayalı bütçelemenin farklı uygulama biçimlerini değerlendirmek açısından önemlidir. Nitekim toplumsal cinsiyet rollerini siyasal karar alma süreci içinde görünür kılan politika aracı toplumsal cinsiyet temelli bütçeleme yaklaşımıdır. Toplumsal cinsiyet temelli bütçe yaklaşımlarında dikkate alınması gereken temel nokta, bütçe politikalarının kadınların özel alana hapsolma, kadın emeğinin görünmez kılınması gibi toplumsal cinsiyet rolleri sonucunda şekillenen yapısal sorunları çözümlemeye yardımcı olup olmadığıdır. Bu çerçevede temel amaç, cinsiyet rollerini dönüştürmeyi amaçlayan bütçe sistemleri oluşturabilmektir. Buradan hareketle çalışmada cinsiyet rollerini meşrulaştıran sosyal hizmet ağırlıklı bütçe politikaları toplumsal cinsiyete “duyarlı” yaklaşımlar olarak değerlendirilirken, cinsiyet rollerinin dönüşümünü içeren yaklaşımlar toplumsal cinsiyet “esaslı” bütçe politikası yaklaşımı olarak kavramsallaştırılmaktadır. Böyle bir kavramsallaştırma demokrasi modelleri ile toplumsal cinsiyet bütçelemesi uygulamaları arasındaki ilişki çerçevesinde ele alınmaktadır. Buradan hareketle her bir demokrasi modelinde toplumsal cinsiyet temelli bütçe politikalarının kadınların toplumsal konumu üzerindeki etkileri değerlendirilmekte ve sorgulanmaktadır.

Factors Affecting Budgeting Practices of Principals In The Administration of Public Secondary Schools in Southwest Nigeria

The study assessed the factors affecting budgeting practices of principals in administration of public secondary schools in Southwest, Nigeria. The study was guided by one objective, research question and hypothesis. Descriptive survey research design was used for the study; the population of the study was 3254 while the sample size was 650 respondents. Multi-stage sampling technique was use to arrive at the sample size. The instrument used for data collection was a self-structured questionnaire titled “Factors Affecting Principals’ Budgeting Practices Questionnaire (FAPBPQ)”. The questionnaire is in one clusters with 9 items. The data collected were analyzed using Mean and Standard Deviation (SD) to answer the research question. The major findings of the study were that school principal’s negative attitude towards the budgetary plans, poor budget implementation, among others do actually affects budgeting practices of principals in administration of public secondary schools in Southwest, Nigeria. The finding also revealed that there is no statistically significant difference between the mean scores of the principals and bursars on principals’ budgeting practices in administration of public secondary schools in Southwest, Nigeria. Based on the findings of the study, it was recommended among others that Principals should endeavour to involve their staff in school budget planning and preparation and should not neglect their opinions and contributions for productive and effective administration of school.

Determinants of Sustainable Capital Budgeting Practice: A Structural Equation Modelling Approach

Across the globe, capital budgeting – the planning process of appraising an organisation‟s long term investments for funding – plays a pivotal role in economic growth by providing the platform for mobilising long-term funds for economic development. Capital budgeting practice refers to the aggregate tools/techniques for strategic investment decisions under risk and uncertainty conditions (Desai, 2019; Hillier et al., 2021). It involves a large cash outlay, expecting a future stream of benefits/income/return. Existing research suggests that financial and non-financial considerations influence managers‟ choices of CBTs across nations (Batri & Verma, 2017). One of the significant concerns of Oman‟s Ninth five-year development plan 2016-2020 is its focus on achieving a private sector-driven economy enabled by public-private partnership (PPP) projects and related growth strategies that will drive non-hydrocarbon and more excellent employment opportunities for the Omani nationals. To this end, the manufacturing sector is at the centre of Oman‟s Top 7 Sectors comprising other critical industries, including Construction, Wholesale and Retail Trade, Agriculture and Forestry, Real Estate and Business Activities, Private households with Employed Persons, and Hotels & Restaurants (MoCI, 2014). However, there has been very little academic research on capital budgeting with a focus on the manufacturing industry of Oman. Keywords: Advanced capital budgeting techniques (ACBTs), Confirmatory factor analysis (CFA), Oman, Real options valuation (ROV), Structural equation modelling (SEM).

Public participation in the decision-making process at the level of territorial communities

The purpose of the article is to generalize the theoretical foundations and justify the feasibility of using innovative tools to involve citizens in the decision-making process at the level of territorial communities, spread the practices of participatory budgeting, which will contribute to the formation of an active civil society. The following methods were used to implement the tasks: abstract-logical; monographic and comparative; graphic; sociological survey method. The expediency of using the participatory budgeting mechanism for territorial communities is justified, which will contribute to the establishment of social dialogue between local self-government bodies and residents of the territorial community. A sociological survey was conducted to identify the realities of increasing public involvement in the decision-making process at the territorial community level. It was found that the respondents are equally concerned about urban and personal problems of planning the socio-economic development of the territory. Innovative mechanisms of public participation (consensus conference, consultative survey, guided visualization, world cafe, workshop, imagination, public development of alternatives) are proposed, which will contribute to the formation of an active civil society and increase the level of civic education. Public space is another innovative tool for the participation of community residents in the decision-making process. The conducted research contributed to solving the task and justifying the expediency of using innovative tools of public participation in the decision-making process, spreading the practices of participatory budgeting, which will contribute to the formation of an active civil society. The formulated author's conclusions and recommendations are characterized by a positive impact on the involvement of the public in the decision-making process, since the creation of a higher culture of decision-making and the activation of civil society at the level of the territorial community can contribute to receiving better services and improving the quality of life of the population

How do trade unions manage themselves? A study of Australian unions’ administrative practices

Dedication We gratefully acknowledge the invaluable contributions to the research that we discuss here by our dear friend and colleague the late Dr Sandra Cockfield; we miss her greatly. We dedicate this article to her. For a tribute to her see www.monash.edu/vale/home/articles/vale-dr-sandra-cockfield . The article discusses issues rarely addressed in research on Australian unions: the internal management policies and practices of unions, including human resource management, budgeting and strategy formulation. Management matters because it creates processes and systems that focus activity on whatever objectives a union or other organisation wishes to achieve. Our main research question is ‘how do Australian unions manage their employees, budgets, and strategies?’ Our study builds on earlier studies of US, UK and Canadian unions by adapting a survey instrument used in these countries. The Australian Council of Trade Unions (ACTU) asked national and branch unions to complete our online surveys. Of the unions surveyed, a majority of respondents use systematic human resource management policies and practices. They have also adopted strategic planning and budgeting practices. Echoing international findings, Australian unions have increasingly professionalised their administration. These findings are important since they have implications for how Australian unions deal with the challenges they face, including their revitalisation efforts and their responses to changing regulatory contexts.

Efficiency of Inter-Budgetary Regulation of Heavily Subsidized Budgets at the Subnational Level

The subject of this article is the set of economic and financial relations that develop in the process of inter-budgetary regulation and equalization of budgetary provision and balance of heavily subsidized budgets at the subnational level. The purpose of the study is to identify the degree of influence and effectiveness of the existing system of inter-budgetary regulation and fiscal decentralization in Russia in relation to heavily subsidized budgets at the subnational level in the context of their socio-economic, budgetary and financial condition and development. The methodological basis of the study is based on the Russian budgetary legislation, as well as domestic and foreign scientific studies devoted to the theory of fiscal decentralization (federalism), mechanisms for equalizing budgetary provision at the subnational level, approaches to assessing the degree of influence of fiscal decentralization on stimulating economic growth in regions and states. In the course of the study, the author applies a systematic approach, as well as general scientific and special methods: coefficient method, comparative, structural dynamic retrospective analysis. The analysis of the relationship and dispersion of the financial parameters of subnational budgets using the Pearson pair correlation coefficient, as well as the coefficients of variation and oscillation. The study reveals the problematic aspects of the effectiveness of the existing system of inter-budgetary regulation and the convergence of the socio-economic state of heavily subsidized regions in recent years. This result contradicts most budgetary practices and the theory of fiscal decentralization, which justifies the need for a qualitative change in the existing system of inter-budgetary regulation. The main conclusion of the study is that the existing mechanism of inter-budgetary regulation and the existing instruments for equalizing budgetary provision do not contribute to a significant change in the fiscal and socio-economic parameters of the development of heavily subsidized budgets at the subnational level. The nature of the use of the gratuitous aid received for this category of subjects of the country is reduced to short-term coverage of the gap in financing expenditure obligations but does not change the model of either the organization of budget regulation or the regional economy. Soft budget constraints create weak incentives and lead to financial and economic problems — increased dependency and subsidies.

EFFECTS OF STRATEGIC PLANNING PRACTICES ON SUCCESS OF NON-GOVERNMENTAL ORGANIZATION IN TURKANA COUNTY: A CASE OF SAVE THE CHILDREN

Purpose: The study focused on determining the impact of strategic planning practices on the success of Save the Children International. The study examined the impact of budgetary allocation on the success of Save the Children, strategic decision-making practices, strategic communication, and environmental analysis. Theory of Resource Dependency, Theory of Stakeholders, and Strategy Fit Theory anchored the study.
 Methodology: Description of the study's research design was used. The 46 employees of Save the Children were the target population which included program officers, communication and dissemination officers, administrative officers, and community workers. Census was used to collect data from all targeted respondents. Data was collected through questionnaires. SPSS version 25 was used to analyze data. This study used measures of central tendency to describe the data. Presentations were made in tabular form.
 Findings: The study findings revealed that, both budgetary allocation, strategic decision making, environmental analysis and governance have a positive effect of the success of organizations. The study concluded that, budget practices in the organization is effective and has positively affected on the NGO performance. The study also concluded that, strategic decision-making practices have a greater impact on the senior management and the board it was also concluded that, strategic decision-making practices gives managers an opportunity to quickly identify challenges during implementation. The study concluded that, strategic communication enhances satisfaction and team success and can only be accomplished with effective communication. The study concluded that, the SCI has not adopted modern technology in communication. The study concluded that, the SCI operates in politically and culturally non-conducive environments which has affected their performance to a great extent.
 Unique contribution to theory, practice and policy: The study recommended that, the SCI should provide enough funds for budgeting activities to enable them to run their budgeting effectively. Decisions should be made strategically with an aim of enhancing strategic performance by SCI. Before deciding on where to establish the NGO, the management should ensure that prosper scanning is done to ensure that the organization is not affected with the area politics. Further studies should therefore be conducted to determine the effect of budget allocation, strategic communication, environmental analysis, and governance of the success of the NGOs.