Budgetary Controls and Perceived Financial Performance of Tertiary Institutions Under (BTVET)

BUDGETARY CONTROLS AND PERCEIVED FINANCIAL PERFORMANCE OF TERTIARY INSTITUTIONS UNDER (BTVET)

Declaration

I hereby declare that this dissertation is my original work and has not been submitted for a degree a ward to any other University.

Signature

………………………………………. ESUKU JOSEPH 2003/HD10/269U

Date

………………………………………..

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Approval

This dissertation has been submitted for examination with the approval of the following supervisors;

Signed

……………………………………………… Professor Munene JC

Date

……………………………………………..

Signed

……………………………………………... Dr. Isaac Nkote Nabeta

Date

……………………………………………

2

Approval

This dissertation has been submitted for examination with the approval of the following supervisors;

Signed

……………………………………………… Professor Munene JC

Date

……………………………………………..

Signed

……………………………………………... Dr. Isaac Nkote Nabeta

Date

……………………………………………

2

Dedication

This research work is dedicated to my father and mother, and more so my wife whose  prayers, love and unending support has led me to this hei ghts in my life time. time.

3

Acknowledgement

First and foremost to the almighty God, without you things should have been difficult. My special thanks go to the Administration of Makerere University Business School for  providing me with a scholarship in post graduate programme to pursue a degree of Masters in Business Administration (Accounting and Finance). In the same note, special thanks deeply go to my supervisors Professor Munene JC and Dr. Isaac Nkote Nabeta for their committed and continued guidance that has made this work a success. Special thanks go to Mr. Moya Musa for the continued concern and encouragement he offered me during the times of my research work. Special thanks to my colleagues whose guidance and comments enhanced greatly the accomplishment of this study. Particular thanks go to Tukamushaba Eddy, Olinga Raphael, Abeja Martha, Nkutu Geoffrey.

4

Acronyms

AC

:

Agricultural College

BTVET:

Business, Technical and Vocational Education Training

CIMA:

Chartered Institute of Management Accountants

HTI:

Health Training Institution

MOE&S:

Ministry of Education and Sports

TI

:

Technical Institute

TS

:

Technical School

UCC:

Uganda College of Commerce

5

TABLE OF CONTENTS Item Page

Declaration

…………………………………………………

Approval

………………………………………………….

(i)

(ii) Dedication

…………………………………………………

(iii) Acknowledgement

………………………………………..

(iv) Acronyms ……………………………………………….. (v) Table of Contents ………………………………………… (vi) List of Figures and Tables……………………………….

(ix)

Abstract ………………………………………………….

(x)

1.0

Background

………………………………………………………..

1.1

Statement of the Problem

1.2

Purpose of the Study

1.3

Objectives of the Study

1.4

Research Questions

1

………………………………………….

2

………………………………………………

3

…………………………………………….

3

………………………………………………...

3

1.5

Scope of the Study ………………………………………………….

4

1.5.1

Subject Scope ……………………………………………………….

4

6

1.5.2

Geographical Scope ………………………………………………...

4

1.6

Significance of the Study …………………………………………...

4

1.7

Conceptual Framework ……………………………………………...

5

2.0

Literature Review …………………………………………………...

6

2.1

Introduction …………………………………………………………

6

2.2

Concepts and Components of Budgetary Control …………………...

6

2.2.1

Budgeting and Planning …………………………………………….

6

2.2.1.1 Budgeting……………………………………………………………..

6

2.2.1.2 Budget Functions……………………………………………………..

8

2.2.1.3 Planning……………………………………………………………….

10

2.2.1.4 Planning Process………………………………………………………

12

2.2.2

Monitoring and Control ……………………………………………..

13

2.2.2.1 Monitoring…………………………………………………………….

13

2.2.2.2 Control…………………………………………………………………

15

2.2.3

Analyzing, Feedback and Performance ……………………………..

16

2.2.3.1 Budgetary Analysis……………………………………………………

16

2.2.3.2 Feedback……………………………………………………………….

18

2.3

Financial Performance ……………………………………………...

19

2.3.1

Performance Measurements………………………………………….

21

2.4

Relationship between Budgetary Controls and Performance ……….

24

3.0

Methodology ………………………………………………………..

30

3.1

Research Design …………………………………………………….

30

3.2

Population of Study .................................... ........................................

30

7

3.3

Sampling Design ……………………………………………………

30

3.4

Sample Size ………………………………………………………….

31

3.5

Sources of Data ……………………………………………………..

31

3.6

Data Collection Instruments ………………………………………...

31

3.7

Measurement of the Research Variables ……………………………

32

3.8

Reliability and Validity of Research Instruments …………………..

32

3.9

Data Processing and Analysis ………………………………………

33

3.10

Anticipated Limitations of the Study ……………………………….

33

4.0

Data Presentation, Analysis and Interpretation……………………….

34

4.1

Introduction

………………………………………..

34

4.2

Demographic Statistics

………………………………………..

34

4.2.1

Level of Education by Sex

……………………………………….

35

4.2.2

Level of Education by Age

……………………………………….

36

4.2.3

Level of Education by Period worked with Organization ……………

37

4.3

Budgetary Controls

38

4.4

Perceived Financial Performance …………………………………….

40

4.5

Correlation Analysis……………………………………………………

41

4.5.1

Multiple Regression Coefficients

…………………………………….

42

5.0

Discussion of results/findings …………………….................................

44

5.1

Introduction ……………………………………………………………

44

5.2

Budgetary Control Components

………………………………………

44

5.3

Perceived Financial Performance ………………………………………

46

5.4

Relationship between budgetary controls and perceived financial  performance

……………………………………………..

………………………………………………………….. 8

47

6.0

Conclusions and Recommendations …………………………………… 49

6.1

Introduction ……………………………………………………………… 49

6.2

Conclusions

6.3

Recommendations

6.4

Areas for further Research .................................. ............................

52

6.5

References …………………………………………………………..

53

6.6

Appendices .......................................................................................

59

6.7

Letter of Introduction by the Director Post Graduate Studies..............

65

...………………………………………………………….

49

................................................................................. 50

List of Figures and Tables:

Figure (i): Conceptual Framework

........................................... ..........

5

1

Table (1):

Percentage Shortfall between expected and actual amounts

2

of UCC Soroti ................................ .........................................

2

Table (2):

Sample Size......................................... ...............................

31

3

Table (3):

Reliability and Validity of Research Instruments

32

4

coefficients.

35

5

Table (4.1): Case Processing Summary...................................................

35

6

Table (4.2):

36

7

................................... ............. Table (4.3):

8

Age...................................................

38

9

Table (4.4): Level of Education by Period worked with

40

10

Organization......

42

11

Table (4.5): Rotated Component Matrix for Budgetary Componen ts…... 43

12

Table (4.6);

13

Performance.......

Level of Education by Sex Level of Education by

Rotated Component Matrix for Financial

37

59 59

9

Table (4.7):

Correlation Matrix……………………………………

Table (4.8):

Regression Analysis…………………………………

Table (5):

Time Frame of the Study.................................. .............

Table (6): Budget of study estimates.............................................. .

Abstract

This research was induced by the eminent low financial performance of BTVET Institutions in terms of Infrastructure Development, Service Delivery and Expenditure Related Activities. This research work examines the extent to which the Budgetary Controls lead to a positive perception on the Perceived Financial performance.

A cross sectional and descriptive survey design was adopted using a representative sample of 32 BTVET institutions out of a population of 111 institutions. Self administered questionnaires were used to collect data from respondents. Factor analysis, Rotated Matrix and chi-squares were used to determine the budgetary controls and  perceived financial performance of BTVET institutions while correlation and regression coefficients were used to determine the relationship between budgetary controls and  perceived financial performance.

The findings indicates a low implementation of budgetary controls, low perceived financial performance though slightly above average; with budgeting and planning, 10

monitoring and control and analyzing and feedback significantly correlated with  perceived financial performance in BTVET institutions.

This therefore calls for the payment of enormous attention by the management and staff in BTVET institutions to ensure that the implementation of budgetary controls is done focusing on Budgeting and Planning, Monitoring and Control and Analyzing and Feedback in order to enhance perceived financial performance.

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CHAPTER ONE 1. Background to the Study.

In a move to establish more tertiary institutions in the country, the government of Uganda formed a task force in 1982 mandated with the responsibility of establishing UCCs. Three (03) UCCs namely: Aduku, Kabale and Soroti were established as a pilot scheme in 1983 and two more UCCs namely Packwach and Tororo were established in 1984, (Apono, 2002). The Ministry of Finance and Economic Development in conjunction with Ministry of Education and Sports funds the operations of these institutions. The  budgetary control is decentralized; the institutions submit to the Minister for approval the estimates of incomes and expenditure of the Institute (the University 12

and other Tertiary Act, 2001 Articles 80-90). Budgetary control is “the establishment of budgets relating to the responsibilities of executives of a policy and the continuous comparison of the actual with the  budgeted results, either to secure by individual action the objectives of the policy or to provide a basis for its revision” C I M A (1999). Budgeting, Control and measuring and reporting, analyzing and feedback constitute elements of budgetary control (Chandan, 1998). According to Arora (1995), budgetary control is one of the very important tools of  planning and control. Many organizations fail because of lack of planning, by  planning many problems and dangers are anticipated which the organization has to face. In the case of UCC’s due to the shortfalls in the expected income for the overall annual budgets accruing from government budgetary cuts to BTVET sub sector, the funding for the FY 2003/2004 was 3.6% of the overall expenditure of MOE&S compared 4.0% for the FY 2002/2003 (Social Services Committee Report to Parliament), colleges scale down some of their plans to meet specific items such as utilities, food and in frastructural development. Table (1): The percentage shortfalls between the expected and actual amounts

received by UCC Soroti. F/Y

Expected UGX

Received UGX

Percentage shortfall

2003/2004

144,144,000

90,221,732

37

2004/2005 half year

62,935,000

25,875,622

40.9

Source: UCC Soroti Financial Report for the FY2003/2004

Due to above shortfalls, the total liabilities accruing to non-computerized staff salaries amounted to UGX 54 million and UGX 36 million to the suppliers of 13

food and non-food items for the financial year 2001/2002. This led to auctioning of the college truck because of non-payment of a supplier.

In the F/Y’s

2002/2003 – 2003/2004 the liabilities were UGX 31 million and UGX 38 million respectively accruing both to staff salaries and suppliers of food and non-food items. The reason advanced for such performance was inadequate funding, poor identification of targets and allocation of resources. Thus, the need for effective  budgetary controls which is a challenge to government supported tertiary institutions.

2.

Statement of the Problem.

Tertiary institutions draw budgets annually, however, there are inconsistencies in the budgetary implementation hence failure to stick to the drawn budgets. This has resulted in failure to meet budgetary obligations in many of these institutions. There have been delays in staff salaries, payment of suppliers and school activities have stalled because of lack of funds though these activities were  budgeted for. It is imperative therefore to investigate these inconsistencies and failures in financial performance in tertiary institutions.

3.

Purpose of the Study.

The purpose of the study was to examine the existing budgetary controls and financial performance of BTVET institutions.

4.

Objectives of the Study.

The objectives of the study were; 14

(I)

To establish the budgetary controls at the BTVET institutions.

(ii)

To establish the financial performance of the BTVET institutions.

(iii)

To establish the relationship between the budgetary controls and financial  performance at the BTVET institutions.

5.

Research Questions.

(i)

What are the budgetary controls at BTVET institutions?

(ii)

What is the financial performance of BTVET institutions?

(iii)

What is the relationship between budgetary controls and financial  performance at BTVET institutions?

6.0

Scope of the Study. Subject Scope

The study investigates budgetary controls and the perceived financial  performance of the BTVET institutions Geographical Scope

The study was carried out in the Government aided Tertiary Institutions under BTVET located in the Eastern, Northern and Central parts of Uganda, because of convenience and ease in the collection of data.

7.0 i.

Significance of the Study.

Findings of the study shall help Government in identifying the effects and 15

implications of its inconsistencies towards its tertiary education budget commitments. ii.

The study shall guide tertiary education administrators to a new planning  paradigm to effective budgetary controls and financial performance evaluation.

iii.

The Study shall add to the already existing literature on budgetary controls and  performance of the BTVET institutions.

iv.

The study is expected to enable the identification of budgetary control methods that are essential to financial performance of the BTVET institutions.

v.

The study shall enhance the regulator’s and policy maker’s formulation of appropriate policies, which enhance budgetary controls and financial performance in BTVET institutions.

8.0.

Conceptual Framework.

The conceptual framework figure below explains the relationship between the variables under the study, the budgetary controls (Independent Variable) and the level of financial performance (Dependent variable). Figure (i): Conceptual Framework

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Budgetary Controls

Perceived Financial Performance

Budgeting and Planning



Monitoring and Control

 

Analyzing & Feedback

Infrastructural development Service delivery Expenditure related activities

Intervening Variable  

Government policies Incentives

Source: (Literature reviewed from Blocher et a., 2002; Drury, Hilton et al., and Mordi 2000).

The Budgetary Control process comprised of budgeting and planning, which  provides a formal basis for Monitoring and Controlling the progress of the organization as a whole and its component parts, towards the achievement of the objectives

specified in the budgeting and planning stages, thus providing

feedback necessary to be able to make corrections to current operations and activities in order to meet the original objectives and plans, thus enabling the determination of the performance of the organization in financial, efficiency ratings, infrastructural and units produced terms. CHAPTER TWO: 2.0

LITERATURE REVIEW.

2.1

Introduction.

The literature reviewed in the study is cited mainly from studies carried out in 17

developing countries, regarding budgetary controls by other scholars and writers.

2.2

Concepts and Components of Budgetary Controls.

Budgetary Control is the process of comparing actual results with planned results and reporting on the variations (Lucy,1989). Control compares actual  performance and budgeted and helps expenditure to be kept within agreed limits. The most important managerial problem in Budgetary Control is the interpretation of budget variance. Deviations should be noted and corrective action taken. Budgetary Control is constituted of Budgeting, monitoring and control, analyzing and feedback.

2.2.1

Budgeting and Planning. 2.2.1.1

Budgeting:

Budgeting is the process of preparing and using budgets to achieve management objectives. A budget represents management’s plans of action for future periods of an organization (Drury, 2000; Pandey, 1994). Extensive use of budgeting has  been documented in studies of Scarborough et al., (1991). They have largely highlighted the significant emphasis, which diverse types of organizations in various countries, put on budgeting systems, as key elements of management control. Increasingly, however, there appears to be a paradigm shift in the management accounting literature, while there are still advocates of budgeting, critics argue that the traditional budget is no longer appropriate given changes in technology and the rapidly changing business environment (Kaplan, 1988, 1990; Johnson and Kaplan, 1987). Proponents of budgeting argue that budgets have 18

several important roles. Blocher, (2002), for instance argued that budgets help to allocate resources, coordinate operations and provide a means for performance measurement. Hilton (2000) agrees with this view and claim that the budget is most widely used technique for planning and control purposes. The Institute of Cost and Management Accounts defines a budget as a plan quantified in monetary terms, prepared and approved prior to a defined period of time, usually showing  planned income to be generated and/or expenditure to be incurred during that  period and the capital to be employed to attain given objectives (Mordi, 2000). Budgeting involves the preparation of an itemized financial statement showing what the expenditures are going to be over a given period, usually a year. The  budget may also show what income the institution is likely to generate during the same period.

Cole (1996), noted that fundamental to the success of any organization, is drawing a budget plan and putting it in operation. Further, notes that creating a budget is important as it enforces an organization to carefully consider the expected demand for its products, services and the resources required to meet that demand. It also translates the higher priorities for the organization into the appropriate resources required to achieve those priorities, as it would be difficult to allocate resources due to scarcity without a budget plan. It creates the baseline against which actual results can be compared, budgets act as a basis for measuring  performance in organizations and help in directing the activities of the organization hence giving earlier signals on variances in sufficient time to take corrective actions. Clarke and Toal (1999) too are of the opinion that budgets are 19

still essential and can for example, be incorporated as part of the financial component of the balanced scorecard. Pierce and O’Dea (1998), also subscribe to the view that budgets are still relevant to today’s business environment.

2.2.1.2

Budget Functions:

Budgeting serves functions of financial and management control. Financial control results to the control of financial resources while management control ensures that the activities of the parts of the organization are co-coordinated (Otley, 1987). Budgets coordinate the activities of the parts of the organization, through this; the objectives of the organization are harmonized with the objectives of

the

parts

or

departments.

Budgets

facilitate

coordination

through

communication of information about plans to managers and employees (Nassolo, 1997).

Budgets perform the function of control, which is the art of comparing where you are (actual performance) to where you are supposed to be (Budgeted) so that corrective action can be taken. It is necessary to ensure that plans as laid down in the budgets are being achieved. Through control, organizational activities are monitored and performance is evaluated (Sebbi, 1994; Lewis, 1996).

Budgeting at the local level is intended to improve service delivery by shifting responsibility from policy implementation to the beneficiaries and promotion of local skills. This is intended to place emphasis on transparency and accountability in the management of public affairs (Danilo, 2002). 20

On the other hand, if the budget is insufficient to compete a piece of work, additional funds should be availed so that the project is completed. Additional funds in from of supplementary estimates should be availed so long as satisfactory reasons are given, this will facilitate completion of projects on time. It will also reduce wastage of resources on uncompleted projects. There is need to plan for changing business conditions in order to appropriately take action that can deal with changes that occur should any of the plans be affected by such changes. This is the implication of having contingency plans available to deal with changes, which were unforeseen at the time when the budget was originally prepared (Parasuraman and Zeithml, 1994).

Mean while critics of budgets claim that budgets are bad for business, are no longer adequate and are “fundamentally flawed” as a planning and control mechanism in today’s complex and highly uncertain business environment McNally, (2002). Stewart (1990) claims that experts criticize budgets as being ineffective. According to him, “Budgets, says experts, control the wrong things, like head count and even profits” (Stewart, 1990, P. 179). Prendergast (2000) lists a number of problems with budgeting for planning and control purposes. First, a lot of guesswork is involved in the budgeting process. Second, budgets are increasingly inaccurate as a result of shorter product lifecycles and the rapidly changing business environment. Finally the extent of budget gamesmanship, he argues that over the years, budgets have resulted in a conflict between top management and their subordinates. 21

Another major criticism of budgets is the over-emphasis on short-term profits at the expense of continuous long-term improvements such as new product development and customer satisfaction (Hayes & Abernathy, 1980). McNally (2000) is also very critical of the traditional budget. He argues, “The days of traditional budgeting and panning are numbered” (McNally, 2000, P. 10). Some criticisms that McNally has of budgeting are that budgeting process consume too much time and incur very high costs. Consequently, when the budget is authorized, it may no longer be accurate and this causes problems for businesses in “today’s” unpredictable and fast-phased business environment (McNally, 2002, P.11). An annually established budget is, therefore, imperative to the effective and efficient functioning of the college (Zimmerman, 2003).

2.2.1.3

Planning:

Planning as part of the Budgeting system involves a long range planning, strategic  planning and short term planning (Sizer, 1989). Further, emphasizes that short term budgeting must accept the environment of today, and the physical human and financial resources at present available to the organization.

Planning involves selecting objectives and action to achieve them. It is looking a head and preparing for it, which links it to budgeting. Through planning the organization is able to assess where it is supposed to be in terms of objectives and goals. This comes from the information system (Mocker, 1970; Lewis, 1996; Stoner, 1996) 22

Good planning is characterized by clear objectives and goals. It must be simple and comprehensive. The plan should be well balanced and flexible so as to incorporate changes in the resources and should be time bound. Properly covered  plans tell what, when and how something is to be done (Chandan, 1995; Bhatia, 1996). Sound planning mentions priorities and the planning control cycle. Since there are so many activities to be performed, it’s imperative that they are listed in order of preference.

Budgets are put in place in advance of the budget periods based on anticipated set of circumstances or environment. The major decisions are made as part of the log term planning process (Selznick, 1988). Benefits of budgeting accrue to the whole organization if both the short and long term consequences of the budgets are considered (Otley, 1987). However, the annual budgeting process leads to the refinement of those plans, since managers must produce detailed plans for the implementation of the long range plans. Without the annual budgeting process, the pressures of day-to-day operating problems may tempt managers not to plan for future operations (Scott, 1987).

2.2.1.4

Planning Process:

The planning process ensures that managers do plan for future operations, and consider how conditions in the next year might change and what steps they should take to respond to these conditions. 23

Kimbrough and Nunnery, (1988) describing the procedures for school budget  preparation points out the following; that teachers should be asked to submit items to included in the estimates, that the lists of estimates by the different teachers and heads of departments be assembled, reviewed during a special meeting consisting of the school heads and the bursar. According to them, plans and estimates must reflect serious considerations when budgeting. This process sets out the various requirements of the agreed priority to ensure its feasibility. In particular, the plans should include considerations of cash resources available, and the cash needs and further ensure that any differences are covered by the available resources. This calls for a coherent plan including all parts and individuals of the organization.

Budgetary planning is therefore the key to success in business and budgeting forces planning to take place. Once not done properly the organization will not operate properly (Lucy, 1996). This process encourages managers to anticipate  problems before they arise, and hasty decisions that are made on spur of the moment, based on expediency rather than reasoned judgment (Murphy and Peek, 1980). An organizations plan and priorities should therefore be important drivers to the budgeting process.

The previous studies reviewed above, therefore lead to the conclusion that there is an increasing perception that budgets are less useful in today highly challenging  business environment. Consequently knowledge about budgeting practices is useful to provide insights into whether budgets are still appropriate planning and control tools. It’s the researcher’s intention to explore whether such a budgeting 24

 process and planning processes exist at BTVET’s institutions.

2.2.2

Monitoring and Control. 2.2.2.1

Monitoring:

Budgetary Monitoring and Control is a deterrent process against misappropriation of funds in terms of procedures and rules that establish the boundaries of financial  behaviour. According to Drury (2000), budgetary monitoring and control process is a systematic and continuous one which, is characterized by the following stages: Establishing targeted performance or level of activity for each department of the organization by way of setting targets to be achieved enhances the monitoring of the organizations performance. Communicating details of the budgetary policy to all the stakeholders for easy appreciation of the set targets and objectives enhances ownership of the results achieved at end of the day. Monitoring actual revenue or cost data this is done by way of continuous comparison of actual performance with the budgeted performance and regular reporting of variances to the responsible officers. This helps in asserting the reasons for the differences between actual and  budgeted performance and taking the suitable corrective action. The “bottom-top” approach of budgeting allows participation of all levels of management in the decision-making process. Negotiations then begin between the corporate office and department heads to finalize budgetary figures. The  budgetary process then shifts to a "tops-down" approach, where the corporate 25

office has ultimate control to set the final budget. Through this process of monitoring, analysis and control, the problem of "ratcheting" is generally avoided (Kelly, 2003). A budgetary monitoring and control process assumes that expenditure must agree with the budgeted plans and maintains information about expenditure. Financial control is also one of the most important aspects of budgeting. By means of  budgetary control, which means comparing actual results with planned results and reporting on the variations, a control frame is set for management.

This frame points to managers to track flow of resources accurately and consistently. This calls for continuous control process through the year, and not  just at the end of a budget period. The ob jectives of control are to plan the policy of an organization, to coordinate the activities of the organization so as to achieve the targets set. According to Briston (1981), financial control and monitoring ensures efficient and cost-effective program implementation within a system of accountability. He however, notes that the existing financial control arrangements must be complemented by further improvements in the overall program monitoring for better budget implementation in accordance with approved work  programmes. The above process demands comprehensive planning and approval framework, consistent with processes for constructing budgets, both Capital and Revenue. Sound methodologies for assessing the financial impact of proposed expenditures, compatibility with other management and performance data and a system of control that set clear responsibilities and gives accurate and timely monitoring 26

information on performance against budgets is important.

2.2.2.2

Control:

Control basically provides the ex-ante motivation to achieving the budget and the ex-post reinforcements necessary to ensure future motivation (Kerr, 1979). Hence the perception of variances as extremely important and valid measures of  performance is upheld. The evaluation of budget performance should be based on a comparison of actual performance with an adjusted budget to reflect the current circumstances of the environment under which managers are actually operating in. a budget therefore, assists mangers in monitoring and controlling the activities for which they are responsible. By comparing the actual results against the  budgeted amounts for different categories of expenses, managers can ascertain which costs don’t conform to the original plan requires their attention. This  process enables management to operate a system of management by exception, which means that a manager’s attention and effort can be concentrated on significant deviations from the expected results. Thus enabling managers to identify inefficiencies and appreciate control action thought to remedy the situation.

By means of budgetary control that is, comparing actual results with planned results and reporting on the variations, a control frame is set for management. It helps expenditure to be kept within the planned limits (Alesina and Perotti, 1996). Carr, (2000), argues that in order to achieve the expected output results, monitoring and evaluation is necessary. Monitoring and evaluation maintains 27

stability under many competing forces, hence important to lower local government effectiveness (Hokal and Shaw, 1999). However, Hokal and Shaw continue to note that monitoring and evaluation requires only raw data to test and examine performance which is time consuming yet contributes little to  performance. Hence, the need to establish the level of monitoring and control in realizing sound  budget management and performance at BTVET government owned tertiary institutions.

2.2.3

Analyzing, Feedback and Performance. 2.2.3.1

Budgetary Analysis:

Analysis is the process of examining variances by sub-dividing the total variance into smaller parts in such a way that management can assign responsibility for any off budget performance. An aspect of variance analysis is the need to separate controllable from uncontrollable variances. A detailed analysis of controllable variances will help the management to identify the persons responsible for its occurrence so that corrective action can be taken. Through variance analysis it is established whether over expenditure is caused by deliberate actions or inadequate controls by management (Arora, 1995). Its imperative that staff learns that their adverse variances are be analyzed, that unjustified expenditure will not pass without punishment. This will increase staff care as to the use of resources in performance of tasks and in so doing control costs and the associated variances.

28

According to Glautier, (1997) and Fang, (1998), a budget variance requires analysis, investigation and correction. The analysis of the budget variance necessitates splitting up the variance into two components of standard costs i.e. quality standard and the price standard.

The variances could be corrected through strict enforcement of use of the budget whenever expenditure is incurred. This is preventive control. This means that  previous over expenditure attributed to the use of resources without particular reference to the budget as a control tool, are eliminated. Items on which money is spent are budgeted for and any expenditure incurred is only after reference to the  budget (Mathis, 1996).

The primary function of evaluation-reward aspect of budgetary control is to  provide the ex-ante motivation to achieve the budget and the ex-post reinforcement necessary to ensure future motivation (Kerr, 1979). This is what makes variances to be perceived as extremely important and valid measures of  performance. Performance evaluation of budgets should be based on comparison of actual  performance with an adjusted budget to reflect the circumstances of the environment under which managers actually operate. A budget assists managers in managing and controlling the activities for which they are responsible by comparing the actual results against the budgeted amounts for different categories of expenses, managers can ascertain which costs do not conform to the original  plan and thus require their attention. 29

According to Kreitner (1989) corrective action is necessary when the final results deviate from plans. The gaps are addressed through punishment of those staff that spends more than the budget without good reason. In situations where gaps were not anticipated and they occurred, it is necessary to redraw the budget so as to have the objectives match the cost incurred and this is feedback control.

2.2.3.2

Feedback:

Feedback is an important role of budgeting for attaining the expected quality and standards in planning, control and leadership and staffing. According to Cook (1968), feedback is generally positively associated with budget performance. It focuses on the extent to which employees have achieved expected levels of work during a specified time period. The reports should be simple and suitable for the level of understanding for the user. They should be presented promptly to enable timely actions to take place. Reports should be accurate to enable the making of corrective decisions based on the reports. However, the extreme accuracy should not be at the cost of promptness. It has to be noted that the principle of exception should be utilized where possible.

Budgetary Control is not effective unless there is continuous flow of budget reports. These reports should be prepared at regular intervals (say monthly) to show comparison of actual performance with that budgeted. Such reports may be  presented to heads of budget centers, showing favorable or unfavorable variances from budget figures. These heads of budget centers should explain these variances 30

to the top management so that necessary corrective action may be taken (Arora, 1995; Foster, 1987).

According to Underdown (1997), a good budget system should be integrated with the standard cost system. Where standard costing system is used it should be integrated with the budget programme in both budget preparation and variance analysis. Unfavorable variances are mostly scrutinized which take the form of over expenditure or expenditure incurred on non-budgeted items.

2.3

Financial Performance.

Financial performance is a management initiative to upgrade the accuracy and timeliness of financial information. Areas of emphasis include reducing erroneous  payments and strengthening the management o f government held assets. Performance budgeting is an integrated annual performance plan and annual  budgeting that shows the relationship between program funding levels and expected results. It shows that a goal or set of goals should be achieved at a given level of spending. Performance budgeting identifies the relationships between money and results, as well as explaining how those relationships are created. A  program performance budget defines all activities, d irect and indirect required b y a program for support in addition to estimating activity costs (Kydland and Prescott, 1977).

Improving the performance of an organization is a central concern of management researchers, and speculation about the factors related to organizational 31

effectiveness is abundant in the literature and elsewhere. Unfortunately, little effort has been made to verify these factors empirically. One reason is that organizational performance is a difficult concept to define and measure. Stakeholders often disagree about which elements of performance are most important and some elements are difficult to measure because they are preventive in nature (Brewer, 1993).

Performance as a concept suffers from the problem of conceptual clarity in a number of ways. First in terms of definition, performance is often used indiscriminatingly to mean everything from efficiency to effectiveness (Stannack, 1996). Organizational performance has been defined as the measure of how well the organization does its job (Stoner, 1995). Pettigrew, 1992, says it is the extent to which an organization achieves its intended outcomes. Research on organizational performance reveals definition ranging from social performance or contribution to charity (Casio, 1998) to company profits (Huselid, 1995), and organizational effectiveness Zahra and Pearce, 1989). Inadequate definition has often led to problems in measurement and practitioners seem to use the term  performance to describe a range of measurements including input efficiency, output efficiency, and in some cases, transactions efficiency (Heffernan and Flood, 2000).

Performance as defined by McGill (2001), and Bestbreur and Henk (2003), is the agency outputs, with an agency’s program structure linking outputs to long-term objectives, which then creates a performance budget. This process helps to 32

annually track and report programme results and provide reasons for performance not meeting expectations (Thor et al., 1999).

2.3.1

Performance Measures:

Amaratunga et al; (2001) also described performance measurement as a process of assessing progress towards achieving pre-determined goals including information on the efficiency with which resources are transformed into goals and services, the quality of those outputs and outcomes, and the effectiveness of the organizational operations in terms of their specific contributions to organizational objectives.

Research made by several scholars has indicated that in this modern world where there is relentless technological change, changing customer tastes, demand and uncertainties in the market, on financial indicators have become essential for characterizing an organization future performance (Guthrie, 2001). Non financial measures reflect activities an organization performs in order to execute its strategy and as such serve as predictors of future smooth operations of an organization (Amaratunga, 2001). They are operational and provide managers, supervisors and operators with information required for daily decision making.

According to Cumby and Conrad, (2001), sustainable shareholder value is driven  by non-financial factors such as employee satisfaction, internal processes and organizational innovation. This study defines performance in respect to internal  business processes like new innovations, quality of service pro vided, expansion of 33

infrastructure and timely payments to suppliers and service providers.

Performance of any institution is often evaluated by measuring success in meeting the budgets. This view is shared by Buckley and McKenna (1995), who says that when the budget management is successful bonuses are awarded on the basis of an employee’s ability to achieve the targets specified in the periodic budgets, or  promotion may be partly dependent upon a succe ssful budget record.

Gonahasa (1994), noted that a proper college budget should show all activities the college intends to do in the coming year, such as purchase of instructional materials, payment of salaries and allowances for support and lecturing staff, suppliers, feeding of students, capital developing and income generating projects if any and this point to a budgeting paradigm, which is based on the establishment of financial performance measures. These measures act as a gauge of what the institution feels important, and how well it will reflect good financial  performance.

The development of a performance budget is a simultaneous top-down and  bottom-up process. Senior planners and policy officials must articulate program goals and objectives. They also must outline the levels of resources that they anticipate allocating to support those goals and objectives. These same officials should identify outcome measures that determine whether goals, objectives, resource levels and outcome measures must be developed and validated by lower level managers. 34

The above kind of planning transforms program activities and performance goals into budgetary (financial) terms. However, most tertiary institution plans do not exactly and clearly explain how funding would be allocated to achieve  performance goals, if at all they are set. It’s actually identifying the objective without identifying the means for achieving it. These identify as challenges to  performance budgeting among other related challenges to performance budgeting implementation such as: lack of credible and useful performance information within the institution, difficulty in achieving consensus on goals and measures  because of low levels of participation, hence d issimilarities between programs and fund reporting structures and the limitations of information and accounting systems.

ODI (2003) concurs with OPPAGA (2003), who asserts that the amount of resources given to public programs influences their performance in achieving desired results; that performance budgeting enhances service delivery and infrastructural development. Performance budgeting provides Managers with flexibility to utilize resources to achieve performance results. Long-term  perspectives characterize it; identification of the mission, goals and objectives; linking strategic planning information with the budget; development and integration of performance measures into the budget (Mwabilu, 2004). The study therefore shows how BTVET tertiary institutions evaluate their budgets in relation to the set objectives and goals in a bid to measure whether the limited resources have been spent effectively and efficiently. Hence, the potential of the 35

government tertiary institutions for improving their financial performance needs to be investigated.

2.4

Relationship between Budgetary Controls and Performance.

Budgetary control involves the preparation of a budget, recording of actual achievements, ascertaining and investigating the differences between actual and  budgeted performance and taking suitable remedial action so that budgeted  performance may be achieved (Coope r, 1996; Fang, 1996).

Budgetary control is the system of controlling costs through budgets. It involves comparison of actual performance with the budgeted with the view of ascertaining whether what was planned agrees with actual performance. If deviations occur reasons for the difference are ascertained and recommendation of remedial action to match actual performance with plans is done (Arora, 1995). The basic objectives of budgetary control are planning, coordination and control. It’s difficult to discuss one without mentioning the other (Arora, 1995).

A budget provides a detailed plan of action for an organization over a specified  period of time. By planning, problems are anticipated and solutions thought. This helps to reduce on costs and achievement of goals is enhanced (Mathis, 1989). By  budgeting, managers coordinate their efforts so that objectives of the organization harmonize with the objectives of its parts.

Control ensures that objectives as laid down in the budgets are achieved. 36

Management is able to know about this through information availed to it by subordinates (Millichamp, 1990; Middlemist, 1996).

Control ensures

that

objectives are being achieved. A comparison is therefore made between plans and actual performance, the difference between the two is reported to management for taking corrective action. This control process is not possible without planning (Lewis, 1996).

An effective control system helps accomplish the purpose for which it is designed. Effective control systems rely on good information, are well communicated, well coordinated, timely and economical to the organization (Arora, 1995; Mathis, 1996).

Budgets reflect estimates of future events, and what is considered acceptable  performance. Comparing actual with budgeted results provides meaningful information and indicates the need to analyze and investigate over and under spending. The action taken on over and under spending is one of the most important aspects of a budgetary control system. Budgetary Control aims to achieve four things: To define and evaluate short-term plans, this is seen in the process of developing a budget within the given structure of the organization. To identify responsibilities and delegate authority to Budget Managers for the achievement of those plans, Budgets are devolved as a means of empowering middle Managers because Managers can make the best use of resources and savings can be deployed for investment in other areas under their control. The 37

Managers cease to be bidders for resources and instead become a Manager of resources, which gives more opportunity to focus on outcomes, the students experience and achievement rather than struggle with senior Managers over resource allocation that many managers engage in. To allocate resources between various Budget Managers up to the limit imposed  by the available funds in order to control activities, unless the Institutions own resource allocation mechanisms parallel the devolution of responsibilities to teams explicit in Total Quality Management programs in reality that devolution will be little more than a cosmetic exercise. Real delegation of authority, which is the essence of empowerment, requires a real and effective control over resources (Sallis, 1996). To motivate Budget Managers, as a motivating tool, the freedom to take decisions and make mistakes may be empowering or it may be viewed as a control mechanism by which managers’ performance will be judged, apparently on impartial grounds. If rewards do not accompany the additional responsibility, Managers may feel that they are being taken advantage of within the structure. Once budgets have been agreed and established for each area of responsibility, the remaining two stages of budgetary control are: The continuous comparison of actual with budgeted results and Management action resulting from this comparison, either to secure adherence to the original  plan or to agree some modifications to it are the basic aims.

Inadequate budgetary controls lead to objectives not being clear and performance not being achieved or satisfactory. This reduces output because employees do not 38

know or are doubtful about what to do, when and how to do it. They spend a lot of time seeking clarifications from executives. Thus leading to delays in identification of deviations from plans, which lead to failure in goal achievement and hence poor performance (Phyrr, 1970)?

Performance of any institutions is often evaluated by measuring success in meeting the budget. When the budgetary control is successfully implemented, the organizations objectives will be realized and once this has been done the organization is said to have achieved at performance level (Turyakira, 2004). Resbery and Lormorie (1986), stated that in practice, many organizations compare actual performance with the original budget, but if the circumstances expected when the original budget was set differ, there will be a planning and control conflict.

Seldin (1981) argues that for the smooth implementation of an organizations  budget, budgetary planning p lanning and control must be properly done. Under budgetary control, evaluation which is a process by which an appraisal of performance is systematically conducted with a view to measure individual, department and organizational contribution should be done. It is conducted in order to take appropriate action. In particular, evaluation of budgetary control is a process of assessing performance against budget standards and performance targets with intent to take corrective action (Emmanuel and Otley, 1985). Budgetary standards and targets tend to be the criteria upon which the performance of organizational member, the superiors in particular are evaluated. These standards and targets 39

 provide a basis for identifying and appraising selected aspects of organizational  performance, since they are the criteria used to guide and motivate it.

Cyert and March (1963), stated that evaluation standards should be very fine statements derived from budgetary planning goals of the previous time period,  budgetary control experience with respect to budgetary goals of the previous years and from the experience of comparable performance aspects with respect to the past periods. Once this is done, budgetary control will be achieved and the organizations objectives will be properly implemented and hence efficiently achieved.

In the case of BTVET tertiary institutions, which are not profit making organizations, income is usually from the privately sponsored students being supplemented by government funds. In most cases the planned budget has higher sum to be the expenditure for the coming financial year than the actual sum of funds released. Government releases within a particular financial year are very minimal compared to the increased demands of the institutions. Thus the need for more infrastructure development in form of construction of more lecture halls, accommodation facilities, library facilities, dinning and recreational Halls, etc which increases the expenditure generally.

During the budget year, the budget committee should periodically evaluate the actual performance and re-examine the organizations future plans if there are any changes expected, this will normally mean that the budget plans should be 40

adjusted (Benlo, 1990). This revised budget then represents a revised statement of formal operating plans for the remaining portion of the budget period. The important point is that the budgetary process does not end for the current years once the budget period has started. Budgeting should be seen as a continuous and dynamic process. Budgetary Control properly applied can be immensely valuable to Managers of all levels. It is, however, not without dangers, unless skill and intelligence are exercised both in devising the budgets and implementing the  plans to achieve them, performance may not be realized as p lanned.

CHAPTER THREE: 3.0

Methodology.

This section focused on the research methods and the instruments used by the researcher to carry out the study. It provides a description of the research design, area of study, sample description, data collection and analysis methods. 41

3.1

Research Design.

A cross-sectional research design was used and was combined with descriptive research design and Correlation studies to establish the relationship between the independent variable (budgetary control) and the dependent variable (perceived  performance).

3.2

Population of the Study

The population of the study covered Government aided institutions under Business, Technical, Vocational and Educational Tertiary institutions that is 5 UCC’s, 3 AC’s, 34 TI’s, 29 TS’s and 40 HTI’s and considering Administrative staff and Lecturing staff. A total population size of 111 institutions under BTVET.

3.3

Sampling Design.

The Quota sampling and purposive designs were used to select 32 institutions from the four regions namely eastern, northern, western, and central from a  population of 111 BTVET institutions. The respondents included administrative and lecturing staffs that were selected using the judgmental and purposive methods because they were in the best position to give the required information. 3.4

Sample Size.

The sample size comprised of 32 BTVET institutions in Uganda. From these therefore, a total sample of 32 institutions was considered sufficient as per Roscoe’s 1975 rule of thumb that states that sample sizes of 30 and above are sufficient. 42

Table (2): Sample size determination. Category Total Population UCC’s 05 TI’s 34 TS’s 29 HTI’s 40 AC’s 03 Total 111 Source: Computation by the researcher.

3.5

Sample Size 5 10 8 8 1 32

Sources of Data. Primary Sources

The primary data was collected from the BTVET institutions by use of questionnaires. Secondary Data

This included review of official policy documents, journals, reports and seminar  papers.

3.6

Data Collection Instruments. Questionnaire

The researcher collected primary data using closed structured questionnaires. These questionnaires were self administered amongst the respondents in order to collect the completed responses within a short time possible. 3.7

Measurement of the Research Variables. 

Budgetary Control was measured by Budgeting and Planning, Monitoring and Control and Analyzing and Feedback which were subjected to a 5  point anchored likert scale for Mwabilu et al., 2004.



Perceived

financial

performance 43

was

measured

by

Infrastructure

Development, Service Delivery and expenditure related activities which were subjected to a modified version of multi-item five-likert scale developed by Melkers and Willoughby (2002) to suit the study at hand.

3.8

Reliability and Validity of Research Instruments.

The questionnaires were developed in harmony with the guidelines given by Sekaran (2000). An item analysis was done followed by a pre-test to check for validity and reliability. Validity was measured using face validity by the research Supervisors to give comments on the questions developed, which confirmed the dimensions of the concepts that have been operationally defined. Reliability of the instrument was tested using Cronbach’s coefficient Alpha (Cronbach, 1946) as shown by the table below: Table (3):

Reliability Coefficients

VARIABLE Budgeting and Planning Monitoring and Control Analyzing and Feedback Financial Performance Infrastructure Development Service delivery Expenditure related activities Source: Primary data.

CRONBACH ALPHA 0.9031 0.9269 0.7111 0.6742 0.7164 0.6344 0.6817

The Cronbach Coefficients were above 0.6 and therefore the scales used to measure the study variables were consistent and therefore reliable.

3.9

Data Processing and Analysis.

Data collected was compiled, sorted, edited, classified, coded and analyzed using a computerized Statistical package for social sciences known as SPSS 11.0. 44

Cross tabulations tables, chi-square tests were used to determine the budgetary controls and financial performance. Pearson correlation Coefficient was used to determine the degree of relationship between budgetary controls and perceived financial performance. Multiple regression analysis was used to predict the  perceived performance of BTVET institutions.

3.10

(i)

Limitations of the Study.

Research funds available to the researcher were limited to speed up the research process; however the researcher managed to spend within the limited resources.

(ii)

The research was basically on financial related matter; some respondents were not willing to give the required information calling it ‘classified’, however with an introduction letter from the Director Graduate research Center and assurances that data will be held confidentially 122 responded.

CHAPTER FOUR: 4.0

DATA PRESENTATION, ANALYSIS AND INTERPRETATION.

4.1

Introduction.

This chapter deals with Presentation, Analysis and Interpretation of data collected regarding demographic factors in respect of sex, age, level of education and 45

 period worked with the organization. Secondly, it presents cross tabulations, factor analysis and chi-square tests to establish budgetary controls measured by  budgeting and planning, monitoring and control and analyzing and feedback. Thirdly, it presents factor analysis and chi-square tests to establish perceived financial performance in BTVET institutions measured by infrastructural development, service delivery and expenditure related activities. Fourthly correlation matrix and multiple regression coefficients, were used to measure the relationship between the study variables namely, budgetary controls and  perceived financial performance.

4.2

Demographic Statistics.

The demographic factors such as the Sex, Age, Level of education and Period worked with Organization at individual level were analyzed using cross tabulations as shown in the tables 4.1 – 4.4 below.

Table (4.1):

Case Processing Summary.

Level of Education * Sex Level of Education * Age Level of Education * Period worked with organization Source: Primary data.

Valid  N Percent 122 100 122 100

Cases Missing N Percent 0 .0 0 .0

Total N Percent 122 100 122 100

122

0

122

46

100

.0

100

4.2.1

Level of Education by Sex Table (4.2):

Level of Education

Level of education by Sex

Certificate

Diploma

Degree

Masters and Above

Total

Source:

Count % within Level of Education % within Sex % of Total Count % within Level of Education % within Sex % of Total Count % within Level of Education % within Sex % of Total Count % within Level of Education % within Sex % of Total Count % within Level of Education % within Sex % of Total X 2 = 17.143

Male 7

Sex Female 7

Total 14

50.5 8.3 5.7 27

50.5 18.4 5.7 7

100 11.5 11.5 34

79.4 32.1 22.1 44

20.6 18.4 5.7 12

100 27.9 27.9 56

78.6 52.4 36.1 6

21.4 31.6 9.8 12

100 45.9 45.9 18

33.3 7.1 4.9 84

66.7 31.6 9.8 38

100 14.8 14.8 122

68.9 100 68.9 df = 3

31.1 100 100 100 31.1 100 Sig. = .001

Primary data.

In the table 4.2 above 69% of the respondents were male employees of at the BTVET institutions while 31% were female employees, 52% of the male have first degree and second degrees, while 31% of the women both having first and second degrees. There is therefore a relationship between the level of education and sex of the respondents (Chi-Square = 17.143, df = 3, P-Value = 0.001).

4.2.2

Level of Education by Age Table (4.3):

Level of Education by Age Age 20-39 Years 40-49 Years & above

47

Total

Level of Education

Certificate

Diploma

Degree

Masters and Above

Total

Source:

Count % within Level of Education % within Age % of Total Count % within Level of Education % within Age % of Total Count % within Level of Education % within Age % of Total Count % within Level of Education % within Age % of Total Count % within Level of Education % within Age % of Total X = 59.071

14

0

14

100 64.6 11.4 28

0 0 0 6

100 11.5 11.5 34

82.4 43.1 23 24

17.6 20 4.9 32

100 27.9 27.9 56

42.8 73.9 19.7 12

57.1 160 26.3 6

100 45.9 45.9 18

66.7 18.5 9.9 78

33.3 20 4.9 44

100 14.8 14.8 122

64 100 64

36.1 100 36.1 Sig. = .000

100 100 100

df = 9

Primary data

In the table 4.3 above 64.0% of the respondents were in the age bracket of 2039years and 36.1% were in the age bracket of 40-49 years and above. The older the staff in terms of age the greater the opportunity for one to continue with further studies. 57% of the respondents who were aged 40 years and above had first degrees, while 42% of the respondents aged between 20 and 39 years had first degrees. Therefore, there is a relationship between the level of education and the age (Chi-Square = 59.071, df = 9, P-Value = 0.000). 4.2.3

Level of Education by Period worked with organization Table (4.4)

Level of Education

Level of Education by Period worked with organization.

Certificate

Count % within Level of Education % within period worked with organization

48

Period worked with organization 1-6 Years 7 Years & above 14 0

Total 14

100

0

100

47.1

0

11.5

% of Total Diploma

Total

Source:

Count % within Level of Education % within period worked with organization % of Total Degree Count % within Level of Education % within period worked with organization % of Total Masters and Above Count % within Level of Education % within period worked with organization % of Total Count % within Level of Education % within period worked with organization % of Total X = 73.173

11.4 25

0 9

11.5 34

73.5

26.5

100

64.1 20.5 24

15.3 7.4 32

27.9 27.9 56

42.9

57.1

100

88.7 19.6 0

54.2 26.2 18

45.9 45.9 18

0

100

100

0 0 63

30.5 14.8 59

14.8 14.8 122

51.7

48.4

100

100 51.7

100 48.4 df = 6

100 100 Sig. = .000

Primary data.

The tables 4.4 above 48.4% of the respondents have worked with their organizations for a period of seven years and more 14.8% have masters and above, 26.2% have first degrees and 7.4% have Diplomas. 51.7% of the respondents who have worked with the organization for a period between one and six years, 11.4% have Certificates, 20.5% have Diplomas and 19.6% have first degrees. The more years one spends in an institution, the more chances one has to continue with studies as shown above. Therefore, there is a relationship between the level of education and the period worked with organization (Chi-Square = 73.173, df = 6, P-Value = 0.000). 4.3

Budgetary Controls.

This section presents findings on research question one, which is aimed at examining the budgetary controls at BTVET institutions. Perceptions were 49

obtained in terms of Budgeting and Planning, monitoring and control, analyzing and feedback. Factor analysis was performed using principle component and Varimax rotation methods to extract components of factors that measured the study variables. Table: (4.5) Rotated Component Matrix Showing Budgetary Controls Components. Components   g   g   k   g   l   g   i   n   c   n   o   a    i    i   n   n   r   r    i   z   b   n    t    t   o   y   d    3    1   e   n    2   n    t    l    i   o   g   a   a   e   e   n   C    d   l   n   F    P   o   u    A    B   &    M    &    &

Programmes and plans are the basis for allocating financial resources We have clear result targets in the budget Budget outcome goals and ob jectives are linked to programmes Management discusses with staff goals to be met The budget structure facilitates a clear linkage b etween the money and the results We normally identify high priority programmes to include in the budget We describe the tasks to be carried out in the budget The resources are released on time to carry out the activities Decisions made here are based on plans and programmes in the budget Planning helps us to know the type and level of resources to p rovide All programmes are classified according to the ob jectives Programme activities are clearly indicated The basis for re-allocating resources in your institution is the performance indicators Budgets are always used as a standard of measuring financial performance Planning helps to manage the p rogrammes of the institution Performance indictors are normally included in the b udgets of our institution We normally formulate our objectives from the set goa ls Budgets take into account the three year development plan Our budgets are for more than one year We start with planning for our p rogrammes We frequently use resources to achieve results We design appropriate p rogrammes to accommodate short-term objectives My institution always follows budget procedures We combine planning with the budg eting process The finance committee of the Governing Council scrutinizes budget proposals Programmes and plans are the basis for getting financial resources Each budget activity is allocated app ropriate resources The budget facilitates the estimation of future cost implications Our budgets emphasize outcomes We always present the budget to the governing council/BOG for approval Our budgets are based on the needs identified b y our sections/departments Programmes are analyzed before selecting the different resources Priorities for the coming year are set at workshop sessions/budget conference

50

.897 .863 .859 .850 .832 .832 .830 .826 .824 .810 .808 .806 .803 .800 .792 .785 .770 .767 .767 .764 .754 .737 .734 .732 .720 .715 .708 .676 .672 .660 .642 .625 .577

In involved in the budget setting process All the stakeholders to the b udget are involved We normally publish the budget after app roval Our programmes are in line with the budget objectives The budget activities are controlled by use of a vote book in my institution Budget review is done in my institution There is clear reporting of programmes results The perceived level of budg et monitoring and control in my institution is adequ ate The perceived level of budg et monitoring and control in my institution is excellent Budget adjustments are done in m y institution as need arises Continuous comparison of actual with budgeted performance is done in my institution Reasons for differences between actual and budgeted per formance are always given The budget performance reports are prepared monthly in my institution The governing council/BOG normally checks on the progress as p lanned All our expenditures are paid after app roval The top management always hold bu dget conferences to review performance Performance targets for each department are agreed on The favorable and unfavorable variances are frequently reported The budgeting process is expedited by use of budget centers Control of the budget activities is done by only the Principals office

.542 .524 .513 .423 .333 .770 .763 .754 .734 .716 .692 .669 .664 .659 .646 .646 .645 .583 .490 .460 .459

The implementation of the budget activities is the responsibility of the department manages

Financial performance is communicated frequently in meetings The heads of budget centers always explain variances to top management The budget reports are alwa ys presented to the heads of bu dget centers Follow up of unfavorable variances is done in my institution The management agrees on priorities in the b udget conference

.863 .840 .809 .791 .759 .757 .685 .677 .646 .641 .556 .547 .509

Management always takes timely corrective actions when adverse variances are reported

Requisitions raised b y the staff are honored There is clear tracking of pr ogramme results in my institution Deviations from the expected and the actual results are common The favorable and unfavorable variances are reported to budget committee/top management

Funding of budget programmes is based on approved budget The budget deviations are monitored b y the top management The line managers are always involved in the budgeting process

Eigenvalues Percentage of variance Cumulative Percentage variance Source: Primary data.

23.894

11.281

5.440

35.072

16.590

8.000

35.072

51.662

59.663

The table 4.5 above indicates that, only components with Eigenvalue greater than 1 were extracted. Items or questions with correlation coefficients above (positive or negative 0.3) were considered indicating that the elements of budgetary control include the following; Budgeting and Planning with percentage Variance of 35.072, Monitoring and Control with Percentage Variance of 16.590 and Analyzing and Feedback with percentage variance of 8.000 giving a cumulative 51

Percentage Variance of 59.7%. This indicates that the budgetary controls in BTVET institutions are Budgeting and Planning, Monitoring and Control and Analyzing and Feedback.

4.4

Perceived Financial Performance

This section presents findings on research question two, which aimed at establishing the perceived financial performance of BTVET institutions. Perceptions on Perceived level of financial performance were obtained from three components that is Infrastructure Development, Service Delivery and Expenditure related activities as shown below. Table (4.6):

Rotated Component Matrix for Perceived Financial Performance. Component   e   r    t   e   u   n   r   e    t   u   s   c   m    t    i   u   y   e    1   t   r   p    2    3   e    d    i   r    t   o   c   e   n   s    i    l    i   e   v   a   e   v   v    i   r   v   p   i   r    f   x   t   e   l   e   e   c   n    I    d    S   d    E   a

Our expenditure on infrastructure development against total expenditure is adequate

The staff receive their salaries and allowances on time The Funds for food and its preparation is always released on time We always achieve our targets within the budgeted period We are always paid top-up in addition to the basic monthly salary Our suppliers are always paid on time Our Expenditure on students food and its preparation are genuine The disbursement of finances is immediate upon requisition The funds budgeted for are always released on time Funds for items budgeted for the last 3 years have all been received We receive all the tuition fees as budgeted for Our expenditure on games and sports is adequate The grants were received regularly The grants are received in full as per the budget We have adequately taken care of capital expenditure in our budget The institutions requirements are financed immediately the need arises There are income generating projects undertaken by my institution

.804 .789 .784 .740 .698 .670 .636 .627 .856 .823 .750 .687 .654 .627 .565 .478 .805

All the budgeted activities are implemented as planned for Our expenditure on instructional materials is adequate The expenditure on infrastructure development in my institution is adequate

.760 .719 .701

Our expenditure on ICT meets the demands of the changing environment

.653

52

The expenditures incurred in my institution are as per our plan The expenditure on students welfare is adequate every semester Our budget expenditure on maintenance and repairs is adequate

.538 .470 .318

Eigenvalue Percentage of variance Cumulative Percentage of variance

Source:

9.872

2.688

2.191

41.133

11.201

9.125

41.133

52.334

61.459

Primary data.

Factor analysis was used to determine the level of perceived financial  performance using the components of financial performance as shown in the rotated matrix table (4.6) above. Results indicate that 3 components namely Infrastructure development, Service delivery and Expenditure related activities explained 61.5% of perceived financial performance. Therefore at 95% confidence level one can confirm that the level of perceived financial  performance at BTVET institutions was 61.5% above average.

4.5

Correlation Analysis.

Pearson’s correlation coefficient matrix was used to show the relationship  between budgetary control and perceived financial performance as indicated in the table 4.7 below.

Table (4.7):

Correlation Matrix

&

1 1.000

2

Budgeting  planning (1) Monitoring Control (2)

&

.616**

1.000

Analyzing feedback

&

.371**

.703**

3

1.000

53

4

5

6

7

8

(3) Budgetary Control (4) Infrastructure Development (5) Service Delivery (6) Expenditure related activities (7) Financial Performance (8)

Source:

.752**

.874**

.691**

1.000

.204*

.612**

.658**

.525**

1.000

.134

.394**

.423**

.209*

.743**

1.000

.199*

.591**

.536**

.483**

.886**

.698**

1.000

.295**

.580**

.893**

.519**

.880**

.861**

.803**

1.000

Primary data.

** Correlation is Significant at the .01 level (2-tailed) * Correlation is significant at the .05 level (2-tailed)

There was a significant positive relationship between Budgetary Control and  perceived financial performance (r = 0.519**, P-Value<0.01). This implied that Budgetary Control positively and moderately influenced perceived financial  performance at BTVET institutions. Budgeting and Planning, Monitoring and Control and Analyzing and Feedback as measures of Budgetary control significantly and positively affected the financial performance and its components of BTVET institutions (r = 0.295**, 0.580**, 0.593**, P-Value < 0.01) respectively. 4.5.1

Multiple Regression Coefficients

Multiple regression coefficients were used to predict the proportions of the variance in the perceived financial performance in BTVET institutions explained  by budgetary controls components as shown by the results presented in the table (4.8) below. Table (4.8):

Multiple Regression Coefficients.

54

Standardized

Model

R

coefficients Beta

(Constant)

P

ted t

Sig.

0.984

.327

Analyzing& Feedback

0 .432

4.569

.000

Monitoring & Control

0 .386

3.662

.000

Budgeting & Planning

0.176

2.334

.021

Source:

Adjus F

2

R  0.510

0.497

40.883

0.000

Primary data.

In the table 4.8 above, Analyzing and Feedback, Monitoring and Control and Budgeting and Planning were linearly correlated to Perceived Financial Performance (F = 40.833 and Sig. = 0.000). Showing that, 49.7% of Perceived Financial Performance was explained by Monitoring and Control, Analyzing and Feedback and Budgeting and Planning. Analyzing and Feedback contributed more (Beta = 0.432), Monitoring and Control (Beta = 0.386) and Budgeting and Planning (Beta = 0.176). The Standardized Regression Model is expressed as y = αx1 + βx2 + γx3 +…, therefore the standardized regression model for the study is y = 0.432af + 0.386mc – 0.176bp. Where AF = Analyzing and Feedback, MC = Monitoring and Control and BP = Budgeting and Planning as shown above. CHAPTER FIVE: 5.0

DISCUSSION OF RESULTS/FINDINGS.

5.1

Introduction.

This chapter set out to study budgetary controls and perceived financial  performance in BTVET institutions. In this chapter results presented and interpreted in chapter four are discussed. Part one of this chapter deals with 55

discussion of study objectives,

5.2

Budgetary Controls Components

For proper budgetary control to be done, Programmes and plans should be the  basis for allocation of financial resources. Also clear result targets should be set indicating budget outcome goals and objectives being linked to programmes. Building of consensus is useful by way of discussing the goals to be met with all stakeholders since decisions reached here will be based on plans and programmes in the budget. This also goes along way to help identify the type and level of resources to provide in order to achieve the set objectives and goals. According to the results presented, there were significant negative perceptions among the staff regarding budgeting and planning in BTVET institutions a signal that budgeting and planning has not taken root in BTVET institutions. Planning as part of the  budgeting system involves long range planning, strategic planning and short term  planning. Proponents of budgeting however argue that budgets help to allocate resources, coordinate operations and provide a means for performance measurement. Hilton et al, (2000), agrees with this view that budgeting is the most widely used technique for planning and control purposes. Secondly, budget monitoring in terms of budget reviews is important as it paves way for budget adjustments. It also permits continuous assessment of budget variances in terms of actual against the budgeted so that reasons for differences  between actual and budgeted performance are always given in a budget conference. Similarly, results on monitoring and control established significant negative perceptions among staff with a majority not sure of monitoring and 56

control being implemented in BTVET institutions. The agreement of budget  priorities is not done in bud get conference and neither are budget reviews which are useful in determining the budget variances done. According to Briston (1981), financial control and monitoring helps to ensure efficient and cost-effective  program implementation within a system of accountability, coupled with constant  program implementation for better budget implementation in accordance with agreed plans.

Thirdly, it’s important for the financial performance to be communicated to the stakeholders by the budget managers. This forms the basis of identification of variances or deviations of actual from budgeted so that corrective action can be undertaken. Equally the results on analyzing and feedback divulge significant negative responses among staff on the implementation of analyzing and feedback. A majority of staff had perceptions that analyzing and feedback was not done in BTVET institutions. Most issues regarding financial performance were not always discussed with other staff in meetings. The monthly financial reports where  budget variances would be reported and corrective action taken were lacking in most BTVET institutions. These points to general lack of information regarding the financial performance of the institutions since there were monthly reports drawn and discussed.

Feedback is an important aspect in budgeting that attains

quality and standards in planning, control and leadership. Cook (1968) agrees that feedback is generally positively associated with budget performance by focusing on employees achieved expected levels of work during a given period.

57

5.3

Perceived Financial Performance

There was low level of financial performance though above average in BTVET institutions as established by the results on perceived financial performance where there were significant negative perceptions among the staff, with a majority having negative perceptions about the financial performance. Given that most of the grants were always received, respondents doubted the expenditure of capital and revenue nature whereby most of the developments seemed blurred. The level of service delivery is low since most of the requirements are not taken care of in the budget as a result also infrastructural development is not taking root.

According to Gonahasa (1994), a proper college budget should show all the activities intended for the coming year, thus pointing to a budgeting paradigm, which is based on the establishment of financial performance measures which measures act as a gauge to most important issues in the situation and how well it will reflect good financial performance. However, most tertiary institutions plans don’t exactly and clearly show how funding would be appropriated to achieve performance goals. It’s actually identifying the objectives without identifying the means for achieving it. The BTVET institutions are faced with challenges to performance budgeting implementation among which, lack of credible and useful performance information, difficulty in achieving consensus on goals and measures because of low levels of participation are the major drawbacks.

OPPAGA (2003), on the other hand asserts that the amount of resources given to 58

 public programs influence their performance in achieving

results; that

 performance budgeting actually enhances service delivery and infrastructural development.

5.4

Relationship

between

Budgetary

Control

and

Perceived

Financial

Performance.

The findings show a significant positive relationship between budgetary controls and perceived financial performance in BTVET institutions. All the three components of budgetary controls; budgeting and planning, monitoring and control, and analyzing and feedback significantly and positively affected the financial performance and its components of BTVET institutions.

Inadequate budgetary controls lead to objectives being unclear and performance not satisfactorily achieved. This reduces output because employees/staff do not know or are doubtful about what to do, when and how to do it. Thus leading to delays in identification of deviations from plans, which lead to failure in goal achievement and hence poor performance Phyrr, (1970).

Seldin (1981) argues that for smooth implementation of budgets, budgetary  planning and control must be done properly. Evaluation of budgetary con trols acts as a process of assessing performance against budget standards and performance targets with the intent to take corrective action as stated by Emmanuel and Otley, (1985).

59

CHAPTER SIX:

6.0

CONCLUSIONS AND RECOMMENDATIONS

6.1

Introduction

This section deals with the conclusions, recommendations and areas for further 60

research about the study.

6.2

Conclusions

In general, this study has examined the budgetary controls and perceived financial  performance of BTVET institutions in Uganda. The relationship between  budgetary controls and the perceived financial performance is clear especially when one considers the implementation of its components by the staff in BTVET institutions. The implementation of budgeting and planning, monitoring and control, analyzing and feedback will affect the perceived financial performance in terms of infrastructure development, service delivery and expenditure related activities in the BTVET institutions.

According to the results presented, there were significant negative perceptions among the staff regarding budgeting and planning in BTVET institutions a signal that budgeting and planning has not taken root in BTVET institutions. Similarly, results on monitoring and control established significant negative perceptions among staff with a majority not sure of monitoring and control being implemented in BTVET institutions. Equally the results on analyzing and feedback divulge significant negative responses among staff on the implementation of analyzing and feedback. The findings indicate that budgeting and planning, monitoring and control, analyzing and feedback as components of budgetary controls were significant predictors of  perceived financial performance in BTVET institutions.

61

Likewise there was a low level of Financial Performance in BTVET Institutions as established by the results on general perceived financial performance where there were significant negative perceptions among the staff, with a majority having negative perceptions about the financial performance. All the three components of budgetary controls; budgeting and planning, monitoring and control, and analyzing and feedback significantly and positively affected the financial performance of BTVET institutions.

6.3

Recommendations

This section, deals with policy implications promoting Budgetary Controls among the staff in Tertiary Institutions through continued partnering with Ministry of Education and Sports and Ministry of Finance, Planning and Economic Development.

There is need for the creation of Budgetary Controls knowledge within the curriculum of Tertiary Education system to enhance perceptions on the implementation of Budgetary Controls which is at stake in BTVET institutions.

There is need for sensitization drive through training, workshops, seminars and meetings on the values of implementation of Budgeting and Planning, Monitoring and Control and Analyzing and Feedback. The Ministry of Education and Sports and Ministry of Finance, Planning and Economic development officials should focus attention on important points in the implementation process of the Budgetary Controls and adequately monitor the 62

BTVET Institutions Financial Performance in terms of Budget formulation and implementation.

The Ministry of Education and Sports should provide the BTVET Institutions with the guidelines for the setting of goals, objectives, programs designs and formulation of performance measures.

The use of a Vote book must be taken up for purposes of Monitoring and Control Financial Performance in the BTVET Institutions.

The BTVET Institutions need to adopt the bottom – top approach to allow effective participation by all levels of management in the decision making  processes, which requires comprehensive planning and approval framework consistent with processes for Budget construction.

The Performance reports should be made quarterly to enhance feedback which is useful for disseminating Financial Performance information within the BTVET Institutions. 6.4

Areas for future Research.

The results of this study point to numerous opportunities for future research into the budgetary controls and the perceived financial performance. (i)

The future research should attempt to investigate other factors other than  budgetary controls components that affect the perceived financial  performance in BTVET Institutions. 63

(ii)

There should also be an attempt to gather data from other sections of the Educational system like primary and secondary other than BTVET Institutions.

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Scarborough et al., (1991), “Japanese Management Accounting Practices and the Effects of Assembly and Process Automation,”  Management Accounting Research , Volume 2, PP. 27-46. Scott, W.R. (1987). Information Processing: Creating Organizations. Sebbi, (1994) and Lewis, (1996). “Budget Performance in Ugandans Local Authorities: A Case Study of Rakai District Administration. 1988-93. a Dissertation presented to UMI in partial Fulfillment for the Award of the Diploma in Financial Management of UMI”. Sekaran Uma. (2000). Research Methods for Business . (3rd edition). Hermitage Publishing Services, Printed and bound by Malloy Lithographic Inc, United States of America. Selznick, P. (1988). Foundations of the Theory of Organizations , American Sociology th  Review, 13  February, 25-35.

Social Services Committee Report to Parliament (2003). Stannack, P. (1996). Strategic Control and Performance Measurement, Journal of Cost Management, 33-42. Stewart, T.A. (1990). “Why Budgets are bad for Business” Fortune , No.4, June, PP. 17990. Stoner, J.A. (1996). Management: New York, Prentice Hall. Stoner, J.A. (1995). Management : New York, Prentice Hall. The University and other Tertiary Act (2001). Articles 80-90. Zimmerman, (2003).  Accounting for Decision Making and Control . (4th ed.). McGrawHill, New York, NY.

69

Appendix (I)

12.0

TIME FRAME OF THE STUDY Table (5):

Study Time Frame

ACTIVITY Writing and presenting Proposal Designing data collection instruments Testing of the instruments

70

DURATION (WEEKS) 12 4 3

Data collection Data Analysis Data interpretation and Presentation Report Writing Submission of Final Report TOTAL Source: Self designed.

4 3 2 3 1 32

Appendix (ii)

13.0

PROPOSED BUDGET OF THE STUDY Table (6):

Budget of Study Estimates.

ITEM Stationery and Printing Research Assistants Secretarial Photocopying Binding Transport Miscellaneous TOTAL Source: Self designed.

ESTIMATED COST (UGX) 600,000 500,000 300,000 100,000 70,000 1,000,000 500,000 3,070,000

Appendix (iii)

MAKERERE UNIVERSITY BUSINESS SCHOOL MASTER OF BUSINESS ADMINISTRATION QUESTIONNAIRE TO BE FILLED BY THE ADMINISTRATOR’S, BURSAR’S AND LECTURING STAFF OF BUSINESS, TECHNICAL AND VOCATIONAL EDUCATION TRAINING INSTITUTIONS (BTVET)

71

Dear respondent, I am conducting a study on Budgetary Controls and Perceived Financial performance of tertiary institutions under (BTVET) as part of my study at

Makerere University. As one of the staff of BTVET institutions, your opinions are very important to this study. The information provided will only be used for academic purpose, and will be treated with utmost confidentiality.

Thank you in advance.

PART A: DEMOGRAPHIC CHARACTERISTICS (Please tick in the appropriate box provided).

1

Category of staff: Administrator Bursar Lecturer/Teacher/ Tutor

2.

Sex of respondent: Male

3.

Age of respondent: 20-29 years

Female

30-39 years

40-49 years

above 49

years 4.

What is your level of education? ‘O’ Level

‘A’ Level

Diploma

Ist Degree

Other, (please specify)……………………………………………………… 5.

For how long have you worked with the institution? 1-3 years

4-6 years

7 years and above

PART B: BUDGETING AND PLANNING.

Please respond to the following statements by indicating the extent to which you agree or disagree with the activities.

72

 

Statement

   )    1    (   e   e   r   g   a   s    i    D   y    l   g   n   o   r    t    S

1. 2. 3. 4. 5. 6. 7. 8. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

My institution always prepares budgets I’m involved in the b udget setting process We are sensitized on the budget process Performance indicators are normally included in the budgets o f our institution We do understand the p erformance indicators set Resource re-allocation is based on the performance indicators All the stakeholders to the budget are involved Budgets take into account the three year development plan Our budgets emphasize outcomes The line managers are always involved in the budgeting process We always present the budget to the Governing Council/BOG for approval The finance committee of the Council/BOG is knowledgeable on budgeting We normally publish the budget after app roval Budgets are always used as a standard of measuring financial performance Our budgets are based on the needs identified by our sections/departments Our programmes are in line with the budget objectives Our budgets are for more than one year The budget facilitates the estimation of future cost implications We have clear result targets in the budget Each budget activity is allocated appr opriate resources When budgeting, outcome goals and ob jectives are linked to programmes The budget structure facilitates a clear linkage between the money and the results We start with Planning for our pr ogrammes Planning helps to manage the pr ogrammes of the institution We discuss goals to be met with the management We combine Planning with the Budgeting process Programme activities are clearly indicated Programmes and plan are the b asis for allocating financial resources Programmes and plans are the basis for getting financial resources Planning helps us to know the type and level o f resources to provide Decisions made here are based on plans and programmes in the budget We set priorities for the coming year at budget conference We normally identify high-priority programmes to include in the b udget Programmes are analyzed before selecting the different options All programmes are classified according to the objectives We design appropriate pr ogrammes to accommodate short-term objectives Planning of the budget activities is done b y the departments

73

   )

   2    (

  e   e   r   g   a   s    i    D

   )    3    (

  e   r   u   s    t   o    N

   )    4    (

  e   e   r   g    A

   )    5    (   e   e   r   g    A   y    l   g   n   o   r    t    S

38 39 40

The budget priorities are agreed upon in the budget con ference Budgeting is done for a period ranging from four and ten years We normally formulate our objectives from the set goals

PART C: MONITORING AND CONTROL. Please respond to the following statements by indicating the extent to which you agree or disagree with the activities. Statement

1. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

   )    1    (   e   e   r   g   a   s    i    D   y    l   g   n   o   r    t    S

   )    2    (

  e   e   r   g   a   s    i    D

We often receive guidelines from the Ministry of finance on the budget process Funding of budget programmes is based on institutions approved budget The Governing council/BOG normally checks on the progress as planned The budget performance is always communicated The perceived level of budget monitoring and control in my institution is excellent The perceived level of budget monitoring and control in my institution is adequate The perceived level of budget monitoring and control in my institution is inadequate We always make adjustments regarding budget performance We normally monitor the deviations There is clear tracking of programme results in my institution We often monitor the budget deviations Control of the budget activities is done by only the head of department We use vote books to ensure adherence to the budgeted activities The implementation of the budget activities is the responsibility of the department managers The budgeting process is expedited by use of budget centers We often hold budget conferences to review performance The costed activities are always reviewed by the executive committee

PART C: ANALYZING AND FEEDBACK. Please respond to the following statements by indicating the extent to which you agree or disagree with the activities.

74

   )    3    (

  e   r   u    S    t   o    N

   )    4    (

   )    5    (

  e   e   r   g    A

  e   e   r   g    A   y    l   g   n   o   r    t    S

 

Statement

   )    1    (   e   e   r   g   a   s    i    D   y    l   g   n   o   r    t    S

1 2 3 4 5 6 7 8 9 10

   )    2    (

  e   e   r   g   a   s    i    D

   )    3    (

  e   r   u    S    t   o    N

   )    4    (

   )    5    (

  e   e   r   g    A

  e   e   r   g    A   y    l   g   n   o   r    t    S

The budget performance reports are prepared regularly in my institution The budget deviations are reported to budget committee/top management The deviations from the budget targets are frequently reported Management always takes timely corrective actions when adverse variances are reported There is clear reporting of programme results Follow up of deviations is not done in my institution Financial performance is communicated frequently in meetings Deviations from the expected and the actual /reported results are common Our budgets are always balanced Analysis of deviations is not necessary in my institution

PART D: FINANCIAL PERFORMANCE.

Please respond to the following statements by indicating the extent to which you agree or disagree with the activities. Statement    )    1    (   e   e   r   g   a   s    i    d   y    l   g   n   o   r    t    S

1 2 3 4 5 6 7 8 9 10 11 12 13 14

We achieve most of our budgeted plans in my institution We fulfilled our plans to accommodate our students We have sufficient library facilities at the college We have adequate power supply in my institution We have sufficient furniture in our lecture halls, recreational and residential halls The service provision in my institution is adequate All the budgeted activities are implemented as planned and budgeted for We have enough Lecture rooms to cater for our needs We do paint and repair our buildings frequently We met our previous years budget targets We have enough office equipment in our departments We spend in accordance to the planned activities We purchased relevant academic materials for students and lecturers/tutors In my institution the number of students passing is high each academic year

75

   )    2    (

  e   e   r   g   a   s    i    D

   )    )    )    3    5    (    4    (    (

  e   r   u    S    t   o    N

  e   e   r   g    A

  e   e   r   g    A   y    l   g   n   o   r    t    S