Budget and budgetary control practices of some selected credit unions within the Ashanti chapter

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Date
SEPTEMBER, 2015
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Abstract
According to Elliott (1986), Credit Unions essentially reverse the normal corporate financial objective of maximizing profit since they are expected to pay so much on savings and charge so little on loans. Therefore for Credit Unions to achieve a high level of organizational performance there should be effective and efficient use of resources. Budget and budgetary controls has been emphasized as a viable tool for ensuring effective and efficient use of organizational resource. The problem that normally arises is whether the budget and budgetary control practices of the Credit Unions comply with the best practices of budgeting. This study is a multiple case study, exploratory and descriptive research. The instrument used in gathering the data for this study is an interview guide. After data collection, analysis and processing was done by the use of computer programmes such as Microsoft Word and Excel. The research reveals that, the 60% of the Credit Unions have strategic plans which makes them more proactive than reactive in dealing with issues, ensures effective allocation of resources and inspires the budget. Also, annual budget was common to all the Unions and the bottom-up approach to budgeting was mostly used. Incremental budgeting was mostly prepared by the selected Unions, and budget committees as well as budget manuals were almost non-existent. Comparing budget figures with actual, and conducting variance analysis were the two most carried out monitoring and control activities. The selected Credit Unions comply fairly with the best standards in budget and budgetary control. The major challenges faced by the Unions were poor forecasting, time consuming, inability to achieve targets, difficulty in determining the cause of variance and identifying who to reward and who to punish. The Credit Unions should do more in motivating their management to produce budgets that are credible and challenging, educating the staff on the purpose of budgets, engaging dedicated budget specialist as well as tying people to specific budget target.
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A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Accounting Option)
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