Role Of Budget And Budgetary Control System on the Effectiveness of Public Enterprise: The Case of Ethiopian Electric Utility
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Date
2024-01-29
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AAU
Abstract
This study focuses on the role of budget and budgetary control systems in the effectiveness of
public enterprises, using the case of EEU. The study surveyed 110 experts from the Finance,
procurement, Audit & planning department of EEU, using a census survey method. A mixed
approach method was used, with primary data collected through questionnaires and
interviews, and secondary data obtained through document analysis. The quantitative data
was analyzed using SPSS-version 26, using descriptive statistics. The study found that
budgeting and budgetary control systems play a vital role in aligning operational plans,
resource allocation, risk identification, and progress tracking with the strategic plan. These
systems also have positive effects on responsibility alignment, accountability, transparency,
individual empowerment, and performance management within the organization. The study
also highlights the positive influence of budgetary performance evaluation on employee
motivation. Based on these findings, the study concludes that budget and budgetary control
systems effectively support decision-making, resource allocation, and performance evaluation
within public enterprises. The study recommends that EEU and other public enterprises
recognize the importance of aligning operational plans with the strategic plan, coordinating
activities among different budgetary control units, enhancing accountability and
responsibility, and linking performance evaluation to employee motivation. The study also
suggests integrating budgeting with strategic decision-making, continuous evaluation and
improvement of the budgeting process, and improving the availability and accessibility of
timely and accurate information for budgeting and budgetary control processes.