ASSESSMENT OF BUDGET IMPLEMENTATION AND CONTROL SYSTEM IN CASE OF DIRE

DAWA UNIVERSITY

DIRE DAWA UNIVERISTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPRATMENT OF ACCOUNTING AND FINANCICE

A RESEARCH PROPOSAL PAPER SUBMITED TO DEPRTAMENT OF ACCOUNTING AND

FINANCE IN PARTIAL FULLFILMENT OF THE REQUIREMENT FOR THE BACHLOR OF ART
(BA) DEGREE IN ACCOUNTING AND FINANCE

PREPARED BY:
TESHOME TADESSE
ABINET TAMENE
BIRAHANE BEREDA
ADVISOR:
INS.TILAHUN S.
OCTOBER, 2023
DIRE DAWA, ETHIOPIA
Specific Objectives
1. To assess the status of budgetary implementation system in DDU.

2. To describe is the status of budgetary control practice in DDU.

3. To examine whether there is a statistically significant budgetary implementations and control

practices among the past five years of DDU.

4. To identify the challenges of budgetary implementations and control practices among the past five
years of DDU.
Contents

CHAPTER TWO...................................................................................................................................................3
REVIEW OF RELATED LITERATURE.............................................................................................................3
Introduction............................................................................................................................................................3
2. Theoretical Literature Review...........................................................................................................................3
2.1 Theoretical framework.................................................................................................................................3
2.1.1. Theory of budgeting.............................................................................................................................3
2.1.2. Budgetary Control Theory...................................................................................................................4
2.1.3. Accounting Theory in Budgetary Control...........................................................................................5
2.2 Type of budget.............................................................................................................................................6
2.2.1 Recurrent budget...................................................................................................................................6
2.2.2 Capital budget.......................................................................................................................................6
2.3 Budget Preparation.......................................................................................................................................7
2.4 Budget Utilization........................................................................................................................................8
2.5 Concepts of over and under utilization of budget........................................................................................8
2.6 Reason for variation between budgeted and actual Expenditures................................................................9
2.7 Budgetary control.........................................................................................................................................9
2.8 Limitation of budgetary control system...................................................................................................10
2.9 Performance evaluation..............................................................................................................................11
2.10 Empirical literature review.......................................................................................................................11
2.11 Empirical and Theoretical literature Review major Gap.........................................................................14
2.12 Conceptual Framework of the Study.......................................................................................................15
Figure 1: Conceptual Framework of the Study....................................................................................................16

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

Introduction
This section tries to see the analysis of the existing knowledge and other researchers “works from
library, different websites, research papers and other documents in order to know the concept of
budget, budget approval, budget implementation and budget control and some empirical literatures
are discussed. In this part, assessment of related theoretical literature from different books written by
different scholars on the basic concept of the government budget implementation and controlling was
presented to identify and analysis documents consisting of information associated with the research
problem being investigated.

2. Theoretical Literature Review

2.1 Theoretical framework

There are three theories that support budgetary control of organizations namely the theory of
budgeting, budgetary control theory and accounting theory in budgetary control as discussed below:

2.1.1. Theory of budgeting

“Budget” and “Budgeting” are concepts traceable to the bible days, exactly the times of Joseph in
Egypt. It changed into pronounced that not anything changed into given out of the treasure without a
written order. History has it that Joseph budgeted and stored grains which lasted the Egyptians
throughout the seven years of famine. Budgets were first introduced in the 1920s as a device to
manage costs and cash flows in large business organizations (Bartle, 2001). The emergence of
scientific management philosophy however laid emphasis on detailed information as a basis for
taking decisions thus leading to tremendous development of management accounting and budgeting
techniques (Bartle 2008).

Hirst (1987) explains that a budgetary control solves an organization’s need to plan and consider how
to confront future ability risks and opportunities by establishing an efficient method of control, a

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detector of variances amongst organizational objectives and performance (Shields and Young, 1993).
Budgets are considered to be the core element of an efficient control process and consequently crucial
detail to the umbrella concept of an effective budgetary control. Budgets are undertaking future
financial performance which enables evaluating the organizations financial viability of a designated
strategy. In most organizations this process is formalized by preparing annual budgets and monitoring
performance against budgets. Budgets are therefore definitely a collection of plans and forecasts
(Silva and Jayamaha, 2012).

Budgets can in addition impact the conduct and selections of personnel via way of means of
translating businesses objectives, and imparting a benchmark against which to assess performance.
Hancock (2009) even considered such operational planning as the backbone of management. During
budget preparation procedures, attention of alternative courses of action becomes an integral part and
leads to increased rationality. A budget allows a goal, a standard of performance to be established
with subsequent comparison of actual results with the created standard. It requires those involved to
be forward looking rather than looking back (Scott, 2005). Budgets have consequently been
diagnosed as gambling some of roles which encompass making dreams explicit, coding learning,
facilitating control, and contracting with external parties (Selznick, 2008).

2.1.2. Budgetary Control Theory

Budgeting system is a tool utilized by the organization as a framework for his or her spending and
revenue allocation. To make certain its resources are not wasted, the organization must be able to
come out with an effective budgeting system. This is important as it ensure that the outputs produced
and services delivered attained the objectives. According to this theory, a good budgeting system
must be able to addresses the effectiveness of the organization’s expenditure. The organization has to
put proper controls that ensure that the budget is properly maintained and allocated. This is achieved
through cutting costs in order to increase the quality service offered by the organizations. However, if
an organization has lesser revenue generation sources they might have to find a way to fund their
estimated budget by borrowing and tax restructuring (Robinson and Last, 2009).

Budget additionally may be used an indicator of the performance of the ruling government. It is a
declaration of whether or not they're able in administering the company and the country wide
resources (Sawhill and Williamson, 2001). One of the models of budgeting system is Performance

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Based Budgeting System. According to (Robinson and Last, 2009), performance based budgeting
system (PBBS) aims to improve the efficiency and effectiveness of public expenditure.

That is why the budget is mostly regarded as the control of expenditure. The government of Ethiopia
is investing public budget on social and monetary infrastructure (education, health, water, road,
power, communication etc...) in order to provide public services and enabling environment for private
sector to invest(Mohammed and Asfaw 2014).

2.1.3. Accounting Theory in Budgetary Control

Accounting theory is aimed closer to provision of a coherent set of logical standards that form the
general frame of reference for the assessment and improvement of sound accounting practices and
policy development (Kaplan and Norton 1996). Then Budget had been defined as accounting tool
used to plan and control resources of operational department of government and divisions
(Abdullah& Angus, 2012).

According to (Otley and Pollanen, 2000) the purpose in developing a theory of accounting is to
establish standard for judging the acceptability of accounting methods. Procedures that meet the
standard should be employed in practice of accounting. (Horvath, 2009) argues that the accounting
methods that fail to meet the standard should be rejected. Accounting theory helps in explaining and
guiding management actions in identifying and locating information necessary to be used in budget
preparation. The money measurement concept in accounting has contributed to a greater extent in
providing yardstick for quantifying, conversion and translating various inputs in relation to materials,
and machines required in the preparation of budget (Horvath and Seiter, 2009).

Theory in accounting guide in the selection of principles and roles to be implemented in particular
circumstance. The accounting theory in budget control has come up with different models of analysis
for example revenue analysis and standard costing which serve as a standard setting in budgeting.
Theory has an important normative role in the evaluation of budget and control procedures to be
adopted. Theory has assisted in making predictions of the likely outcome of budget action in a given
set of circumstance and effect of any change in circumstances. Accounting theory has developed
models in which standard can be set.

By establishing the cost for numerous programmers’ government set up, the standards by which
government programmers are to be review and evaluated. Budget has become the primary instrument

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by which government attempt to manage economic growth and improvement. Budget become
accounting instruments by which officials are held accountable for what government does and does
not manage to accomplish (Yakubu, 2011).

Government use budgets as a guiding device for making plans and manage of its resources, be it
financial or otherwise. The use of budget involves understanding how much money you earn and
spend over a period, particularly one year. When a budget is an establishment, department or ministry
is created, it manner growing a plan for spending and saving money (Abdullah August 2012).

To sum up, budget control can be explained as the process of using budgets as control mechanism to
evaluate managers as well as originations performance by considering deviations from budget figures
to actual figures. Accordingly, budgetary control is a system that uses budgets as a controlling and
planning tool (Fadi Baker, 2013).

2.2 Type of budget

Government budget basically classified according to the characteristics of the organization in such
situation there are two types of budget recurrent and capital budget.

2.2.1 Recurrent budget

A recurrent budget tracks ongoing revenues and expenses arise on an everyday basis, be they
monthly, quarterly, semiannually, or annually. Also called an operational budget, are present day
budget consists of line items such as wages, utilities, rent or lease payments, and taxes. It additionally
consists of purchases that are expected to last for less than a year, including office supplies. A
recurrent budget can assist a company manage its money and come up with strategies for cutting day-
to-day costs.

2.2.2 Capital budget

A capital budget is used to assess ability investments or expenditures for specific projects or
Purposes. When an organization attracts up a capital budget, it is typically doing so to determine
whether it makes monetary sense to accumulate a particular asset e.g., a warehouse or a piece of
equipment -or to pursue a new project. Capital budgets cover purchases that are expected to last
greater than a year. The quantity an organization spends on such purchases is called as a capital
expenditure. When an organization creates a capital budget, it is usually with the goal of growing the

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business or increasing its value in the long run. However, the advantages of obtaining new purchases
or pursuing special projects must be weighed against the costs involved.

2.3 Budget Preparation

Procedure of making ready and agreeing on finances is approach of translating the general targets of
the enterprise into detailed, viable plan of action. Public finances training is one of the tedious
obligations that any use ought to appearance upon; the training procedure for the once a year finances
includes an extremely good deal of energy, time, and expense. Hence, it's miles vital that a rustic have
to be capable of observe as it should be all of the strategies of making ready an annual finances
(Maitland (2001).

Even though finances training aren’t always the only component that desires attention in budgeting,
the premise of its miles nonetheless wished with a view to have at the least near estimation. As in step
with Shah (2007) Preparation of the finances typically takes many months and includes all public
institutions: the Ministry of Finance manages the procedure; the Cabinet/President units or approves
the coverage priorities, line ministries plan and propose for his or her aid desires and the legislature
opinions and approves the very last plan. Preparation is on the coronary heart of the political
procedure: its miles the choice on a way to allocate the state’s restricted assets to competing demands.

Preparing a finances notion that indicates a hard and fast of advocated regulations and remains inside
something monetary limits are taken into consideration politically practical has been a distinguished
difficulty in public budgeting Bunch and Strauss man (1993).

One technique is to set unique greenback ceilings on finances requests. This technique has the
wonderful gain of creating corporations put together requests that encompass most effective
financially viable alternatives Lee (1992). This approach is regularly known as fixed- ceiling
budgeting. Budget ceilings train corporations to request subsequent year’s budgets primarily based
totally on sure assumptions, which include their set of priorities concerning rankings. Another
technique is for the governor to offer coverage steerage in phrases of universal priorities and/or
steerage with the aid of using foremost program. According to Schiavo- Campo and Tommasi (1999)
and Allen and Tommasi (2001), the Main beginning factors for the training of the once a year

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finances ought to be a clean definition of financial goals and a strategic framework inclusive of a c
complete set of targets and priorities.

As Schiavo- Campo (2007) said a hit finances training procedure combines pinnacle down course and
-Bottom up planning. The universal finances envelope and region/ ministry spending ceilings are
typically set with the aid of using the Ministry of Finance and the Cabinet/government according with
coverage targets.
These are then communicated to the road ministries that are liable for making ready their respective
region budgets. Through an iterative procedure of review, debate and bargaining, a consolidated
finance is hammered out. A finances notion is then provided to the legislature, in which its miles
debated and negotiated with the government and sooner or later handed into law.

2.4 Budget Utilization

Once a budget has been accredited with the aid of using the legislature, the authorities embarks at the
difficult venture of spending funds. Utilizing public funds efficiently to fulfill said coverage goals
even as making sure price for cash is regularly simply as difficult as making plans the way to spend
it.
As they argued, it's miles feasible to make use of badly a properly- organized finances; it isn't feasible
to make use of properly a badly organized finances. As in keeping with Allen and Tommasi (2001), a
success finances usage relies upon on several factors, together with the cap potential to cope with
modifications within side the macroeconomic environment and the implementation capacities of the
businesses concerned. Besides to this, the finances machine must guarantee powerful expenditure
control. In addition to a practical finances to start with, a great finances usage machine must have
whole budgetary/appropriation accounting machine. It is important to song transactions at every
degree of the expenditure cycle (commitment, verification, payment) and moves among
appropriations or finances objects Schiavo- Campo and Tommasi (1999).

2.5 Concepts of over and under utilization of budget

According to Allen and Tommasi (2001) stated that over utilizations are sometimes caused by non-
compliance of budget managers with the spending limits defined in the budget, when appropriated
expenditures is generally controlled, these overruns generate spending arrears; Overruns are often the
result of off- budget spending mechanisms (payment from special accounts etc).

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In some countries, payments made through exceptional procedures are not controlled against the
appropriations and are therefore an important cause of overruns; lack of compliance can be addressed
through strengthening the audit system, and reporting system, and ensuring the effectiveness of the
basic budget execution controls. Moreover, overruns can be caused by deficiencies in budget
preparation, Sound budget preparation processes and adequate institutional arrangements are a
prerequisite for avoiding overruns. On the other hand, Allen and that Tommasi (2001) expressed in a
number of countries, the official budget is under spent, particularly its non- wages expenditure items.
This does not necessarily mean that there is good fiscal discipline in these countries. In some
countries with poor governance, under spending of the official budget may coexist with large
amounts of off budget spending.

2.6 Reason for variation between budgeted and actual Expenditures

As according to Omitoogun and Hutchful (2006), there are arrange of things that may give an
explanation for why actual expenditure deviates from the degrees approved at the beginning of the
monetary 12 months in any sector.
The reasons for deviations can also additionally range over time. Some of the more common unusual
place reasons are deviation in mixture expenditure; reallocation of fund at some stage in finances
implementation; coverage adjustments at some stage in the 12 months; an incapacity to put in force
policies, application and projects; and a loss of monetary field make a contribution for version in
budgeted and real expenditure, loss of each day tracking and controlling dedication and vulnerable
transparency, a responsibility and participatory on making plans and implementation of government
budget.

2.7 Budgetary control

The institute of cost management accountant defined budgetary control as the establishment of budget
relating to the responsibilities of executive to the requirement of policy and the continuous
campaigned of accrual budgeted results either to by individual’s actions the objectives of the policy
are to provide a basis for provision.
The two basic functions of budgeting deals with comparison of actual results with the budgeted
taking of corrective action to adjust for difference when necessary, the comparison of budget and
actual data could occur only after actual accounting data have been accumulated. Omolehinwa (2004)
sees budgeting control system which uses budget as a planning in controlling all aspect of services.

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Preplanning is a cardinal facture of budgeting control and that each budget has the action of the
people their performance and the cost they incur. Budgeting control from the perspective of
management or exception stated that budgeting control according to plan and to concentrate on
exceptions. However, Godwin (2001) sees budgeting controls a system which uses budgets as a
means of planning and controlling all aspect of services Preplanning is a cordial facture of budgeting
control. The plan is represented in the master bud get. Each segment of the master budget is covered
by functional budget. However, he presented what was considered as landmark in budgeting analysis
as it relates to Nigeria. He stressed on the relationship between accounting and budgeting he was of
the view that accounting system and budget are built around the organization structure and both are
information system concerned with the same operation and financial situation.
The budgeting process helps to organize and formulate the planning required for these operations
express objectives and then, becomes a means to measure the extent to which the plans have been
achieved. Budgetary control is planned to assist management in the following ways in the allocation
of responsibility and authority.
 To aid in making estimate and plans for the future.
 To assist in the analysis of variations between estimated and actual results.
 To develop basic of measurement or standards with which to activate the efficiency of
operations.
The use of budgetary control provides a co- ordination factor in business. Its importance as a cool of
management can be deduced from the foregoing discussion. It could be seen that it is as significant in
planning as it is in control with budget oppression. Here actual performance is compared with budget
outcome and favorable or unfavorable variance determined.

2.8 Limitation of budgetary control system

 Estimates: Budgets also can moreover or may not be true, as they may be based definitely
simply mostly on estimates. The assumptions about future sports activities sports also can
moreover or may not truly happen.
 Rigidity: Budgets are considered as rigid document. Too loads emphasis on budgets also can
moreover have an impact on Day to day operations and ignores the dynamic state of
organizational functioning

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  False Sense of Security: Mere budgeting can't bring about profitability. Budgets can't be
carried out automatically. It also can moreover create a faux experience of protection that the
whole thing has been taken care of within side the budgets.
 Lack of coordination: Staff cooperation is generally not available in the end of Budgetary
Control exercise.
 Time and Cost: The advent and implementation of the device may be expensive.

2.9 Performance evaluation

Performance evaluation is a key element for effectiveness, through an evaluation plan, the firm can
clarify what direction the evaluation should take based on priorities, resources, time, and skills
needed to accomplish the evaluation. To improve effectiveness and transparency, the management
group should be actively involved in the process of monitoring and evaluation of budgetary control
processes and procedures. As a manager you will like to evaluate your own performance even if you
are not assessed by your superior. However, performance is often evaluated by measuring a
manager’s performance against budget and the skill to achieve the targets would lead to promotion or
bonus (Hancock, 2009)

2.10 Empirical literature review

The empirical study concerns on prior academic research on the assessment of budget implementation
and controls system. In this case there are certain empirical studies undertake by different researchers
related to the budget implementation and controls discussed in the following.
The World Bank, 2007) obviously, if there are multiple ways of defining a program budget, no
particular approach has a special claim to legitimacy (KIPF and WB, 2007). But there is consensus
among the scholars. This is a key to program budgeting is the program - a public policy objective
along with the steps necessary to attain it (The world Bank, 1998)
In addition, Getachew (2006) explained that, the main problems of the Ethiopian budget process
systems were:
1. Lack of proper medium term perspective;
2. Lack of properly integration of capital and recurrent budget;
3. The head of public bodies did not give much attention for preparation of budget;
4. Budget doesn’t give incentives for efficiency;
5. During budget utilization performance measures is not applied;

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6. The relationship between budget and macro- economic policy framework is insufficient;
7. Preparation of budget based on unreliable data and estimation;
8. The budget system was ineffective to ensure financial accountability; and
9. Involvement of stakeholder and Political commitment in the budget process are limited.
In the same view in a round table discussions organized by CIMA and ICAEWin 2004 on “The
traditional role of budgeting process in organization”, it is stated that budgeting and the
accompanying process are indispensable and that, research in organizations seems to suggest that this
is a commonly held view. It was further stated that, traditional budget process remains widespread.
Some claim that as many as 99% of European companies have a budget in place and no intention to
abandon it (Kennedy&Dugdale 1999, cited in CIMA ICAEW, 2004). Consistent- with this, Anand
(2004) a in a survey carried out in India found out that good budget process as one part of
management control system is wide spread. Precisely, 88.7% of the respondents in their study
prepared budgets. They assert that nearly all the companies in Australia, Japan, UK, and USA prepare
budgets (Asada et al., 1989, Blayney&Yokoyoma, 1991, Chenhall&Langfield1998 all cited in Anand
et al., 2004).
On the contrary, research also shows t hat over 60% of company’s claim they are continuously trying
to improve the budgeting process to meet the demands set for management in creating sustainable
value (Ekholm&wallin, 2000, cited in CIMA - ICAEW, 2004).

According to Canfield University in 2001 teamed up with Accenture’s finance and performance
management service line to undertake a large worldwide review of planning and budgeting. They
focused on 15 companies in the US and Europe which had already made adjustments to their
budgeting practice. In addition, the researchers “reviewed over100 academic and practitioner books
on the subject. The result showed widespread dissatisfaction with the budgeting process
(BournAccording to Afemikhe (2003), these three elements of value for money can be described for
budget controls and implementation as follows: -
A. Economic is the practice by management of the virtues of thrift and good housekeeping. An
economical operation acquires resources in appropriate quality and quantity at the lowest cost.
B. Efficiency is making sure that the maximum useful output is gained from the resources devoted to
each activity, or alternatively, that only the minimum level of resources are devoted to achieving a
given level of output. The efficiency of an operation could be said to have increased feather lower

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cost were used to produce a given amount of output, oral given level of cost has resulted in increased
output.
C. Effectiveness is ensuring that the output from any given activity is achieving the desired results.
There is, therefore, the need to establish that the desired goals are being achieved in order to evaluate
effectiveness. The type of interrelationship among these three elements is that all of them must be in
place before the assessment of value for money can be complete. Right things must be done, using the
right method and at minimum cost. For instance, as much as effectiveness is linked with the
achievement offset objectives, it is also important to expect that the objectives are achieved by the
application of the right methods that is, efficiency. The use of s sledge hammers to kill housefly,
though effective is not efficient. The application of value for money concept to auditing leads to the
concept of Value for Money (VFM) audit. It is applicable to both the private and public sector, but
more emphasis has been placed on its application to the public sector. It is related to the extent to
which funds are spent economically, efficiently and effectively. It is also referred to as
Comprehensive Audit or Efficiency Audit.

Turyakina (2004) pointed that, budgets play a highly important role in performance evaluation.
Attaining corporate objectives is per amount to success. Performance of any organization is often
evaluated by measuring success in meeting the budget objectives. When budget is successfully
implemented and executed will enable realization of company objectives and once this has been done
the organization is said to have achieved at performance level. Thus, efficient budget management is
important for smooth performance of any organization.

In a study, Douglas (1994) used a case study approach and found that budgeting places high
importance on budget- actual- comparison for performance evaluation purpose; both at corporate and
subordinate levels. Moreover, there are other factors that influence motivation to perform;
participation in the whole budgeting process that is involvement of all employees, from subordinate
to corporate level in preparation of budget. Budgeting and budgetary control mainly forms and give
an organization the structural support to achieve its goals and objectives and maximizing performance
through effective resource allocation.

According to Joshi et al. (2007), examines budgetary planning, control and performance evaluation in
developing countries. A questionnaire survey of 60 medium and large sized firms including listed and
non- listed firms was conducted. His findings revealed that most of the firms prepare long- range

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plans and operating budgets, and use budget variance to measure performance for timely recognition
of problems and to improve the next period’s budget. Moreover, findings showed that the main
purposes of budgeting in most companies are to: maximization and the control performance by
investigating variances. Poor cooperation and ineffective planning are the main reasons for not
achieving the required standard targets.

Mule (2018), Conduct a study on assessment of budget implementation and control system: a case
study of Ethiotelecom west Addis Ababa zone. The researcher uses mixed research approach and
census sampling techniques. accordingly, the result of the study review that budget implementation
and controlling system of the organization is affected through several factors such as lack of lower
level manager, underutilization of estimated budget, budget, time delay in reporting budget variance
delay in reporting budget variance lack of higher officials monitoring and evaluation systems.
Esayas, Miju and Girma (2014) did a study on budget implementation and controlling system in
Kolfe Keranyo sub city, it shows because of poor database for planning and budgeting and lack of
experienced personnel in the various departments of the sub city causes gap in budget preparation and
controlling mechanisms.

Haimanot (2016), Conducted a study on an assessment of budget practice and control system: A case
observe study of Addis Ababa Gullele woreda 10. The objective of the study was identify the best
way how to us public resources. The findings of the study were shortage of professionals and vacant
positions are waiting for professionals and employee’s turnover, because of unattractive salaries of
employee, there is frequent turnover of employee, there is also improper use of resource in the long
run and problems in budget control. The researcher recommends controlling the overall performance
of various activities; the audit system has to be strong for effective budgetary control and avoided
improper use of resources in the long run.

2.11 Empirical and Theoretical literature Review major Gap

 Public higher education institution is one of the public sectors in which researches pertaining
to budgetary control system and the effectiveness of these systems were not studied enough.
To accomplish this gap in literature, researcher undertook to do the assessment of existing
budgetary control systems of MoE in reference to the above- mentioned research findings.
The MoE was restructured and sub- divided into other ministries; this assessment research

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 work based upon above mentioned research findings would add value to improve the existing
budgetary controls in the new setup of the ministry.
 Like other developing countries Ethiopia face different problems .stand from this point of
view the research will motive to conducting expenditure planning, budget allocation, budget
implementation and auditing. from previous studies what I sight there is many gaps or
drawback in showing how government budgets are implemented in public sectors; to examine
the linkage amongst public sector's plan and budget and to identify the major challenges faces
in the budget implementation of the public sectors, that the reason which related to political
powers that have its own impact on resource distribution.

2.12 Conceptual Framework of the Study

The conceptual framework followed the objective of the study and is developed by integrating
variables from different theories and related researches that state budget implementations and control
of organization from the literature review. The independent variables are classified into different
budget implementations and control systems (Budget Planning and preparation, Budget allocation
and Utilization, Variation between budgeted and actual Expenditures, Performance Evaluation).On
the other hand the dependent variable budget implementations and control System is the extent to
which an organization has met its stated goals and objectives and how well it performed in the
process. A budget is an estimation of revenue and expenses over a specified future period of time and
is usually compiled and re-evaluated on a periodic basis. It is a calculation plan, usually but not always
financial, for a defined period, often one year. A budget may include anticipated sales volumes.

Budgeting is the technique of creating a plan to spend your money. This spending plan is called
budget. Creating this spending plan allows you to decide in advance whether you will have enough
money to do the things you need to do. The frame work proposed that the budget implementation will
have an effect on control system both directly and indirectly. There are different types of variables
depend on the type of the research and data analysis. For this study purpose, researcher design
dependent and independent variables. The independent variable is the variable the experimenter
manipulates or changes and is assumed to have a direct effect on the dependent variable (Gunther, A.
C. 2010).

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 The study below shows the relationship between factor that involves in budget implementation and
their impact on control system. Based on the literature review, the researchers identify four dimension
of budget implementation conceder as independent variable and control system as most literature
identified as dependent variables.

Figure 1: Conceptual Framework of the Study

Independent variable dependent variable

Budget Planning and preparation

Budget allocation and Utilization

Budget Implementation and
Control System
Variation between budgeted and actual
Expenditures

Performance Evaluation

Conceptual Framework Source: Developed From the Research

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