Abstract:
This study analyzes the effectiveness of budgets and budgetary control in Parastatals with a.n aim of establishing the relationship between budgeted expenditure and actual expenditure in a financial period. The study also aims at establishing if budgets and budgetary control systems have an effect in monitoring and controlling expenditure. The population for this study was drawn from KPLC’s West Region’s financial records for the past five years to 30th June 2003. The region has three branches. A closed ended questionnaire was administered on both the budget holders and managers for purposes of establishing the type of managerial action taken in controlling costs. The numerical data was analyzed by means of the Time Series technique, Spearrnan’s Rank of Correlation Coefficient and the hypothesis tested by way of the Anova method. On one hand managerial action was tested by means of the Likert Scale, while on the other factors influencing budgeting and budgetary control systems were determined by ranking responses from a questionnaire. The study established that budgets and budgetary control systems in the Region are not effectively used for the intended purposes. It was also established that the type of action taken by management did not necessarily depend on budgeted expenditure and that other factors influenced monitoring and controlling costs
