ASSESSMENT OF BUDGETING PROCESS IN MINISTRY OF INNOVATION AND TECHNOLOGY ADDIS ABABA, ETHIOPIA

Abstract

A budget could be a financial plan to manage future operations and results. The study investigated the budgeting process system in Ministry of Innovation and Technology in Ethiopia. The main purpose of this study was to assess the budgeting process in Ministry of Innovation and Technology with the company side at plan and preparation, approval, execution and controlling stages. The lack of research, especially under the budgeting process context, coupled by the sign of improper budget utilization and large number of budget transfer one program to another have been a major motivation to study this thesis. Thus, the paper tried to investigate weaknesses observed in budget process. This study used descriptive type of study and used mixed approach. Primary as well as secondary data have been employed to explore the existing problems. The study used senesce sampling techniques that used whole population, twenty four budget makers were taken with a total of 63 respondents. Moreover, finance director was included in collecting primary data through unstructured interview. To conduct this study descriptive statics and thematic analysis was used for analyzed questioners and interview data respectively by different tables and charts demonstrated that MInT has limitations in all budgeting process stages. They use IFMIS software to record, analyze and reports of input and output cash flows then expenditures recorded and sufficiently documented in appropriate codes. Majority of the respondents confirmed that they prepare their budget based on unrealistic data just coping from the previous year budget request mainly due to prepared budget and plan without the participation of all concerned employees, lack of experience and skilled employs, lack of commitments, lack of positive attitudes and on the validity of assumptions taken in preparing the annual budget. The body that approved budget is considered budget plan but MInT requested budget adjustment after the approved budget. In budget execution stage of MInT, there is no proper budget implementation because of improper work of budget preparation and planning stage and complicated procedure in procurement as well as payment system. Although most of the respondents denied that there is no regular supervision and strict follow up on all departments. Budgeting process is sensitive area then all stages are analyzed seriously if one stage cannot work properly, could not properly utilize the budget. So should take all possible actions in all stages especially in budget plan and preparation stage to correct the observed weaknesses, and to avoid repetition of the same problems in subsequent year.