TOWARDS PROGRAM BASED BUDGETING SYSTEM IN ETHIOPIAN PUBLIC AGENCIES AND ITS IMPLICATIONS IN THE CASE OF FEDERAL MINISTRIES.

Abstract

Fully implementing program based budgeting has money advantages over line item budgeting. However, in Ethiopian public agencies it is not effectively implemented. The main objective of the study was to assess the move towards program based budgeting systems in public agencies in Ethiopia. For the purpose of achieving this objective descriptive method of analysis was used. In this study primary data by using structured questionnaire used and the questionnaires were distributed to 102 randomly selected respondents from four(ministry of finance and development, ministry of education, ministry of agriculture, and ministry of health) public agencies. But 102 questionnaires were returned to the researcher. Budget preparation process, challenges and support by Ministry of Finance were used as key indicators. The result shows that, the implementation of program based budgeting is not effective and efficient, and lack of sufficient training (45% are disagree), lack of clear program structure, lack of knowledge program based budgeting (44.1% are disagree) the major problems for the effective implementation of the project. The support by the ministry of finance is not adequate in that for 5 questions for 3 questions the majority (>50%) are disagree. It is recommended that public agencies should provide sufficient and timely training for the staffs, regular supervision and prepare performance report; staffs of the ministries should be committed in planning process of their respective budget.