Procedimiento

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pattern of the expenditure. Heads of department also report on the progress of programmes, projects and services carried out by their departments. These reports make for proper monitoring and evaluation, which undoubtedly guides the budget of the next year. Control reports will usually be in the form of figures, tabulations, though sometimes, the necessary information may be conveyed more coherently by graphs and charts.

In an attempt to explicate the format of the control report, Eze (2000) states that the report should be clearly headed and the period shown, information not relevant to the purpose for which the control report was prepared should be omitted, the report should not attempt to portray such information that clarity is lost, the names of the persons preparing the reports and the recipients should be given, simplicity should be encouraged and the use of technical accounting jargons and terms should be avoided, information included in each report should be limited to the sphere of the person to whom it is furnished, promptness in the preparation of the report or statement is preferred to absolute accuracy, as their purpose is not merely to convey information but to convey it promptly for immediate action and finally, all returns should be reviewed periodically to ensure that they are still necessary

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Ekewealor (2007) defines budgetary control as the control through the appropriate use of Budgets. Ekewealor further summarizes the requirements for effective budgetary control as follows:

i. Clear objectives or goals for the budget period. These goals are expressed in quantifiable and measurable terms.

ii. A tight and realistic Budget indicating the clearly, resources requirements for the attainment of goals. This covers revenue generation and cost requirements.

iii. Breaking down goals into sub-goals attainable in mini periods e.g. monthly, quarterly, half yearly, etc.

iv. A comparison of the variances into various segments of causes to aid future forecasts and corrects the imperfection of the past.

Budgetary control advocates the exercise of discipline in the Budget implementation. This is exemplified in the laid down financial instructions of States Government, financial Memoranda for the Local Government and financial regulations for the Federal Government.

Eze (2000) maintains that budget accountability begins with an audit of the accounts produced during the execution phase, preferably, by an auditor independent of the administration. If the categories in place in the budget relates specifically to incomes and expenditures, which is the case when a traditional budget is in operation as in most states in Nigeria presently, the audit can lead only to judicial proceedings against officials suspected of dishonest spending.

However, if the budget also includes quantified programme budgets, then the audit can respectively judge efficiency and effectiveness. Judgments of efficiency and effectiveness are highly relevant to formulation of the budget for the following year.

3.1.16` Components of the Nigerian Public Budget

Ekewealor (2007) states that States‘ share of Federation Account which is normally supplied by the federal Government to the Ministry of Finance comprises:

a) Consolidated Revenue Fund charges: This includes proposal on salaries and allowances of statutory office holders, provision is made for known public debts including debts owed to suppliers and contractors and provision for Staff Pensions and Gratuities.

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b) Personnel Costs: Comprising provisions for salaries and attributed allowances to staff.

Prior to this, an adequate, comprehensive and up-to-date Nominal Roll of staff should be provided or presented, with sufficient data. Hence, the Nominal Roll must be in agreement with the list in the Personnel Costs Estimate proposals.

c) Overhead Costs: Overhead costs proposals are usually made in the prescribed format

and constitute recommendations for subventions

(funding/payments/allowances/assistance) to Parastatals, Commissions, Tertiary Institutions and Agencies.

d) Capital Expenditure Estimate: The Capital Expenditure Estimate proposals are predicted on the Rolling Plan. Before a provision is made in the annual Capital Expenditure Budget, it must have been entrenched in the Rolling Plan. Usually, top priority is given to care and establishment of on-going projects that have attained more than 70% completion level and on-going projects considered critical to the fulfillment of the statutory responsibilities of the Government.

e) Capital Receipts: Ministries/Non-Ministerial Departments will provide for Capital Receipts only if the related projects are funds specific and the funds are obtainable from Donor Agencies/Loans from internal and external sources. The Ministry of Finance will have adequate records of such funds flow and will eventually provide for all Capital Receipts which are made up of: Recurrent Surplus transferred to Capital Development Fund, savings from the previous year, external loans(if any), internal loans(if any), Grants (if any) and miscellaneous.

3.1.17` Flexibility of Government Budgeting in Nigeria

According to Eze (2000); Ekewealor (2007) and Ugoo (2008), most public sector budgets can be regarded as fixed budgets as the level of resources often determines the level of activity and service provision. These resource levels are usually established in advance of the financial year.

Normally, all government budgets are classified and coded according to the type and vote. This enables money to be allocated to specific identification purposes. No transfer is permissible between votes. This limitation enhances control exercised by the system. However, occasions may arise where more funds are needed and have to be provided after preparation of the main

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budget. In such a situation, a Supplementary Appropriation Bill is presented to the legislature within 30 days for the purposes of replacing the amount so advanced.

Terms such as vehement, supplementary estimates and contingency fund depict flexibility of government budgets and are explained as follows:

a. Vehement: This refers to the transfer of funds between sub-heads of expenditure within the same head.

b. Supplement estimates: By the constitutional provision, supplementary estimates are made if in respect of any financial year, it is found:

i. That the amount appropriated for the payment is insufficient, or

ii. That a need has arisen for the expenditure for a purpose for which no amount has been appropriated by the laws, a supplementary estimate showing the sums required shall be laid before the House and the heads of any such expenditure shall be included in ‗Supplementary Appropriation Law‘.

c. Contingency Fund: Flexibility is also offered by the use of contingency fund. When there is an unforeseen and urgent need, advance is made from the contingency fund to meet the need. Thereafter, supplementary estimates shall be presented and a Supplementary Appropriation Bill is presented within 30 days for the purposes of replacing the amount so advanced.

3.1.18` Characteristics of Budget Administration in Nigeria

Emma (2001) explicates that for public budget in Nigeria to be efficient and effective, it must have certain essential features, namely: a budget period, a budget center, a limiting factor, a budget committee, a budget officer and a budget timetable.

(a) Budget Period: This is the period covered by the Budget. It is the period for which forecast can be reasonably made in an organization. It is customary to use the budget as the unit of time for which the vital comparison of the actual expenditure to which budget is made. In many cases, a budget for a long period is built up as a general objective of an organization, but supplemented by a short period budgets prepared in greater details for the attainment of the objective.

The short period budget is compared period by period with the long term budget so that the management can see if and how projects are progressing satisfactorily along the general lines

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laid down. In some cases, the long term budgets are made as a result of experience on the short term budgets.

(b) Budget Centre: Control in budgeting could only be attained through people, thus, budget allocation and actual cost approvals have to be assigned to people who can be held accountable for its control. Therefore, an organization is broken down into budget centre like departments, units, sections. A budget centre is thus a location to which cost may be changed like those mentioned above, and the responsibility of this cost being wholly and exclusively borne by a single member of the organization. For example, the head of a department is such a single member that can be held responsible for the department‘s budget votes.

(c) Principal Budget Factor of Limiting Factor: Certain factors hinder the expansion of an organization. For instance, in a trading organization, such factor could be sales, but in the Bureaucracy or public organizations, it is fund. However, there are other factors which may also limit enterprise activities, such as shortage of manpower, machinery, fund, space. Where a limitation is imposed by any of the underlying factors, it is known as ‗principal budget factor‘ for the particular organization concerned. It must therefore be determined and its values (effects) assessed before any other factor is budgeted for. The main objective of the management is to make plans which will ensure that the principal budget factor is utilized to a maximum. In some cases, principal budget factor or limiting factor does not remain constant and if the limitations imposed by one factor are removed, then another factor takes its place.

(d) Budget Committee: It is important to have a coordinating authority which is necessary to resolve difficulties and disputes which arises between the departmental heads in relation to the budget they submitted. It must be borne in mind that the aim of budgeting is to produce a forecast of how all the various sections of the business should behave, decision of this nature are that of the chief executive, though a committee is normally appointed, which comprises the departmental heads. This committee is called the ‗budget committee‘.

(e) Budget Officer: In addition to the budget committee, a budget officer is always appointed and his work is essentially that of a secretary to the committee and entails the following functions:

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i. Ensuring that the committee‘s secretarial work is carried out – preparation of agenda, minutes and sending notices of meeting;

ii. Ensuring that the committee‘s instructions are passed to the appropriate people;

iii. Collecting data and opinions for consideration by the budget committee;

iv. Keeping managers and departmental heads abreast of the budget time table by ensuring that they submit their preliminary budgets according to schedules or in time and

v. Coordinating and briefing members of the committee on budget matters.

The budget officer in many cases is normally an accountant or someone with finance background.

(f) Budget Time Table: Before preparing the major budget, it is imperative to prepare many of the smaller but key budgets. If these smaller budgets are not completed quickly, then the preparation of the major budget would be held up which in turn will delay the summary budget and ultimately the master budget. Delay in issuing the master budget is awful. A budget produced after the start of the period for which it was meant to control has very much reduced value and may delay operations and activities or projects.

In order for the master budget to be issued before the period begins, it is necessary to prepare a carefully articulated time table for all budget activities. Onah (1998) stresses that this time table must be rigidly adhered to, since delays in preparation of budgets can lead to serious consequences. Table 3.1 shows the time table for the budgetary process used by the Local Government.

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Table 3.1. Time table for the budget process (Peculiar to the Local Government System)

Source: Onah (1998)

(g) Budget Manual: To assist everyone engaged in budgeting and budget administration, a budget manual is normally issued. A budget manual is a document that sets out such matters as the responsibilities of people engaged in the routine operation of the budget. It also indicates the control measures required by the budget operators. The manual also sets out persons involved in budgeting and budgetary control to enable them maximize their contribution to the budget compilation and their benefits from the control data ultimately reported back to them.