The impact of effective budgeting and budgetary control on financial performance in selected Zimbabwe Union Conference entities

Abstract

Resources are scarce and our wants are unlimited. The endless wants and limited resources bring about the need for efficient and effective allocation of resources in a way that brings stability, growth and profitability of an organization. Effective budgeting involves a right budgeting process, a consultative approach, and an adherence to policy regulating the process. However, effective budgeting is not enough. There needs to be an effective budgetary control for entities to have a good financial performance. These two elements, budgeting and budgetary control are inevitable in any type of organization, including the church institutions. The study was aimed at helping administrators in the church institutions budget effectively and effectively use approved budgets as control tools in their organizations so as to improve the organization’s financial performance. Once the relationship between budgeting, budgetary control and financial performance has been established, the study will help the administrators of organisations to take budgeting and budgetary control concepts seriously. They will formulate and/or adopt policies that promote effective budgeting and budgetary controls in all entities for the benefit of all organisations and their sustainable growth while supporting the organization’s mission. The study was a cross-sectional causal study that helped the researcher analyse the effects of budgeting and budgetary control on financial performance of selected Zimbabwe Union Conference entities. The study was done in Zimbabwe using six conferences and it made use of all executive committee members of each of the six entities and all the union officers. Other employees who are either involved in the budgetary process or who make use of these budgets were selected using purposive and census sampling procedures. Data was collected using a 7-point Likert scale questionnaire and analyzed using SPSS version 20 after it was checked for validity and reliability. For the descriptive aspect, the data was used to calculate means and standard deviations. Correlations and regression analysis were used for inferential statistics. There was a statistically significant impact (p< .05) in both effective budgeting and effective budgetary control on financial performance. The researcher concluded that both effective budgeting and effective budgetary control are inevitable in any organization’s financial performance. The researcher recommended that the prevailing budgeting and budgetary control practices be encouraged in the future and the officers be trained in areas of weakness, especially the consultative approach. There also needs to be two-way communication that is maintained throughout the budgeting process and those involved in the budgeting and budgetary control processes be trained in order to increase their expertise. Further research is recommended to explore the area under study together with the other parts of financial management for non-profit faith-based organizations. The same study can be done in other institutions in Zimbabwe, and beyond the region, and the findings can be compared to assess if there are better ways being practiced elsewhere that can be shared and emulated. Other studies that combine both the perceptions and the financial data can be done to enrich the findings.