BUDGETARY CONTROL AND THE FINANCIAL PERFORMANCE OF COUNCILS

ABSTRACT

Local councils as development partners to the central government need to mobilize enough revenue locally to support the central government’s development agenda. Inadequate financial resources can undermine the effective implementation of developmental projects in these councils. Budgets are important as they prudently manage scarce financial resources and at the same time serve as a means of expenditure authorization, control and evaluation base. Local councils in Cameroon prepare budgets but are not very prudent in their implementation unlike the profit-making organizations which consider budget and budgetary controls as important element in their policies.  It is against this background that this study was carried out to find ways by which local councils especially Tubah council can use budgeting and budgetary controls as management tools to prudently enhance their financial performance for local development. The case study approach was used in the study to identify the link between Budgeting, budgetary control and financial performance. To achieve this objective, secondary data was collected from the Finance department of Tubah council from the year 2000 to 2016 which included Tubah council’s annual budgets, Administrative accounts and discussions with key staff members. The data was analyzed using the Ordinary Least Square (OLS).The research found out among other things that local councils prepare budgets and control the budgets.  The research data evidently prove that in the case of Tubah council, this is true. Moreover, the study proved that budget preparation and control has a positive effect on the financial performance of Tubah council. However, poor budget formulation and implementation and low revenue generation base make it difficult for local councils to live up to their responsibility as partners to the central government in national development. Recommendations and suggestions have accordingly been made to improve upon budgeting and budgetary controls in local councils and the nation as a whole.                                                       

KEY WORDS: Budgeting, Budgetary control, financial performance, Tubah Council