Budgeting process and performance of nonprofit organizations in Kalisizo Town Council

Abstract

The study investigated the relationship between budgeting process and organizational performance using a case study of Rakai Health Sciences Program. The study objectives were; to examine the effect of Budget Planning on the performance of Rakai Health Sciences Program, to examine the effect of Budget Control on the performance of Rakai Health Sciences Program and to examine the effect of Budget Participation on the performance of Rakai Health Sciences Program. The research design used was a case study design. Both quantitative and qualitative approached were employed. The methods used for data collection were questionnaires and interview guide. The population study consisted of 50 employees and a sample size of 44 respondents was selected using the Krejcie & Morgan (1970) table. Data was analysed using SPSS Version 16.0. Correlation was used to determine the relationship between the independent variable and dependent variable so as to present the quantitative data in form of tables. The study revealed that there was a positive significant relationship between budget planning and performance of NGOs (r=0.911, p=0.00), there was a strong positive relationship between budget control and performance of NGOs (r=0.838, p=0.00) and there was a positive significant relationship between budget participation and performance of NGOs (r=0.788, p=0.00). Budgeting process as a factor affecting the organizational performance of Rakai Health Sciences Program was accounted for by (Adjusted R Square = 0.770), the regression analysis showed that budget control affects the organizational performance of Rakai Health Sciences Program with Beta = 0.528, budget participation with Beta = 0.435 and finally budget planning with Beta = -0.012. The study finds evidence that budgeting process has a positive relationship on the performance of NGOs. It was therefore recommended that the organization reviews and enhances existing budgeting policies and guidelines to further strengthen budgeting process in the organization. Since departments participate in budgeting process, the organizations should use budgets to motivate employees to do better, forecast the future, to assist in control, as a means by which management communicates to other levels of department and as a means of performance appraisal which will in turn improve the performance of the organization. And finally the researcher recommends that the organization should pay a close attention to each step of the budgeting process as each step influences the organization performance and failure in one step might affect subsequent steps and therefore make the organization to operate inefficiently.