Budgetary management and project performance

Abstract

The study examines the Effect of Budgetary Management on Project Performance; A case of National Housing and Construction Company Uganda. In the study, Budgetary Management is measured in terms budget planning, budget implementation as well as budget control. On the other hand, project performance is measured in terms of Project Scope achieved, Project Efficiency and Project continuity. Employing a descriptive survey design and adopting both qualitative and quantitative research approaches, the digests three objectives namely; to examine the effect of budget planning on Project Performance at NHCC Uganda; To investigate the relationship between budgetary implementation and Project performance of NHCC and To examine the effect of budgetary control on Project performance of National Housing & Constructions Ltd. The study used a sample of 83 respondents who were employees of the corporation in various departments associated with budgetary management. However, 68 of the questionnaires issued were received back as fully answered representing a response rate of 88.3%. Data was entered and analyzed using Statistical Package for Social Scientist and presented in tables. The research findings indicate that all dimensions of budgetary management (budget planning, budget implementation and budget control) are positively and significantly associated with project performance with correlation coefficients of 0.665, 0.55 and 0.516 respectively. Regression analysis performed on the data reveals that budget planning has a highest positive effect on project performance with a beta value of 0.903 followed by budget implementation with beta value of 0.102 while budget control negatively affects project performance with a beta value of -0.368. Overall, R-Square indicates that the examined measures of budgetary management (Budget Planning, Budget Implementation and Budget Control) account for 46.6% of the variation in project performance and hence the model averagely fits the study findings. Based on the study findings on budget planning, it is concluded that NHCC lacks proper budget planning, heavily relies on manual accounting and budgeting systems and that there is no management support as regards budget planning. Further, based on findings on budget implementation it is concluded that there is poor budget communication, inadequate capacity to man the projects as well as continued instances of collusion of projects at the corporation. Relatedly, given the findings on budget control, it is also concluded there is there is unsatisfactory budget reviews, absence of budget control for tracking actual performance. The study recommends that management of NHCC should undertake effective budget planning, adopt computerized accounting and budgeting systems and also fully support the budgeting process so as to achieve improved project performance. Secondly, NHCC should improve budget communication across the departments, recruit, and train and improve staff management and also harness rigorous project scheduling to address inadequate capacity and continued project collision.