i DESIGN AND IMPLEMENTATION OF A CLOUD-BASED COMPUTERIZED BUDGETING MANAGEMENT SYSTEM FOR NIGERIA UNIVERSITIES BY Ejeh Course Work submitted to the department of computer science, Joseph Sarwuan Tarka University Makurdi, in partial fulfillment of the requirement for the award of Master degree in Computer science. December, 2022
ii DECLARATION I declare that the work described in this course work is original, and has not been previously submitted to any university or similar institution for the award of any degree or certificate. Name of candidate: …………………………………………………. Signature: …………………………………………………………….. Date: …………………………………………………………………..
iii CERTIFICATION We, the undersigned hereby certify that this project work presented by EJEH ………………….) has been accepted as fulfilling of the requirements for the award of degree of Bachelor of Science in Computer Science. Title: Design and implementation of an efficient computerized budgeting management system for Nigeria Universities. Dr. E. Ogala ………………….……………….. Supervisor Signature/Date Dr. T. Gbaden ………………….………………. Head of department Signature/Date ………………………… .………………….……………… External Examiner Signature/Date
iv DEDICATION I dedicate this work to my Creator, whom by His grace and mercy helped me from the start of the degree programme to the very end, His name be praised. I also dedicate this work to my father, …………………………………………………
v ACKNOWLEDGEMENT I am deeply grateful to Almighty God for His favor bestowed on me throughout the period of my study. My inexpressible appreciation goes to my supervisor, Dr. E. OGALA for his immense contribution, patience, correction, constructive criticism and support given to me to make this course work came to a successive end. My profound gratitude also goes to the head of department DR. T. GBADEN and to all the academic staff of Computer Science department, Joseph Sarwuan Tarka University Makurdi for their care and support and also for impacting in me academically. My sincere appreciation goes to my beloved family, ………………………………………………………………………………………… ……………………………………………………………………….
vi TABLE OF CONTENTS TITLE PAGE DECLARATION.................................................................................................................................... ii CERTIFICATION................................................................................................................................. iii DEDICATION ...................................................................................................................................... iv ACKNOWLEDGEMENT............................................................................................................................. v ABSTRACT............................................................................................................................................... x INTRODUCTION................................................................................................................................ 11 1.1 Background of the Study ........................................................................................................... 11 1.2 Statement of the Problem .......................................................................................................... 13 1.3 Aim and Objectives................................................................................................................... 14 1.4 Significance of the Study........................................................................................................... 14 1.5 Scope of the Study .................................................................................................................... 15 1.6 Definition of Terms................................................................................................................... 16 LITERATURE REVIEW............................................................................................................................. 18 2.1 Overview of Budget and Budgeting........................................................................................... 18 2.2 Budget Tracking........................................................................................................................ 21 2.3 Budgeting Techniques.............................................................................................................. 24 2.3.1 Line-Item Budgeting System ..................................................................................................... 25 2.3.2 Incremental Budgeting System ................................................................................................. 27 2.3.3 Planning, Programming, Budgeting System (PPBS).................................................................... 27 2.3.4 Zero-Based Budgeting System (ZBB).......................................................................................... 29 2.4 Studies on Budgeting Systems................................................................................................... 30 2.5 Nigerian University Budgeting System ...................................................................................... 32 2.6 Efficient of Computerized Budgeting ........................................................................................ 34 2.7 Online Computerization of Budgeting ....................................................................................... 37 2.8 Budget Monitoring and Control................................................................................................. 40 2.8.1 Mechanisms for control and monitoring ................................................................................... 40 2.9 Types, advantages and disadvantages of Budgets ..................................................................... 41 2.9.1 Types of budgets ...................................................................................................................... 41 2.9.2 Advantages of Budgets............................................................................................................. 43 2.9.3 Disadvantages of Budgets......................................................................................................... 44
vii ANALYSIS AND DESIGN ......................................................................................................................... 45 3.1 System Analysis...................................................................................................................... 45 3.1.1 Fact finding ............................................................................................................................. 45 3.1.2 Analysis of the existing system................................................................................................ 46 3.1.3 Problems of the existing system.............................................................................................. 47 3.1.4 Advantages of the new system................................................................................................ 47 3.2 Modeling of the New System.................................................................................................. 48 3.2.1 Unified Modeling Language ..................................................................................................... 48 3.2.2 New System Model / Architecture Adopted ............................................................................. 54 3.3 System Design ......................................................................................................................... 54 3.3.1. Input design............................................................................................................................. 54 3.3.2. Output design.......................................................................................................................... 55 3.3.3. Functional Decomposition Diagram (FDD) ................................................................................ 58 3.4 Database design........................................................................................................................ 58 3.5 Program design......................................................................................................................... 60 3.5.1. Program Architecture (Class diagram)....................................................................................... 60 3.5.2 Program Algorithm................................................................................................................... 61 IMPLEMENTATION AND RESULT ........................................................................................................... 63 4.1 Program Implementation .......................................................................................................... 63 4.2 Program Testing........................................................................................................................ 63 4.4 Discussion of result ................................................................................................................... 66 4.5 System Requirement................................................................................................................. 66 4.6 System Implementation ............................................................................................................ 67 4.7 User Documentation ................................................................................................................. 74 4.7 System Changeover................................................................................................................... 74 CONCLUSION & RECOMMENDATION.................................................................................................... 76 5.1 Conclusion................................................................................................................................. 76 5.2 Recommendation ....................................................................................................................... 76 REFERENCES ......................................................................................................................................... 78 APPENDICES
viii LIST OF TABLES Table No. Title Page No 1. Long-term goals of the budget in Malaysian Public Universities. 21 2. Budgeting systems practiced 23 3. Budget allocation input design 45 4. Approved budget output design 46 5. List of tables in the database 48 6. Budget allocation table design 48 7. Test cases 53 8. Test results 54
ix LIST OF FIGURES Figure No. Title Page No. 1. Use case diagram for budgeting and budget tracking system (BBTS). 40 2. Activity diagram for BBTS 42 3. Data flow diagram for BBTS 43 4. Functional decomposition diagram for BBTS 47 5. The new system class diagram 50 6. Flowchart diagram for BBTS 51 7. Budget signup page 56 8. Budget login page 57 9. Budget proposal page 58 10. Budget recommendation page 59 11. Budget approval and rejection page 60 12. Budget manage system user page 61
x ABSTRACT The objective of this work is to design and develop a computer based budgeting and monitoring system that can track the income and expenditure of the Nigeria University. Budgeting with special emphasis on Nigeria Universities has the trust and reliability and credibility of information and record.To establish and implement a computerized measures and an alternative to the present manual budgeting as regards to budgeting system, one should be abreast of un- attestation and unrealistic records that exist.The justification of this is on the truth that present manual budgeting system in Nigeria especially in the Nigeria University, is filled with lots of irregularly and error resulting from human traceable mistake and distortions in its operation.In this work, one will deduced that the investment alternative will provide clear, adequate, accurate and quick solution to the problem countered in budgeting system as regards in relation to reliable attestation function, assurance and dependability of financial statements about the account of the school. To this effect, one will say that computers would be the pivot on which the success of design and implementation of a computerized budgeting system of the Nigeria University.Based on findings, it is recommended that the incremental budgeting system which is majorly adopted by Universities in Nigeria should be carefully guided to discourage corruption and financial recklessness as it encourages spending up to the budget towards the end of the year so that the budget is maintained the next year. It is also recommended that the Nigeria University Commission (NUC) gives an award to any University that allocates at least five percent of its revenue expenditure to research and publication.
11 INTRODUCTION 1.1 Background of the Study Finance is the art and science of managing money. It includes financial service and financial instruments. It is also seen to be the provision of money at the time when it is needed. Managing or controlling this finance requires carefully outlined approaches of acquisition and disbursement of such, this outline is termed budget (Khan et al., 2011). A look at a brief history of the how comes of budget. In January 1993 the African concord newspaper stated that budgets started in Britain when the then king asked for reports on the income and expenditure of the country in order to check fraudulent activities of their government, this was as a result of the Countries growing population inability of those in charge to specify a given project at a given place and time, uncompleted project which were paid for and complaints laid by citizens of Britain were all the things that brought about the need for budgets. In other-word a budget helps managers manage and it can be said that having a budget has more advantages than it has any disadvantages. A budget draws a static line in the sand, reflecting what an organization thinks is achievable based on available knowledge and series of assumptions made a number of months before the start of the financial year, ACCA and KPMG, (2015).
12 These Budgets are part of national and management control tools design to promote efficient use of resources and providing support for other critical functions. Its role in an economy cannot be overemphasize as its serves as an instrument of organizational planning and control process. This budget serves as an important tool for resource mobilization, allocation, fiscal and economic management. It is an economic tool for facilitating and realizing the vision of an organization in a given fiscal year, and if a budget is to serves as an effective tool, proper linkages and management of all the stages of budgeting is necessary, Kazeem et al., (2014). The survival of such organizations and efficient service delivery however, depends on its ability to control and or manage this finance with proper implementation of the budget. This becomes the major challenge as many organizations becomes handicapped in detecting the bottlenecks, inefficiencies and or corruption in the transfer and implementation of same, thus, resulting into inability to ensuring transparency, accountability and effectiveness of budgeting and its management. These inefficiencies arise mostly from the budget implementation. From the above fact, the need for automated budgeting and budget tracking has become significantly important, particularly in financial organizations, private and government agencies. However none or little of such is considered. In most cases finances are acquired, budgeted and disbursed without proper monitoring to ensure strict adherence or compliance to the specified budget. In some cases where this is
13 done, many do it manually. This however gives room for deficits, delay in budget delivery, misappropriation of funds and erroneous computations. This work therefore, attempts to take a look at the methods adopted for budgets analysis or would be likely adopted for budgets analysis in institutions like the Nigeria Universities. 1.2 Statement of the Problem Organizational budgeting and budget tracking has been done manually over time, which is associated with too many inefficiencies/irregularities and delay in the budget processes. Figures are not an easy task in places when there are no sophisticated methods of budget analysis. Inefficient and insufficient records will always result to a poor and inaccurate budget. The fact that humans can’t tackle the ambiguous calculations and complex allocation involved in budget analysis easily without the help from computer this is also a delay factor for the releasing of an accurate budget statement. In Nigeria Universities, the budgeting processes ranging from the collection of proposed budget, recommendation and approval which is manually done suffers a lot of irregularities and delay in the implementation of same. To address this, there is need for the development of an efficient system to facilitate and enforce accuracy,
14 timeliness, and proper tracking/backup of the Universities budget and its implementation. 1.3 Aim and Objectives The aim of this project is to design and implement an efficient computerization of budget management system for Nigeria Universities with the following specific objectives: 1. To design an algorithm to facilitate the budget tracking process of Nigeria University 2. To implement the design using MYSQL as a relational database for the back end engine and PHP, JAVA SCRIPT as a scripting language for the front end engine. 1.4 Significance of the Study Budget analysis is very important with our everyday life as it is also very important for us as humans to have a daily budget which guides our spending so also it is important at the end of the day to give an account of such spending which is in other words an analysis of our expenditure. This is an important move for every organization. For an organization to survive it must plan ahead the amount it will receive and how it will allocate the money to different departments and how such money should be spent. This is budgeting and the analysis is just a step to make sure
15 it works. Hence this budget analysis should be of immense importance to government, institutions and even individuals. For government organization like the given case study, this work could serve as an eye opener to them by carefully exposing the problem inherent in budgets analysis and recommending, the solution this would help them to avoid wasteful spending through budgets deficits. To private organization or companies this would also be of immense help to them as they adjust themselves to the defect of economy by careful planning execution. To individuals and share holder in companies, this work will enable them know why companies and governments have tended to spend more than they budgeted for, while it will also act as a bedrock for other kinds of work similar to this or embarked by other researchers. 1.5 Scope of the Study This work covers only the operational budget of the budgeting department of The Nigeria Universities. This is with the fact that, the, said institutions happens to be among those that suffer most inefficiencies and irregularities in the management of finance and budget implementations. Also, financial and time constraint has mandated it due to the nature of the research work.
16 1.6 Definition of Terms Budget: Budget as the formal expression of plans, goals, and objectives of Management that covers all aspects of operations for a designated time period. Budgeting: Type of financial planning in accounting and control of incomes and expenses received from company activities at all levels of operational management, budgeting is simply balancing your expenses with your income. Budget analysis: This is the process of breaking the whole budgets into separate units or parts with the sole aim of identifying and studying the structure of each part so that we can detect errors, and possible solutions to such errors. Tracking: Monitoring and controlling the operation or flow of an activity or object. File: An organized collection of information or related fields. Efficient: Achieving maximum results with minimum wasted effort or expense. Management: Process of administering and controlling the affairs of an organization. Computerization: The process of replacing manual way of doing things with machine most call it modification. Program: A set of instruction combined together to make meaning, and is usually a command to a computer system to carry out.
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18 LITERATURE REVIEW 2.1 Overview of Budget and Budgeting Every organization (private or public firms) depends on a well-planned logical outline of processes for a profitable survival and operation. These logically planned processes or strategies for personnel selection/management, machinery/equipment purchase & maintenance and finance acquisition/disbursement has become the major point of concern in today’s labor. The process of organization, planning, acquisition and disbursement is termed budget. The budget is based upon projected revenues from various sources, inclusive of internally generated income and grants. The budget is also seen as a quantitative picture of the plan characterizing incomes and expenses within a certain period, and equity which needs to be attracted to achieve planned goals. Budget items are used to plan future financial transactions, i.e. the budget is created before completing expected actions. It also determines a budget role as base for control and efficiency assessment of company’s financial activities Tatiana et al., (2016). However, Yang (2010) opined that, budget is a detailed and quantitative plan. It shows information about the acquisition and use of financial and other resources over a specific time period; either a long-range period (two- to ten-year) or a shortterm period (one-to two-year) or monthly, or daily-bases.
19 In the same vein Garisson et al., (2003) contend a public budget as a statically financial plan or blueprint. He refers the act of preparing a public budget/or the activities of predicting and qualifying future requirements for government finance as budgeting. The essence of budgeting is to develop the plans of production financial activities of the company, its divisions proceeding from current and strategic objectives of functioning, to control the implementation of these plans and to correct deviations from parameters. In the information aspect budgeting represents the system which integrates the results of planning processes, accounting, control and analysis of cost indicators of company activity Bocharov, (2013). According to Mc Bain (1999) cited in Akintoye (2008) budgeting is not a substitute for effective decision making but the managers’ planning tool and budgeting is one of the most effective tools of communication and integration Silva et al., (2012). GFOA, (1998) the mission of budgeting process is to help decision makers make informed choices for the provision of services and capital assets and to promote stakeholder participation in the decision process. According to Amey (1979) and Bremser (1988) and Douglas (1994) and Yang (2010) budgeting in business organizations serves multiple purposes and functions but attention is given to two basic roles of budgetary systems, financial planning and control process, the socalled dual propose Budgeting with its multiple functions triggers a series of
20 activities from the narrowest to the broadest, associates with financial planning, control, evaluating, coordinating and communicating within different departments of the organization when fully adopted. Shim &Siegel (2005) in their book “Budgeting Basics and Beyond” sees budget as the formal expression of plans, goals, and objectives of management that covers all aspects of operations for a designated time period. As a tool providing targets and direction, budgets provide control over the immediate environment, help to master the financial aspects of the job and department, solve problems before they occur, hence focusing the importance of evaluating alternative actions before decisions are actually implemented. They stressed that budgeting technique, when used effectively, is capable of resulting into systematic, productive management while facilitating control and communication and also providing motivation to employees. This also allocates funds to achieve desired outcomes, spanning any period of time. It may be short term (one year or less, which is usually the case), intermediate term (two to three years), or long term (three years or more). Short term budgets provide greater detail and specifics. Intermediate budgets examine the projects the company currently is undertaking and start the programs necessary to achieve long-term objectives. Long-term plans are very broad and may be translated into short-term plans.
21 Relying on the opinions of outstanding economists, it is possible to identify a concept “budgeting” as a type of planning, control and analysis of material, financial and other resources consumed and created by a company in the course of economic activity Paramasivan & Subramanian, (2009). In the researcher’s opinion, budgeting is a type of financial planning in accounting and control of incomes and expenses received from company activities at all levels of operational management that allows analyzing target financial performance and managing material and financial resources of a certain activity and a company in general. 2.2 Budget Tracking Budgeting and Budget Tracking involves planning/controlling, recording and analyzing the incomes and expenses of a person or an organization over a particular period of time. According to Malena et al., (2009), public expenditure tracking involves tracing the flow of public resources for the provision of public goods or services from origin to destination. In his paper Public Expenditure and Budgets, he tries to identify the problems and weaknesses in systems of public expenditure, transfer and service delivery. In the attempt he ensured the undertaken of expenditure tracking at local, district and sub-national level. The resources flow was tracked from the highest level of government to the final beneficiaries by the Researcher’s at both the national and grassroots level.
22 In same vein, Kazeem et al., (2014) developed a Budgetary and Management Control System to provide a first defence against theft and gross misappropriation, this was to help lawmakers’ direct public resources where they can give the best public return, aid managers efficiently utilize resources under their control, and as well communicate plans and results to the public. However it was discovered that, the budgetary statements of nearly the past quarter half century suggest the vital nature of process to both political and technical outcomes. This makes budgeting process difficult due to easy movement between political and technical process that result to no single measure of public welfare that applies across all public services. In addition, the elected officials generally care more about the political party and people they represent, i.e. the ones who directly or indirectly vote them in, than they do for the general public welfare. The desire for such a yard stick has in some ways, been the challenges of budgeting since fund made for specific project are diverted to the point of interest. These become the inherent complications of getting a budgetary control system that generates improvements in the common welfare of the people. Jaćimović and Fonseca (2017) as part of their budget tracking study discovered that the absence of legislation that promotes free access to information could serve as a hindrance to successful budget tracking. This was exemplified by the difficulties that were faced in trying to obtain information from official sources. This also indicates
23 that perhaps the information gatekeepers at the Ministries and Agencies have not been sufficiently sensitized on the relevance of budget tracking as a monitoring and evaluation tool, as well as the usefulness of tracking results for Government planning and project prioritization. It was argued that WASH sector performance monitoring systems if impact is to be seen on improving service delivery needs to be strengthened overall and used in the sector as a whole, and not for specific projects, since Tracking financial flows will only be beneficial within a broader framework of sector dialogue and with change endorsed by government. They stressed that the exercise needs to depart from an improvement strategy and build upon existing reforms. Many other home budgeting tools has also been developed (such as butterbudgeting.com; mybudgetkeeper.com) RLT Family Budget, (2003) but most of them are locally based, that does not support online base. Among them is the FKJ Software developed in 2005 to track household budget. The tool runs on the local computer, supporting only one user at a time mainly because of security reasons. The system was developed on Visual Basic.Net and run on Windows platform however, does not support online operation and backup FKJ Software, (2005). Moreover, Bekaroo and Sunhaloo (2007) developed a system, The Intelligent Online Budget Tracker to create a clear picture of the financial situation of the members by recording and keeping track of their expenditures as it happens. The online
24 application enables users to have access to their home budget anytime and from anywhere, reducing existing budget problems (paperwork) and providing means for budget analysis and giving instant and accurate feedback. The Intelligent Online Budget Tracker was used to calculate and predict important issues like profit margin and deviations or bankruptcy prediction. It however does not enable budgeting and offline access and monitoring. From the review however, the challenges encountered was due to the fact that i. Most methods employed for tracking was interviews and technical reviews of financial records to trace the flow of funds from source to final destination. ii. Manual approach of budget processes which is vulnerable to funds reconfiguration after budget approval, insecurity as well as irregularities due to manual processes. iii. Improper backup system of the budget. From the review above, the proposed project budgeting and budget tracking system (BBTS) will however address the challenges enlisted by developing a system that will facilitate the budgeting and monitoring of the income and expenses of the organization. 2.3 Budgeting Techniques The term budgeting techniques was expressed to consist of the particular analytical
25 and the procedural method used in the preparation of budgets Amamieyenimighan, (2009). Budgeting techniques could be termed as methods or manners of analyzing a budget in a detailed format. The selection of any particular technique depends on the purpose for which the budget is meant to serve. Some techniques emphasize the use of allocation. Some need rigorous efforts to manage while others could be less rigorous. Some techniques lay emphasis on expenses on items while others focus on collaborative budgeting. Different schools of thoughts identified various techniques of budgeting systems. These include: 2.3.1 Line-Item Budgeting System The line-item budgeting system has been described as a budgeting technique in the public sector which focuses on items or expenditure headings and it has a line which is drawn towards the budgeted amount for the fiscal year under consideration Durosaro, (2002). The International Bank (1998) explained that in a line-item budgeting, expenditures for the year under consideration are highlighted according to objects of expenditures. The line-items are often detailed and they specify the amount of money a particular office would be permitted to expend on personnel, fringe benefits, travelling, equipment and the like for the coming year. From the historical analysis, the International Bank (1998) recorded that before the late 19th century, budgeting was characterized by weak executive power and little central control. The line-item budgeting system could then be described as a reform
26 which emanated out of a concern that there was inadequate expenditure control which was opined to have contributed to an environment whereby with a tendency for increasing problem of substantial corruption. Consequently, the budget reformers of 19th and early 20th century opted for a type of budgeting that would promote accountability of the detailed use of resources. These early budget reformers focused on the effective control, laying foundation for sound economy as well as efficiency which is the primary goal of budgeting. No wonder Omopariola (2003) opined that the major purpose of line-item is to control unauthorized expenditure. Budget technocrats regarded the line-item as the simplest of all the techniques because it is easy to prepare and understand. However, the weaknesses of line-item budgeting as identified by Hull University Business School (nd.) reflect in its rigidity during implementation. Also, there is no clear performance and objective of expenditure highlighted. In other words, under the line-item budgeting there is no information on the efficiency and effectiveness of enlisted programme or about why money was spent on items. As observed by budget technocrats, the line-item system would not be easy to operate in large business organization with various and interrelated activities to perform. Perhaps, this made Hull University Business School (nd.) to be adaptable with the increasing demands being associated with continuous expansion of government activities.
27 2.3.2 Incremental Budgeting System Obayan (2006) explained that incremental budgeting system is a process whereby an anticipated increase by a certain amount or percentage is added to the previous period’s budget for the new period. In other words, this technique of incremental budgeting is a process which makes use of a previous year’s budget and actual figures as the basis for succeeding year’s budget. As highlighted by Tutor2u (nd), this budgeting system is gradual and easy to understand. Also, the impact of change could be easily detected. Obayan (2006) however faulted the Nigerian budgetary procedure which is characterized by secrecy and bargaining activities and is mostly based on incrementalism. More so, incrementalism has its shortcomings which include ‘spending it all’ habit towards the end of the year so that the budget increases in the coming year. This procedure encourages corruption and financial indiscipline. In view of this, it does not allow creativity for new ideas and reduction of costs. 2.3.3 Planning, Programming, Budgeting System (PPBS) (PPBS) is opined by budget reformers as an alternative to incremental budgeting system. Its primary focus is to unify planning, programming and budgeting. As the name implies, PPBS involves the following steps of making budget: 1. Planning: where programme goals are defined and to determine whether some particular course of action would add more to the achievement of
28 organizational goals than its different alternatives 2. Programming: where various alternatives of achieving the goals are identified. 3. Budgeting: where there is concern on how to secure adequate revenue or sufficient funds to put the programme into operation, 4. Operation: where organizational programmes are carried out or implemented 5. Evaluation: where the worth of operating programme is assessed, costs and benefits are evaluated and the best alternatives are adopted for implementation (Don Vito, 1969; www2.fiu.edu/~ganapati/3003/budget). The emergence of PPBS arose from the shortcomings of the incremental budgeting system which lacked objective rationality. So, it was deemed fit to introduce a system which would include quantifiable rational objectives, hence the introduction of PPBS Obayan, (2006). Hull University (1969) recorded that PPBS emphasizes rational allocation of resources. Obayan (2006) recorded the application of PPBS in Nigeria during the 1981 budget proposals by President Shehu Shagari. Although the intention by the President was well highlighted, the programme did not seem to have made much impact on the budgetary process. Some of the major shortcomings of the PPBS are that it centers on planning activities. It involves rational allocation of resources and removes barriers between organizations. Also the budget becomes centralized and it is a top-down budget composition. Planning programming budgeting system has been fraught to be more
29 of academic exercise than of practical application as it calls for service of an expert which could be successfully practiced in an environment with a planned economy. 2.3.4 Zero-Based Budgeting System (ZBB) Zero-based budgeting system was described by the International Bank for Reconstruction and Development (1998) as a process of making a budget from the scratch at every budgeting year. As the name implies, ZBB means the making of a new budget at a zero point at every succeeding year whereby no past expenditures are taken into consideration. It was further explained that each activity programme must justify its reason on papers for requesting for funds. Hence, ZBB is based on the development and ranking of decision packages and choosing the most important package in line with the institutional objectives and order of priorities. Adebisi (2005) enumerated that the steps to be followed in implementing zero-based budgeting system are to: 1. Formulate operational plan by identifying each decision unit and dividing the organization into suitable parts with specific objectives and result, 2. Develop decision packages on the basis of the decision units where costs are attached to each activity and then assess the effect of non-performance of the activity, 3. Rank decision packages in order of priority at each operational level, 4. Decide which packages to be added and those to be eliminated,
30 5. Compare list of packages in order of importance and align them with the available resources. Zero-Based Budgeting helps managers to frequently examine programmes carefully and reject low priority activities but develop more effective programmes. Zero-based budgeting system approach stresses the effective use of resources. However its shortcomings are that, it is difficult to implement as it is not easy to develop and make decision units and packages; it is time consuming and requires too much paper work. Zero-based budgeting system could be conveniently applied where tenure positions are practiced, in personnel services which involve annual appointment and disengagement and also in agricultural services which require annual production. 2.4 Studies on Budgeting Systems The importance of budgeting systems in universities and their implications have been established by researchers. For instance, Tayib & Hussin (nd.), in an empirical study on good budgeting practices in eight Malaysian public universities, found out that 90 percent indicated that the budget is a vital aspect in management for operating and measuring performance. Also from Table 1, about 72 percent of the respondents agreed that their universities had realistic and achievable long terms goals in respect of their university budget.
31 Table 1: Long-term Goals of the Budget in Malaysian Public Universities Source: Tayib & Hussin (nd) It was found out that Malaysian public universities have reasonable long-term goals of the budget. Moreover, Wilson (2000), in a report of the University of New Hampshire in the USA stated that the university completed a project to re-organize and improve administrative services through process of redesigning and maximizing the use of technology. Part of their effort involved the creation of 18 Business Service Centre through which the institution’s accounting and business transactions flow. The establishment of these centre provided a natural foundation from which the University implemented a budget model that decentralizes more accountability and authority. Wilson (2000) further reported that the University of New Hampshire, after three years of researching the feasibility of a decentralized budgeting structure, implemented its own version of decentralized budgeting known as Responsibility Centre Management (RCM) Wilson, (2000). Oduwaiye (2004), while explaining the numerous roles of academic staff in administrative positions, included budgetDisagree Neutral Agree Means Realistic and Achievable 4.1% 24.5% 71.5% 3.95 Understandable act towards achieving goals 3.1% 18.4% 78.6% 4.00 Budgeting in parallel with strategy 8.2% 14.3% 77.6% 3.93 Strategy should consider uncertainty and uncontrollable factors 1.0% 17.3% 18.6% 4.07 Budgeting is a vital tool in management 1.0% 9.2% 89.8% 4.38
32 making as one of the administrative functions to be performed by academic staff. Ovwigho (2004) opined that for a budget to be effectively used as an instrument of control in the process of financial management, it should lead to a balance in the means and objectives of the institution. Therefore, a good budgeting procedure should highlight the proposed programmes, their costs and how costs would be met. Linn (nd) investigated budgeting systems which were used in allocating resources to libraries in some universities in the United States of America. The purpose was to provide information about the different budgeting systems that were used to allocate resources to libraries. The types of budgeting systems covered in the study included incremental, line-item, formula, mathematical, zero-based, performance-based, responsibility centre, initiative-based and planning, programming budgeting systems. The findings were that numerous types of budgeting systems are used to allocate resources to libraries and each of them functions differently. 2.5 Nigerian University Budgeting System In table two (2), it shows that the four budgeting systems namely incremental budgeting system, line-item budgeting system, planning programming budgeting system and zero-based budgeting system with the following percentages of 41.67, 33.33 , 16.67 and 8.33, respectively, were being adopted in universities in SouthWest Nigeria. This implies that incremental budgeting system which had the highest percentage of 41.67% was being practiced majorly by universities in the South-West
33 Nigeria. Table 2: Budgeting Systems Practiced University Incremental Zero-Based Line-Item PPBS OOU YES N/A YES N/A FUTA YES N/A YES N/A LAUTECH YES N/A YES YES EKTSU YES N/A N/A N/A FUNAAB N/A N/A YES YES UI N/A YES N/A N/A OAU YES N/A N/A N/A Number of universities that practiced each budgeting system 5 1 4 2 % of budgeting system as adopted 41.67 8.33 33.33 16.67 This agreed with the finding of Obanya (2006) that Nigerian university system adopts the main incremental system of budgeting using the NUC formulae or parameters. Perhaps the administrators in those universities exploited the advantages of incremental budgeting system and found it more convenient in the sense that incremental budgeting system is easier to prepare. The finding further supports the view of Obanya (2006) that despite the criticism of incremental budgeting system, most budgeting system cannot avoid the incremental approach, however limited. Table 2 also shows that apart from the incremental budgeting system, other types of budgeting systems namely line- item budgeting system, planning programming budgeting system and zero- based budgeting system were found to be adopted by universities in South- West Nigeria. This supported the study on budgeting in
34 Malaysia by Borgia and Coyner (1996) that apart from the incremental budgeting system which was majorly adopted by Malaysian universities, other budgeting systems which included zero-based budgeting system and planning, and programming budgeting system were also found in higher education budgetary systems in Malaysia. Moreover, from the field work, all the universities found the adopted budgeting system as being most effective in meeting their university goals. This could mean that all the universities had made use of the advantages of the adopted budgeting systems maximally to the best of their knowledge. It could be inferred that the personnel in charge had efficiently made use of their expertise and experience to ensure that the weaknesses or disadvantages in the adopted budgeting system were averted. Hence, in summary, the administrators were satisfied with the adopted budgeting system in their institutions. 2.6 Efficient of Computerized Budgeting The size and complexity of universities today call for rapid and efficient methods of budget planning, analysis and their management. Budgeting has been a major part of forecasting how companies spend their money throughout the fiscal year. Kobie (2009), In most companies, the words “its budget time”, strike fear in the hearts of employees. Financial officers and management accountants brace themselves for reconciling reams of spreadsheets that may reveal wildly different
35 data depending on order and configuration. Non finance employees in various divisions scurry to understand their role in the budgeting process and struggled to pull together the facts and figures they hoped would appear attractive to management. Traditional budgeting was carried out on a pad and pen, archived in countless journals and ledgers and often stored in boxes and crates. Retrieval was a difficult task. Today computerized budgeting (E-Budgeting) solutions as streamlines and transformed the budgeting process at all levels of an organization. This research will show the factors that contribute to everyday individuals to government; that are now using (E-Budgeting) for accurate budget and bookkeeping strategies before the days of calculators, computers and internet, companies has to budget their finance the old fashioned way. Steve Hornyak of Management Accounting explains: “The biggest drawback of traditional budgeting systems is the inability of participating individuals to access and use historical data during the budgeting and planning process. In fact, employees or managers attempting to allocate their sliver of the company funds often work in a vacuum. Without access to historical budgeting information, creating a budget from the ground up or making alterations to the existing budget may become tedious--and sometimes futile—tasks for non finance users” Hornyak (1998).
36 Ian Henderson of Management Accounting Magazine states: “The majority of the problems encountered with budgeting arise from the managing the process itself…The choice for large [organizations] is either to lose many of the undoubted benefits in planning and control offered by budgeting or to apply a software solution to the process and make it less troublesome, less costly and more effective” Henderson (1997). Computerized budgeting allows departments using the same program, to bring all figures into one general location, saving countless man hours. With the introduction of advance data-entry techniques, the under taking of budgeting each year became easier and easier. Computers helped add and subtract much faster and more accurately, so entry key figures in a spread sheet became the wave of the future. It helped create exact figures making pie charts, line graphs and other figure representatives accurate. E-Budgeting has many different aspects and facets. The most useful part of e-budgeting is that it completely automates the budgeting process. Steve Hornyak (2008) defines e-budgeting: “An e-budgeting solution completely automates the development of an organization's budget and forecast. Web-based enterprise budgeting systems offer a centrally administered system that provides easy-to-use, flexible tools for the end users who are responsible for budgeting” Hornyak, (2008). The author of the article points out how the technology computerizes the process of making an effective budget. This helps anyone from a
37 small family to a government department with the means of tracking and monitoring a budget. As technology continued to advance, these methods became easier to obtain and utilize. Anyone from the smallest Mom & Pop Store to government officials could enter the necessary information and see exactly how and where their money was going to be divided. Once the internet was created, companies could create inter-office emails and memos making sharing the information that much easier. Companies were able to save money and focus man power more effectively with each new and improved software addition. Most programs used to make budgets that are available to the general public are stand alone applications. These programs stay on the same computer they were created, and don’t need to interact with other software or computers on a related network or the internet. The data created and stored on these programs also stay in one centralized location. 2.7 Online Computerization of Budgeting Having budgeting tools that are able to integrate with other financial programs or systems is quite a useful feature. Companies have learned how to create tools and make the entire financing process become one easy process. A company out of Richmond, VA, the Bookkeeping Department, created a product with the same qualities. Accounting Technology Magazine explains: “Key to the success of the Bookkeeping Department is the Deployment of an electronic document management
38 solution that integrates with the most prevalent SMB [Small-to-Medium Business] accounting system, intuit’s QuickBooks.” (SR25, 2008), President of the Bookkeeping Department, found the perfect integrated solution in CNG-Books, Cabinet NCi’s electronic document management system that streamlines Quick-Books data entry and document filling into one consistent and efficient electronic process. By uniting Quick-Books transactions with business documents, CNG-Books makes filling, locating, and sharing documents simple, seamless, and secure. This new program is an excellent example of how financial agencies and departments are able to share information and help ease the process of bookkeeping. Development of computers in the modern society and associating with it computerization of budgeting is characterized by a massive proliferation of Information and Communication Technologies (ICT). Computerization of budgeting achieves two strategic objectives. First, it improves the efficiency of all types of budgeting activities through the use of ICT tools and technologies. Secondly, it improves the quality of training enhancing it with a new type of thinking which is relevant to the information society. Wayne Shulz of Accounting Technology Magazine explains: “Even the best payroll staff can make mistakes with the confusing array of payroll tax deposit rules. Nearly every payroll processing company protects you against costly tax deposit penalties and interest by
39 guaranteeing timeliness of your online tax payments…if there’s a mistake in computation or timeliness, the processor pays and not your company” Shulz, (2009). This shows how using computers and having interacting financial agencies saves companies money. Computerization of budgeting is generally aimed at improving the existing traditional approach of budgeting and management, Jonsson & Akerlund (2012). Traditional budgeting has had its share of inefficiencies and flaws in the past. Today, newer technologies and faster computing methods have helped to alleviate most, if not all, of those issues. With the recent growing popularity of going green, many companies have taken conserving resources to heart. AccountancyMagazine.com continues: “Going green can save money as well as the planet, but it can be difficult to know where to begin, so the sustainable business experts at Environwise are offering help in the form of an interactive online tool.” It allows businesses to get the information they need to get started quickly and easily, ’said spokesperson Mary Leonard,’ highlighting those measures that are likely to provide them with the greatest cost-savings benefits in the areas most relevant to their business’” Henderson, (2009). Technology continues to evolves and we the society seem to be entering the age of ubiquitous computing, it is impossible to assess at this stage how cloud computing and the development of the concept of ubiquitous computing would affect the area of budgeting, but there is no doubt that
40 many of these technologies have the potential to significantly improve the quality of the budgeting system in the society. 2.8 Budget Monitoring and Control According to Wright and Wright (2008), Budget monitoring, control and evaluation are necessary for closer supervision of work programs and projects. This involves a continuous monitoring of the plans and budget in order to identify achievements and bottlenecks. Basically, monitoring, control and evaluation focus on:- Accountability – to ascertain appropriateness of expenditure and revenue and their conformity to the authorities through financial reports; and, Management assistance – for providing management with information on performance. 2.8.1 Mechanisms for control and monitoring According to Wright and Wright (2008), Specific formats have been useful in budget monitoring and follow up, they include: Internal Audit; External Audit; Parliamentary control; Budget Review and Adjustments; and, Project inspection.
41 However, the overall control and monitoring of public expenditure is now affected largely through an Integrated Financial management System (IFMS). 2.9 Types, advantages and disadvantages of Budgets 2.9.1 Types of budgets According to Brynes (2005), budgets serve different purposes, different types of budgets have been developed. The following are the different classification of budgets developed on the basis of time, functions, and flexibility or capacity. (A) Classification on the Basis of Time 1. Long-Term Budgets: Long-term budgets are prepared for a longer period varies between five to ten years. It is usually developed by the top level management. These budgets summarize the general plan of operations and its expected consequences. Long-Term Budgets are prepared for important activities like composition of its capital expenditure, new product development and research, long-term finance etc. 2. Short-Term Budgets: These budgets are usually prepared for a period of one year. Sometimes they may be prepared for shorter period as for quarterly or half yearly. The scope of budgeting activity may vary considerably among different organization. 3. Current Budgets: Current budgets are prepared for the current operations of the business and the planning period of this budget is generally in months or weeks. Current budget is a budget which is established for use over a short
42 period of time and related to current conditions. (B) Classification on the Basis of Function 1. Functional Budget: The functional budget is one which relates to any of the functions of an organization. The number of functional budgets depends upon the size and nature of business. The following are the commonly used: 1. Sales Budget 2. Purchase Budget 3. Production Budget 4. Selling and Distribution Cost Budget 5. Labor Cost Budget 6. Cash Budget 7. Capital Expenditure Budget 2. Master Budget: The Master Budget is a summary budget. This budget encompasses all the functional activities into one harmonious unit. The ICMA England defines a Master Budget as the summary budget incorporating its functional budgets, which is finally approved, adopted and employed. (C) Classification on the Basis of Capacity 1. Fixed Budget: A fixed budget is designed to remain unchanged irrespective of the level of activity actually attained. 2. Flexible Budget: A flexible budget is a budget which is designed to change
43 in accordance with the various level of activity actually attained. The flexible budget also called as Variable Budget or Sliding Scale Budget, takes both fixed, variable and semi fixed manufacturing costs into account. 2.9.2 Advantages of Budgets Budgeting involves cost and time to prepare. The benefits of budgeting must outweigh the drawbacks. A budget can be advantageous because it: 1. Communicates to managers what is expected of them. Any problems in communication and working relationships are identified. Resources and requirements are identified. 2. Improves managerial decision making because emphasis is on future events and associated opportunities. 3. Encourages delegation of responsibility and enables managers to focus more on the specifics of their plans and how realistic the plans are, and how such plans may be effectively achieved. 4. Helps management become aware of the problems faced by lower levels within the organization. It promotes labor relations. 5. Fosters careful study before making decisions. 6. Allows management to monitor, control, and direct activities within the company. Performance standards act as incentives to perform more effectively.
44 7. Helps identify on a timely basis weaknesses in the organizational structure. There is early notice of dangers or departures from forecasts. The formulation and administration of budgets pinpoints communication weaknesses, assigns responsibility, and improves working relationships. Communication weaknesses, assigns responsibility, and improves working relationships. 8. Allows for thinking how to make operations and resources more productive, efficient, competitive, and profitable. It leads to cost reduction. 2.9.3 Disadvantages of Budgets 1. A budget promotes gamesmanship in that those managers, who significantly inflate requests, knowing they will be reduced, are in effect rewarded by getting what they probably really wanted. 2. A budget may reward managers who set modest goals and penalize those who set ambitious goals that are missed. 3. There is judgment and subjectivity in the budgeting process. 4. Managers may consider that budgets redirect their flexibility to adjust to changing conditions. 5. A budget does not consider quality and customer services.
45 ANALYSIS AND DESIGN 3.1 System Analysis System analysis is the process of collecting and interpreting facts, identifying problems, and decomposition of a system into its components. System analysis is conducted for the purpose of studying a system or its parts in order to identify its objectives. It’s a problem solving technique that improves the system and ensures that all the components of the system work efficiently to accomplish their purpose. Concerning the research, the budgeting and the tracking system are studied here with respect to limitations, and lapses encountered in same. From the study, the analyses are made as thus; 3.1.1 Fact finding This is the formal process of using research, interviews, observation, questionnaire, prototyping, joint requirements planning and other techniques to collect information about systems requirement and performance. It is also called information gathering or data collection. For this research, the following techniques were adopted for the purpose of gathering the required facts; A. Observation: The observation technique is a method whereby the researcher take off time to visually study the behavior of individuals and how various activities were being carried out; in the process of data collection through observation, the procedures and processes of obtaining a complete budget report and how budgeting and tracking is done is directly observed. This method supplemented other methods
46 of data collection and at the same time gives an opportunity for verification of certain information obtained using other methods of data collection. B. Interview: This helped in capturing the perspectives of Staff in budget office, budgeting experts, researchers and academicians. For example, interview with staff under budget unit of bursary department, Nigeria Universities provided information about budget planning. C. Record Inspection: This has to do with the collection of information from past research and the study of manual system that has been in use for budgeting and tracking of same. Information from the past research about topic under study was collected from journal articles and books. This will assist in having the insight of the requirements of the analysis and tools that will be employed to develop the budgeting and budget tracking system. D. Internet: The information about past research, computer journals and reference books was collected by the use of internet. 3.1.2 Analysis of the existing system This is the breakdown of a given problem into it component parts. The purpose is to ensure a clearer understanding of the systems basic elements, their relationships and expose the area of the system that needs to be improved on. From the facts gathered
47 during fact finding, it was discovered that the existing system had several challenges some of which are outlined under the next heading. 3.1.3 Problems of the existing system The existing system is faced with the following challenges i. Manual approach of budget proposal collation, recommendation and approval which is vulnerable to omissions, redundancies, inaccuracy (irregularities) and Funds reconfiguration during and or after budget approval. ii. Improper/Unsecured backup system of the budget lifecycle. iii. Delay in budget processing life cycle (from budget secular distribution, submission of proposals, and recommendation to budget approval) and late implementation of budget, which is one of the major causes of organizational breakdown. 3.1.4 Advantages of the new system The new system has the following edge over the old system i. The new system will facilitate the budget proposals collation, recommendation and approval process since all the process required is automated with flexibility, user friendliness and prompt response.
48 ii. This system will enhance the security of budgeted records by restricting access to unauthorized users, maintaining proper and secured backup, preventing loss of data due to natural tragedies. iii. It will also ensure the speedy budgeting and implementation process, since it does not requires physical movement of files and can be accessed anywhere, anytime provided one is an authorized user iv. Moreover, it will reduce the amount of deficit run by the institution since every amount disbursed is properly recorded and strict adherent to the allocated amount is ensured to prevent overdraft. v. In addition to the fore mentioned, it will reduce the cost of running budgeting lifecycle. 3.2 Modeling of the New System The new system model used to implement the budgeting and budget tracking system is Object Oriented Model. An object is part of a system that contains encapsulated data and procedures grouped together to represent an entity. It captures the goal of the users and the responsibility of the system to its users. 3.2.1 Unified Modeling Language The Unified Modeling Language (UML) is a graphical language for visualizing specifying, constructing, and documenting the objects of a software-intensive system and generally the system’s architectural blue print in a diagram. The Unified modeling Language (UML) is a general-purpose modeling language in the field of
49 software engineering which is designed to provide a standard way to visualize the design of a system (Anderson, 2005). This system is modeled however with the use of three standard unified modeling language (UML) tools; Use case diagram, activity diagram and dataflow diagram. A. Use case In designing the budgeting and budget tracking system, the use case technique is used to describe the functionality of the system. Each use case represents a specific flow of events in the system and therefore each description of a use case defines what happens when the use case is performed. The use case diagram displays the relationship among actors. Actors are the various sections/departments or heads (users), administrator or boards of budgeting and the role they play. The Figure 1 shows the use case diagram of the system under discuss.
50 Figure 1: use case diagram for BBTS. Logout Login Add department View department Recommend budget View proposals Propose budget Approve budget View budget approved Delete record Add user/bob View budget summary Expense request Approve expense Budgeting and Budget Tracking System User Admin BoB