Budgeting Process and Budget Performance in Non Profit Making Organizations a Case Study of Caritas- Masaka Diocesan Development Organization (Maddo)

Abstract

Budgeting is an essential activity in business operations and has a great bearing on performance (Ackah & Agboyi, 2014; Hatten, 2015; Kariuki, 2010; Dropkin et al. 2011).

The researcher focused on investigating the budgeting process and budget performance in non profit making organizations; a case study of Caritas- Masaka Diocesan Development Organization (MADDO). The objectives of the study included; to establish the effect of budget planning on budget performance of Caritas MADDO, to establish the effect of Participation and feedback on budget performance of Caritas MADDO and to examine the effect of budgetary control on budget performance of Caritas.

The study was inspired by the expectancy theory of motivationdeveloped by Victor H Vroom and expanded and refined by Poter and Lawler and other. In order to have an in-depth study,the study took a descriptive case study research design to establish the relationship between the independent variable (Budgeting process) and the dependent variable (Budget performance).

Results of the study show that budgetary planning affects budget expenditure effectiveness and therefore influence budget performance of Caritas MADDO; budgetary control does not significantly influence any of the elements of performance and therefore doesn‘t affect the budget performance of Caritas MADDO; participation and feedback affects both revenue and expenditure effectiveness, and therefore highly influences the budget performance of Caritas MADDO. It can be said that among all factors, budget participation and feedback is the most important element of the budget process and it has showed significant interactions with all elements of budget performance. Recommendations include but not limited to; Upholding and strengthening planning, control and Level of feedback and participation as they measured and explained the budgeting process. The need for regular or periodic meetings at departmental and project level. There is need for the budgeting process for the different units /departments to be conducted in a workshop / unit meeting setting so as to enhance participation of all the staff in the respective budgeting units. The organization should create a self –governance framework that subdivides the hierarchical organizational structure into smaller self-managing units with managers that have authority to run their units as they see fit.

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