Contribution of Budgeting and Budgetary Control to the financial Performance of Selected Local Non Governmental Organisations (NGOs) in Uganda
Kifubangabo, Fred Ganda
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This study investigated the relationship between budgeting and budgetary control as independent variables and financial performance as a dependent variable in the locally founded non-governmental organizations (NGOs) in Uganda. It specifically examined the relationship between: budgeting and NGO financial performance; budgetary control and NGO financial performance and the effect of donor policy on the relationship between budgeting, budgetary control and NGO financial performance. The wide spread concern about many NGOs’ failure to achieve expected financial performance targets as argued by Moore (2005) prompted the researcher to investigate the cause of poor financial performance of many NGOs in Uganda yet they control about 50% of the national budget. The study employed a correlation research design which sought to establish the contribution of budgeting and budgetary control on financial performance of local NGOs in Uganda. It used quantitative and qualitative approaches due to the need to collect both numerical and qualitative data. Thus, questionnaires and interview guide were the major data collection instruments used. The study consisted of 15 human rights NGOs purposively selected from Nakawa and Central divisions in Kampala district. From a total population of 210 stakeholders, a sample size of 67 participants was purposively selected. Frequencies, percentages and correlations analyzed quantitative data while qualitative analysis involved summarizing information into meaningful themes. The study found significant positive relationships between budgeting and NGO financial performance (r = .737) and budgetary control and NGO financial performance (r = .660). Controlling donor policy, the strength in these relationships reduced to 0.710 and 0.612 respectively. It was concluded that donor policy compromises the contribution of budgeting and budgetary control on NGOs’ financial performance. Thus, it is recommended that NGO should diversify their revenue sources to reduce their dependence on donor funding and also improve their budgeting and budgetary control systems.