Budgeting as a control strategy

Thesis Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p><strong>1.1 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</strong><strong>Background of study</strong></p><p>UnionBank of Nigeria plc is one of the first generation banks started to the colonial era. Formally known as Baraclays bank DCO(Dominion Colonial and Overseas) it was opened in1917.</p><p>In compliance with the directive of the government in 1968, that all companies (Including Banks) must be incoporated &nbsp;locally in Nigeria in1969 and its name was consequently changed to Baraclays Banks of Nigeria Limited with its registered Head office at 40 Marina Lagos.</p><p>As a result of Nigerian Enterprises promoation decree of 1972 and 1977, the federal government of Nigeria acquired 52% of the Bank shares Leaving 40% for Barclays Bank international ltd (Now Baraclays-Bank plc) while the remaining 8% was taken up by the Nigerian public Baraclays Bank plc sold 20% of its shares to Nigerian in 1979 and the remaining 2% in June 1989. &nbsp;Thus, it became an indigenous bank wholly managed by Nigerians. &nbsp;And the name was changed to Union Bank of Nigeria Limited. &nbsp;In 1990 the name was further changed to Union Bank of Nigeria Plc.</p><p>The bank is one of the commercial bank that survives and strives during the nations economic unsteadiness. &nbsp;Union bank of Nigeria plc currently has her corporate head office at 40 marina Lagos. &nbsp;This Head office building “The STALLION PLAZA” is a 32 story edifice and is now the most magnificant and tallest building in Africa.</p><p>The bank now has 9 Area office bsranches, including full indegenous branch in LONDON and SOUTH AFRICA respectively. &nbsp;It has 5 staff training centres with on LAGOS, IBADAN, PORT-HARCOURT, ZARIA JOS. &nbsp;The bank which is regarded as the largest employer of labour in banking industry in Nigeria, now has a staff strength of 8 workers. &nbsp;It has some group of company such as union merchant bank, union assistance and union Homes.</p><p>The bank is about 75% computerian and has an outstanding record in term of profitability. &nbsp;As at Septembers 30th 1998 bank’s gross earnings total assets and deposit base stood at N13.8 billion N102.4 billion and N77 billion respectively.</p><p>The principle and consent of budgeting centres around the optional allocation scarce resources. &nbsp;Resources are limited but human wants are not only unlimited but also multifarious. In order to make the best use of available resources, the principle of budgeting has to be adopted.</p><p>Every business organization, government, sole propertor and banks employs the principle of budgeting as a control strategy. &nbsp;Even individuals like salary earners hardly know that they are adopting the principle of budgeting when at the end of the month, &nbsp;they try to reconcile their monthly salaries with their expenses for the month.</p><p>The budgetary control strategy calls for the preparation of plane in the form of ideas and values for the future. Budgeting cannot be performed in isolation. &nbsp;This is one of the reasons that all managers should be financially aware because almost every decision taken will have financial implication and will therefore effect other department, even if this means they have less money available for their Own budget.</p><p>Clearly, once a budget has been established it is necessary to set up &nbsp;control and procedures which enables the &nbsp;budget to be monitored.</p><p>Budgetary control is the establishment of budget relating the responsibilities of executives to the requirement of actual with budgeted results either to secure by individual action the objective of the policy or the provide basis for its revision. It should be pointed out that there is on significant difference between the principles of budgeting control in either the banks or public sectors, the statement implies that as budgets are established for various elements of the bank managers are given responsibility foe the management &nbsp;of budget resources in those.</p><p>Clearly, a strategy require information which has to be related to the delegate responsibilities within the bank, these should be related to the objectives of the &nbsp;budget and then be monitored as &nbsp;out turn figures &nbsp;become available. &nbsp;Overall, it was &nbsp;felt that the budgetary control process and demand that it places on financial management skills represents the major challenges of change being faced by the bank.</p> <br><p></p>