Challenges and Prospects of Budget Preparation and Utilization: a Study in Selected Finance Bureau of Kaffa Zone

Abstract

The main objective of this study was to examine challenges and prospects of budget preparation and utilization in Kaffa zone selected finance bureau. All 94 employees directly related to budget related issue was used as population. Five-year data has been collected from secondary sources and also primary data was collected through self-administered questionnaire, & semi- structured interview. To collect essential data the study employed both qualitative and quantitative approach. All collected information was analyzed by using both descriptive and empirical model.  Finding indicates that budget preparation process in Kaffa zone was good but budget utilization practice is unsuccessful. As the study compare recurrent budget to capital budget, recurrent budge have satisfactory utilization performance while capital budget was ineffective performance. The finding also discovered that budget utilization significantly affected by contractor’s capacity, auditing system and diverting fund from planed activities to unplanned one whereas staff capacity and Inland Revenue collection has no significantly effects on budget utilization. The study recommended that budget utilization performances more focused to capital budget rather than recurrent budget. To protect delays of capital projects and its weak quality strong rules and society involvement is essential.  Finally focusing on planed program, strong auditing system, re-structuring planning and construction and design department are the most critical mechanisms to overcome challenges in budget utilization as a solution in Kaffa zone.

Keyword: Budget, budget preparation, utilization, prospects & challenge