Impact of Budgetary Control on Financial Performance of Selected Secondary School

Abstract

his study was about the impact of budgetary control on financial performance of selected secondary schools in Arusha City, Tanzania. The study used the quantitative approach under the descriptive correlational research design. The city had a total of 29 private secondary schools out of which nine, which is 30% of the total population were selected through simple random sampling. From the sampled schools, eight school administrators (school heads, treasurer, deputy school heads, academic masters, disciplinary master, and three heads of departments were purposely selected to constitute the sample. Therefore, a total of 72 respondents were given the questionnaire to fill but the response rate was 70 which is 97.2%. Data was collected through a questionnaire which was piloted in the field for informed validity. Reliability test was run through the SPSS and the test yielded the Cronbach’s Alpha of above 0.7 for each variable. Based on the findings of the study, the study came up with the following conclusions. The budgetary process was effective as departments submit budget plans for the following year, every stakeholder was included in the planning of budget, departments participate in the budget planning and constraints that lead to the final budget were explained to school stakeholders. Furthermore, there was a clear budgeting policy in the school and there is a fair allocation of resources as planned. However, the financial performance of the schools was poor as the schools did not afford to cover the operating cost, the schools did not gain profits in their projects and there were inadequate financial resources to run the institutions. Budgetary process did not account for effectiveness of financial performance but budgetary control did. The study recommends that the schools under investigation should maintain the current budgetary processes. The existing budget control measures need to be maintained for schools to perform well financially. There is a need to revamp the financial performance mechanisms for the schools to afford handling the operating costs.