Budgetary controls and financial performance of financial institutions in Uganda: a case study of Centenary Bank Uganda

Abstract

The successful provision of basic banking products and services must not be devoid of an effective budget control system if the organizational goals and objectives are to be achieved. A detailed review of past studies shows that they were carried out either on a different context or interrogated different conceptual issues. In addition, some of the past empirical studies focused on different research methodologies and adopted different data collection instruments. The purpose of this study was to establish the effect of budgetary control on financial performance of selected financial institution in Uganda (Centenary bank). The study specifically sought to establish the effect of budget planning process, budget monitoring and evaluation, organizational management, cost reduction and organizational commitment on financial performance of selected financial institution in Uganda (Centenary bank). The study adopted a qualitative correlational design, and the target population was the employees in accounting/finance and operations departments of centenary bank. Both secondary and primary data was used and analyzed using correlation and descriptive analysis. The study results indicated that budgetary planning has a positive and significant effect on financial performance (P = 0.000). The study found that budget planning had the most significant effect on financial performance of centenary bank followed by budget monitoring and evaluation and organizational commitment. The study recommends that bank managers should review their current performance yearly targets, work on threats and opportunities, and analyze the success and failure of previous plans to improve on their budgetary planning. Further, the managers in commercial banks should establish more budgeting centers, employ more budget officers, and provide budget manuals to improve on their budgetary control. In addition, they should solicit for feedback, review budget conference for accuracy and arrange for catering and other vendors to improve on the budget conference.