BUDGETING PRACTICES AND FINANCIAL PERFORMANCE OF PUBLIC INSTITUTIONS IN RWANDA THE CASE OF RWANDA SOCIAL SECURITY BOARD
Abstract
The budget plays a crucial role in implementing an organization's strategic plan, projecting future financial performance, and assessing the financial viability of chosen strategies. This study explored the correlation between budgeting practices and the financial performance of public institutions in Rwanda, specifically focusing on budget planning, control, and participation within the Rwanda Social Security Board (RSSB). The research employed a descriptive survey design with quantitative methods, utilizing a stratified random sampling method.The study revealed positive consensus among respondents regarding long-term budget preparation (Capital budgets), indicating organizational proficiency in crafting long-term financial plans. However, opinions vary concerning the alignment of budgets with strategic plans, suggesting a diverse range of perspectives. Short-term budget utilization for day-to-day operations receives favorable feedback, though with some variability. The quarterly review of budgets and analysis of budget variances also shows positive sentiments but with diverse opinions on their effectiveness.Examining the involvement of functional heads in the budgeting process, the study finds positive views on defining budgetary goals, but opinions differ on the role of functional heads and negotiating budget estimates. Budget variance analysis and corrective measures receive positive feedback with moderate variability in opinions.Correlation analysis demonstrates a strong positive relationship (Pearson correlation of 0.944) between budget planning and financial performance, emphasizing the critical role of strategic budget planning in achieving favorable financial outcomes. Additionally, a moderately positive correlation (0.514) is identified between budget control and financial performance. Both correlations are statistically significant at the 0.01 level, affirming the reliability of the observed connections.In summary, the study underscores the importance of budgeting practices in enhancing the financial performance of public institutions, emphasizing the need for strategic budget planning, effective control mechanisms, and active participation in the budgeting process.
Key Words: Budgeting,Practices,Financial,Performance,Public Institutions
CITATION: Mukanziza, O., & Kengere, A. O. (2024). Budgeting practices and financial performance of public institutions in Rwanda. The case of Rwanda Social Security Board. The Strategic Journal of Business & Change Management, 11 (3), 101 – 141. http://dx.doi.org/10.61426/sjbcm.v11i3.2951
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i3.2951
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