Research Journal of Finance and Accounting www.iiste.

org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol.10, No.19, 2019

An Assessment of Factors Affecting Budget Utilization

(Case of East Wollega Administrative Zone)
HASHIM TUNE SADO (MSc)
Wollega University, College of Business and Economics, Department of Accounting and Finance
P.O. Box: 395, Nekemte, Ethiopia

Abbreviations and Acronyms

MoFED-Ministry of Finance and Economic Development
MoFED-Finance and Economy Development
MEFF-Macro-Economic and Fiscal Framework
SPSS -Statistical Package for the Social Science

Abstract
The main purpose of this study is to asses’ factors affecting budget utilization in East Wollega administrative
Zone with special references to some selected Woredas. In order to maintain the desired objectives descriptive
survey research is designed for the study. The main data of this study was both primary and secondary data
which was analyzed by applying descriptive statistics focusing on central tendency, arithmetic mean, and
standard deviation, standard error of mean with disparity between the two groups and, independent t-test
employed SPSS version
20.00. The results reveal that, there are many factors affecting budget utilizations such as; inflation, tax
compliance, government policy and structural factors.
Keywords: Utilization, Factors, Budget, Investigation, Affect.
DOI: 10.7176/RJFA/10-19-01
Publication date:October 31st 2019

INTRODUCTION
In the world today, organizations have developed a variety of processes and techniques designed to contribute to
the planning and control functions. One of the most important and widely used of these processes is budgeting.
Budgeting involves the establishment of predetermined goals, the reporting of actual performance results and
evaluation of performance in terms of the predetermined goals. Then, Budgeting is defined as a form of financial
planning and as such budget is utilized to impose the strategy of a country. Consequently, a budget is composed
of different functional budgets that could help a country for development such as agriculture, technology,
tourism and other (Smith and Mcgeary, 1997).
Budget has multiple functions such as: control of public resources, planning for the future, allocation of
resources and management of resources. However, the relative strength of each function depends on the current
view of the function of budgeting and budgeting tools and techniques, but also depends on the strength of
particular organizations and/or institutional arrangements to support these functions (World Bank, 1998)
The public budget planning is a process by which government sets the level of expenditure, collects
revenues and allocates the spending of resources among all sectors to meet national goals (Shah, 2008). Budget
implementation on the other hand is the actual execution of the budget and application of funds to the planned
activities. During the fiscal year, however, not all allocated budgets are used as per the proposed plan. These
could be cases where the approved funds may not be enough to fully accomplish the intended goal. In other
instances, the amount allocated to a project may be more than what the project can consume. The disparities
between the budget allocated and actual expenditure arise due to multiplicity of factors and improper costing of
county functions (Rotich and Ngahu, 2015). The budget cycle needs to be tracked and at every stage the factors
that could be affecting the utilization of the budget analyzed.
In the Ethiopia public sector, the budget implementation period or the financial years run from 1st July to
31st June. During this period, a lay down medium term expenditure framework budget cycle is followed in the
preparation and implementation of the national budget. Budget implementation is the real execution of the
budget and application of funds to the planned activities. During the financial year, however, not all funds are
expended as per the plan.
Budget utilization affected with intrinsic and extrinsic factors within the boundary of in and outside of the
organization having the influence on the proper utilization of the budget. Hence, this study would attempt to
assess factors affecting budget utilization in East Wollega administrative Zone desired to prove the problem in
advance. From the review of past research, most studies have concentrated on budget preparation,
practice, transparency and accountability, and budget implementation in the public sectors, but as best of the
researcher knowledge, little studies are conducted on identification of determinant factors affecting budget
utilization in the

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study area.

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The proposed researches are trying to answer the following basic questions.
 What are the factors affecting budget utilization?
 To what extent does factors’ affecting budget utilization?
 What possible measures should be taken to enhance factors affecting budget utilization?
 To evaluate the associations between factors affecting budget utilization?
The main objective of the study is to investigate the factors affecting budget utilization in East Wollega
administrative Zone with special references of selected Woredas.

Specific objectives
 To identify factors affecting budget utilization in East Wollega Zone selected woredas?
 To determine to what extent the factors affecting budget utilization in east Wollega Administrative Zone?
 To evaluate the associations between factors affecting budget utilization?

Literature Review
Overview of Budget
A budget is defined as an itemized summary of estimated expenditures for a given period along with proposals
for financing them (Daniel, 2005). In the public service the main sources of finances include taxes levied directly
or indirectly, fines and penalties, revenues from profit making state corporations, charges and fees on services
rendered foreign aid and donations from development partners and internal and external borrowing. The monies
raised are then applied in main government expenditure sectors such as the regional governments and the zonal
sectors which further divide to the zonal offices and Woredas level offices for implementation. These are the
points where budgets are to be utilized finally being affected by different level factors.
Generally, budget is a vital role to improve the coordination among the various units of the organization. So
the organization overall performance depends on the budget with respect to financial plan for implementing the
various decision.

Budget Preparation
In Ethiopia budget process is guided by a directive (financial calendar) issued by the ministry of Finance and
Economy Development (MoFED) to all entities listed as public bodies. This directive has a schedule to make
sure that planning and budgeting are prepared, approved, appropriated and executed so in line the pre-set
development agendas (FDRE., 2009). Its preparation is often guided by a document known as the Macro-
Economic and Fiscal Framework (MEFF) prepared by MoFED. The MEFF provides, among others, forecasts of
government revenue and expenditure; expenditure financing, the division of total expenditure between federal
and regional, and divide federal expenditures between recurrent and capital expenditures for the next three years
which the program budget is planned for (MoFED, 2010). Furthermore, preparation of the budget usually takes
many months and involves all public institutions: the Ministry of Finance manages the process; the
Cabinet/President sets or approves the policy priorities, line ministries plan and advocate for their resource needs
and the legislature reviews and approves the final plan. Preparation is at the heart of the political process: it is the
decision on how to allocate the state’s limited resources to competing demands.(A., 2008).

Budget Utilization
Right after the approval of budget prepared by the legislature, the government embarks on the challenging task
of spending funds. Utilizing public funds effectively to meet stated policy objectives while ensuring value for
money is often just as challenging than planning how to spend it. Several reviews of Public Financial
Management performance in developing countries show that countries score significantly better on budget
preparation than on budget utilizing. Budget utilization is the phase where resources are used to implement
policies incorporated in the budget. As they argued, it is possible to utilize badly a well-prepared budget; it is not
possible to utilize well a badly prepared budget.(Schiavo-Campo, 1999)

Empirical Reviews related to factors affecting budget utilisation

According to (Tafa, 2016), referring shah 2008 and World Bank, 1998, Government organizations plan their
activities as well as the budget to fulfill the public interest. In order to sustain economic growth and reduce
poverty, it is important to link physical planning, budgeting policy priorities. Failure to link policy, planning and
budgeting is an important factor contributing to poor budgeting outcomes at the macro, strategic and operational
levels in developing countries.
As per (ABSHIRO, 2014) Strong system of internal control is very essential in achieving certain goals of an
organization. Internal control includes all the procedures and actions taken by an organization in order to manage
the expiating assets, ensure conformity with organizations policy and governmental rules, evaluate operating

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efficiency and ensure precise and reliable operating data and accounting records. According to Charles Kip sang,
2015 after conducting a research on kericho County government in kenya suggested that there exist a moderately
strong Negative and statistically significant relationship between inflation and budget utilization.(Rotich, 2015)
Charles Kip sang, in addition to the factor Inflation rate he assessed, showed as inflation rate increases,
budgetary estimation at the county government will decreases. This is because inflation leads to high budget
errors and unemployment. Lastly, unexplained increase in price of VAT added goods will affect the real value of
money in the county government as such his findings revealed that there existed a positive and statistically
significant relationship between tax compliance and budget utilization, a weak negative correlation was observed
between VAT policy and budget utilization. (Rotich, 2015)
According to Christine, 2012, lack of alignment between the organizational structure and structure of
performance reporting requirements, value and usefulness of performance information were found to undermine
the budget utilization.(KAJUJU, 2012)
Dejene Tafa, 2016 has also found that organizational structure induced factors such as lack of effective
budget monitoring, lack of a decentralized budget administration system, absence of clear hierarchy in the
administration of budgets, structural relationship between different department and lack of effective
communication are some of the main factors that affect public budget utilization in Ethiopia(Tafa,2016) .

Conceptual Framework
As outlined in figure 1, In order to support the objectives of the study the researcher of this study has to recognize
the following conceptual framework of the study.
Figure 1. Conceptual framework

Government Policy
Inflation Rate Budget
Tax Compliance Utilization
Organizations’ Structure
Research Approaches
In order to achieve the objective of this study, the researcher used both quantitative and qualitative method of
research approach with descriptive survey research design. Thus, the researcher examined major factors affecting
budget utilization in East Wollega Zone with special reference to some selected Woredas.

Sample and Sampling Techniques

Accordingly from the 21 zones found in Oromia region, one zone (East Wollega zone which comprise 17
woredas) and from the 17 woredas found in East wollega zone 6 woredas and nekemte city administration are
selected as centers of the study on the basis of convenience sampling (purposive sampling) method. In designing
a sample, the researcher used different basic factors, such as availability of data, transportation service access,
distance of woredas from the zone and the like.
The total number of target population in the selected woredas is 280 Top mangment, Auditors, woredas
finance and budget officials and sector finance budget officials. From this population the researcher selected 140
(50%) staffs by their position and relations to budget process (Budget users and Disbursement team). The
purposive selection was based on the assumption that these people had broad knowledge of understanding the
whole concept of budget and its importance in an organization.

Data Collection Tools

Both primary and secondary data sources were used in the study. The primary data was collected from the
woredas and sectors budget officials, top managers, audit experts and other department. The researcher used such
instruments as self-administered questionnaires and semi-structured interviews to collect primary data from the
respondents. Secondary data were gathered from document analysis of BOFED and WOFED, audited annual
reports, proclamations, and regulations and different related literatures such as books, journals, magazines,
research reports, internet and others to support primary data.

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Methods of Data Analysis and Presentation

To analyze and interpret the data obtained from respondent’s descriptive statistics were used, with frequency,
percentage, arithmetic mean, standard deviation and independent T- test and p-values are used to compare the
data amongst the participants by using SPSS version 20. Furthermore, qualitative data that are gathered from
woredas finance managers and others that are used to supplement the data gathered through questionnaire were
organized, summarized and interpreted in words qualitatively.

Results and Discussion

The selected sample size of this study was 140 employees for whom the questionnaires distributed in the six
sample woredas and Nekemte city found in East wollega zone. Out of these, 133(95%) copies filled and
returned. The information obtained through interview and document analyses used as a complementary data for
analysis. The characteristics of the subjects were their position and knowledge about budget.

Factors affecting Budget utilization

This part deals with the procedure of data analysis and interpretation concerning investigation of factors that
affect budget utilization in some selected Woredas of East Wollega zone.

Response Scale
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree

Table 1 Respondents View on Structural Factors affecting budget utilization

Factors criteria on budget utilisation Response scale Descriptive Statistics
1 2 3 4 5 Mean Std.
Deviation
1. There is a clear hierarchy of 14 68 42 9 -
budgets administration in your 10.5% 51.1% 31.6% 6.8% 2.3459 .75924
organization.
2. There is a proper involvement of 10 49 48 20 6
auditor in all office major projects. 7.5% 36.8% 36.1% 15% 4.5% 2.7218 .96416
3. There is smooth and facilitating 13 64 26 28 2
structural relationship between 9.8% 48.1% 19.5% 21.1% 1.5%
different departments in the 2.5639 .97974
organization associated with
budget use.
4. There is continues and transparent 21 53 51 8 -
information flow among the 15.8% 39.8% 38.3% 6%
2.3459 .81692
organizational elements related to
budget utilization.
5. There is a presence of the 9 61 46 17 -
evaluation of budget performance 6.8% 45.9% 34.6% 12.8%
2.5414 .82123
at different levels of the
organization
6. There is full involvement of the 15 58 40 14 6
line managers in planning and 11.3% 43.6% 30.1% 10.5% 4.5% 2.5338 .98126
budgeting utilization
7. The delaines in approval of project 21 64 40 8 -
proposal by revenues managers did 15.8% 48.1% 30.1% 6%
2.2632 .79672
not affected the utilization of
budgets
8. There is proper ICT usage to 24 59 32 18 -
implement budgets utilization in 18% 44.4% 24.1% 13.5% 2.3459 .96173
your revenues office.
Source: Researcher's computation using SPSS (2018)
As it can be seen from the summary of the above table 1 the mean score of all the responses for all the items
under structural factors affecting the budget utilization have been seen to be poor in their status. This indicates
that there is no clear hierarchy of administering budgets in these organizations with the poor involvement of the
auditors in all the offices and it has been further stated that there is no smooth and facilitating structural
relationship between

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different departments in the organization associated with budget utilization. The information flow among the
departments have been shown to be poor and there is no better budget performance evaluation at different levels
of the organization along with less involvement of the line managers in planning and budget utilization and
dalliance in project proposal approval affect budget utilization.
Table 2 Respondents View on Budget Utilization Policy affecting budget utilization.
Factors criteria on budget utilisation Response Rates Descriptive Statistics
1 2 3 4 5 Mean Std.
Deviation
The budget for the organization is 26 58 42 7 -
planned in line with the country budget 19.5% 43.5% 31.6% 5.3% 2.2256 .82220
utilization policy.
Every budget allocation is as per the 24 53 47 9 -
policy requirements of the sectors 18% 39.8% 35.3 6.8% 2.3083 .84549
Budget utilization of the organization is 22 61 31 19 -
periodically evaluated whether it’s 16.5% 45.9% 23.3% 14.3%
2.3534 .92274
going in line with the country policy or
not.
The budget utilization related policies 23 56 40 14 -
are well implemented in the 17.3% 42.1% 30.1% 10.5% 2.3534 .92274
organization
The policy allows the implementation 31 61 29 12 -
of the budget use to be flexible in case 23.3% 45.9% 21.8% 9% 2.1654 .88916
of unique implementation requirements.
Planning and budget department have a 21 78 28 6 -
means to take corrective action on the 15.8% 58.6% 21.1% 4.5%
weaknesses of budget preparation and 2.1429 .72970
utilization.
Source: Researcher's computation using SPSS (2018)
As depicts on table 2 above the mean score of all the responses for all the items under the budget utilization
Policy have been seen to be poor in their status. This indicates that budget for the organization is not planned in
line with the country budget utilization policy rather the budget is planned based on the sector proposal. Every
budget allocation is not as per the policy requirements of the sectors and Budget utilization of the organization is
not periodically evaluated whether it’s going in line with the country policy or not. The budget utilization related
policies are poorly implemented in the organization. As per the interview result and document review there is
budget utilization policy in paper at regional, woreda and sectoral level but it is not practically considered in
budget preparation and utilization.
Table 3 Respondents view on Tax compliance affecting budget utilization
Factors criteria on budget utilisation Response Rates Descriptive Statistics
1 2 3 4 5 Mean Std.
Deviation
There is clear information for the tax 24 57 40 12
payers and stake holders about the 18% 42.9% 30.1% 9% 2.3008 .87026
schedule and how of taxpaying.
Adequate time and facilities are provided 11 62 55 4 1
to help tax payers comply with the 8.3% 46.6% 41.4% 3% 0.8% 2.4135 .71909
expectations of the government.
There are a prepared responsibilities and 21 63 40 9
penalties for non-compliance of tax in 15.8% 47.4% 30.1% 6.8% 2.2782 .81047
revenues office
Appropriate measures are taken against 11 58 52 12
those who failed to comply with the tax 8.3% 43.6% 39.1% 9% 2.3534 .69843
requirements
Close and frequent contact with those 8 58 49 18
who failed to comply is made by the 6% 43.6% 36.8% 13.5% 2.4887 .77476
organization
Those complying with tax payment 12 49 58 14
expectations are recognized and 9% 36.8% 43.6% 10.5% 2.5789 .79972
motivated to keep up complying

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Factors criteria on budget utilisation Response Rates Descriptive Statistics

1 2 3 4 5 Mean Std.
Deviation
The tax payers know the consequences 15 51 60 7
of not complying with the tax 11.3% 38.3% 45.1% 5.3% 2.5564 .80164
Requirement
Tax compliance represents good 12 54 46 15 6
governance in an era of transparency in 9% 40.6% 34.6% 11.3% 4.5% 2.4436 .76290
the budget utilization.

Source: Researcher's computation using SPSS (2018)

As shown in Table 3, concerning tax compliance in respects with Budget Utilizations the mean score of all
the responses for all the items have been seen to be poor in their status.
This indicates that there is no clear information for the tax payers, no adequate time and facilities are
provided to help tax payers, there are no clear responsibilities and penalties for non-compliance of tax in
revenues office and Revenue office manager did not clearly defined measures of budget operationalization. The
office is weak in taking measures against those who failed to comply with the tax requirements and less close &
frequent contact with those who failed to comply. As per the interview result the selected woredas revenue
authority is not actively implementing the tax policy, did not provide awareness creation training to the tax
payers continuously and weak in motivating active tax payer. This result in less tax revenue actually which vary
from the expectation because of this budget shortage will be resulted.
Table 4 Respondents view on Inflation rate affecting budget utilization
Factors criteria on budget utilisation Response Rates Descriptive Statistics
1 2 3 4 5 Mean Std.
Deviation
The budget utilization is planned by 12 42 41 33 5
forecasting the inflation rates of the 9% 31.6% 30.8% 24.8% 3.8% 2.8271 1.02626
country.
There have been unexpected rate of 26 50 40 15 2
inflation between plan and 19.5% 37.6% 30.1% 11.3% 1.5% 2.3759 .97391
implementation time of the budget.
The budget allocated by the government 8 57 37 26 5
is in consideration of the country level 6% 42.9% 27.8% 19.5% 3.8% 2.7218 .97198
inflation rate.
The Inflation rate in the country is 11 74 24 24
stabled. 8.3% 55.6% 18% 18% 2.4586 .88344
Inflation addressed by the government in 22 43 53 15
order to safeguard unplanned budgeting 16.5% 32.3% 39.8% 11.3% 2.4586 .90043
at your organization level.
Source: Researcher's computation using SPSS (2018)
As per the response of the respondents shown on table 4 above, the inflation rate is not strictly considered in
budget preparation and utilization, there have been unexpected rate of inflation between plan and implementation
time of the budget, the budget allocated by the government is in consideration of the country level inflation rate,
the inflation rates of the country can be forecasted and inflation addressed by the government in order to
safeguard unplanned budgeting at the revenues organization level. The results obtained from the analysis of the
questionnaire regarding inflation rates were indicated that there is poor attention concerning the impact of
inflation rate on budget utilization in public sectors.

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Table 5 Respondents view on Records, Reports, and Audit of Budget Users affecting budget utilization
Factors criteria on budget utilisation Response Rates Descriptive Statistics
1 2 3 4 5 Mean Std.
Deviation
Your office keeps complete budgetary 16 48 46 13 10
records in accordance with the country’s 12% 36.1% 34.6% 9.8% 7.5%
2.6466 1.06027
financial administration proclamation
and regulations.
Budget utilization is always implemented 13 47 39 25 9
based on full documents and evidences of 9.8% 35.3% 29.3% 18.8% 6.8% 2.7744 1.07743
revenues office.
Your office presents timely, explanatory, 20 32 52 23 6
and complete budget implementation 15% 24.1% 39.1% 17.3% 4.5% 2.7218 1.06140
Report
The financial statement of your office is 25 43 44 21
audited regularly by an independent 18.8% 32.3% 33.1% 15.8% 2.4586 .97321
auditor.
Source: Researcher's computation using SPSS (2018)
The above table 5 indicates that the office did not keep record as per financial administration proclamation
and regulations of the country, no sure about Expenditures are shown in appropriate account codes and Budget
utilization is not implemented based on full documents and evidences of revenues office. The office are weak in
presenting timely, explanatory, and complete budget implementation report and the financial statement is not
audited regularly by an independent auditor.

Regression Analysis
In order to measure the effect of the structural, Policy, tax compliance, inflation and record related factors on the
budget utilization of the selected public sectors the researcher has used multiple linear regressions and
interpreted the results as follows.
Table 6 Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .942a .887 .882 .35389
a. Predictors: (Constant), Records, Policy, compliance, Inflation, Structural
As it can be observed from the table 6 above there is strong association between the independent variables
under consideration and the budget utilization as indicated by R accounting 94.2% rated to be strong positive. In
addition to this the R-Square results showed that the sum total effect of these factors on the budget utilization
accounts more than 88% showing that these factors together have this much influence on the budget utilization of
these sectors.
Table 7 ANOVA
Model Sum of Squares df Mean Square F Sig.
Regression 124.351 5 24.870 198.585 .000b
1 Residual 15.905 127 .125
Total 140.256 132
a. Dependent Variable: Budget utilization
b. Predictors: (Constant), Records, Policy, compliance, Inflation, Structural
Source: Researcher's computation using SPSS (2018)
The ANOVA table 7 above is all about the model fitness test for measuring the effect of these independent
variables on the budget utilization of the sectors. As such, the significance level .000 shows that the F test is
large enough to prove that the model is adequate to measure the effect of these factors on the budget utilization
with lesser residuals provided.

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Table 8 Coefficients
Model Un standardized Coefficients Standardized Coefficients T Sig.
B Std. Error Beta
(Constant) -.282 .202 -1.394 .166
Structural Factors .569 .179 .375 3.185 .002
Policy -.370 .065 -.369 -5.684 .000
1 Compliance -.303 .160 -.225 -1.891 .061
Inflation 1.105 .124 .966 8.915 .000
Records -.057 .037 -.047 -1.563 .121
a. Dependent Variable: Budget utilization
Source: Researcher's computation using SPSS (2018)
From the coefficients table 8 above, it can be observed that structural factors, tax policy and inflation are the
major significant factors affecting the budget utilization of these targeted public sectors of East Wollega Zones.
Here we can see from the standardized coefficients that inflation is the most influential factor with the highest
96.6% possible effect on the budget utilization level showing that the more the inflation is the higher the budget
utilized is. Inflation as such, is proved to affect the amount of budget utilized in higher degree. The other
significant effect comes from the structural factors. The structural factors have been shown to have 37.5 % effect
on the level of budget utilized showing that the stronger the structural factors are the more the budget to be
utilized is. Finally the other significant effect comes from the policy that the country and the sectors have
towards the budget utilization. The policy has been shown to have 36.9% negative effect on the budget level
utilized confirming the fact that the stronger the budget utilization policies are the lesser the budget utilized will
be in these public sectors under consideration.

Correlation Analysis
In order to measure the degree of association between the factors and budget utilization the researcher has used
Pearson correlation through the SPSS 20 version as follows.
Table 9 Correlation Analysis
Correlations
Budget Structural Policy compliance Inflation Records
utilization
Pearson
1 .728** .208* .877** .920** .017
Budget Correlation
utilization Sig. (2-tailed) .000 .016 .000 .000 .846
N 133 133 133 133 133 133
Pearson
.728 **
1 .742 **
.858 **
.851 **
.038
Correlation
Structural Sig. (2-tailed) .000 .000 .000 .000 .666
N 133 133 133 133 133 133
Pearson
.208 *
.742 **
1 .392 **
.398 **
-.032
Correlation
Policy Sig. (2-tailed) .016 .000 .000 .000 .715
N 133 133 133 133 133 133
Pearson
.877** .858** .392** 1 .959** .033
Correlation
compliance Sig. (2-tailed) .000 .000 .000 .000 .708
N 133 133 133 133 133 133
Pearson
.920 **
.851 **
.398 **
.959 **
1 .047
Correlation
Inflation Sig. (2-tailed) .000 .000 .000 .000 .590
N 133 133 133 133 133 133
Pearson
.017 .038 -.032 .033 .047 1
Correlation
Records Sig. (2-tailed) .846 .666 .715 .708 .590
N 133 133 133 133 133 133
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
Source: Researcher's computation using SPSS (2018)

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As it can be seen from table 9 above it has been proved that there exists strong positive relation between
structural factors and the level of budget utilization accounting for 0.728 this proves that the more tightly the
structural factors the same level growth in the level of budget utilization will be. Inflation rate has been also
shown to have strongest positive relation with the level of budget utilized showing that the inflation rate increase
will result in increase in the level of budget utilization. The other factor having strong relation with budget
utilization is that Tax compliance showing the raise in the level of tax compliance will have the ability to raise
budget utilization in the same direction.

Conclusion
Based on the data collected from the respondents the researcher has analyzed reliable data from adequate samples
and has reached on the following conclusions for the desired specific objectives.
The major factors affecting the utilization of budget in these sectors were identified to be Structural factors;
inflation and budget related policy have significant effect on the level of budget utilization in East Wollega Zone
selected public sectors while tax compliance and records keeping have shown insignificant effect on the level of
budget utilization.
It has been proved that there exists strong positive relation between structural factors and the level of budget
utilization. This proves that the more tightly the structural factors the same level growth in the level of budget
utilization will be. Inflation rate has been also shown to have strongest positive relation with the level of budget
utilized showing that the inflation rate increase will result in increase in the level of budget utilization. The other
factor having strong relation with budget utilization is that Tax compliance showing the raise in the level of tax
compliance will have the ability to raise budget utilization in the same direction.

Recommendations
Being based on the conclusions made after the summarization and analysis of data here the researcher recommends
some general and specific recommendations as follows.
 The structural factors are the basic factors that the respective organizations can improve, and as such the
organization should train and convince all the departments or units to plan act together especially in
utilizing the budget of the respective organizations.
 Whenever planning the budget for specific year the organizations should strictly consider the inflation
rates forecasts of the country as it could have greater effect on the level of budget utilization.
 Responsibility and accountability should be given to each level unit's for effective utilization of their
budgets.
 Planning procedure should be shortened and there should be coordinated effort with other departments.
 In order to achieve efficient ways of budget utilization the office must follows:
 Improve a time base plan of budget
 Improve the officer skills by providing short term training based on their gap assessed.
 Adopting strong and continuous monitoring and evaluation of budget
 Facilitating the pre-condition to use budget
 Advanced technology must be adopted for the office in order to run the budget efficiently and on
specific period.
 A government policy that is all inclusive should be drawn to assist in budget utilization
operationalization in the study area
 The research of this study recommends the following areas for further research; how organizational
behavior and politics can influence budgetary utilization in major devolved
governments and challenges facing implementation of devolved governance in allocation of devolved
funds.

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Research Journal of Finance and Accounting www.iiste.org
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