THE EFFECT OF BUDGET CONTROL ON FINANCIAL PERFORMANCE AMONG STATE-OWNED ENTERPRISES: TOWARDS ENHANCING A BUDGET MANAGEMENT CONTROL POLICY
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Abstract
Rwanda's SOEs are underperforming. 60% are losing since 2016. The Rwandan government owns 49%, 95%, and 49% of KTRWANDA NETWORKS, MARAPHONE RWANDA, and AFRICA OLLEH SER-VICES LTD, which have lost money over the past five years. The study investigated Rwandan SOEs' financial performance and budget control. This study defines budget control as planning, control, implementation, and review. Financial performance includes liquidity, profitability, and solvency. The study examined seven goals. The descriptive study uses qualitative and quantitative methodologies. Correlational research examined the relationship between budget control and financial performance. This survey polled 106 employees of seven SOEs. The questionnaire was the study's major data collection tool. Secondary data: financial report. Frequency, percentage, mean, and inferential statistics Regression and correlation analyzed data. Budget planning was high, averaging 3.75. Budget implementation is high overall, averaging 3.78. The budget review is high, averaging 3.67. Companies had high liquidity, averaging 3.66. Profitability has been moderate during the past five years, averaging 2.96. Solvency was high, averaging 3.59. Budget control and financial performance have a 0.384 association and a P-value of 0.000. Multiple regressions demonstrated budget control contributes 22% to financial performance. Budgeting control issues include unexpected market, cash flow constraints, over-spending against intended, Rigid Decision-Making, Lack of Trained and Skilled Labor, No Budget Lines or Budget Control, Limited Cash, Unbudgeted activity, Budget violations, Insufficient funds to cover budgeted costs, Government priorities, commodity price fluctuations, and cash inflation cause unplanned activity. Lack of contemporary technology, high expenses, and low income, lack of a core system to oversee all finance modules and Accuracy and timeliness of monthly management reports, lack of employee ownership of finance performance, a recovery that may take longer than projected, risks connected with global inflation, cost of importation, poor marketing, and reliance on public tenders. Good investment analysis of badly managed subsidiaries. Management should enhance company profitability from moderate to high. Management should increase budget control's 22% impact on financial performance. Management should investigate why their budget planning is not improving financial performance, as expected.
Publication details
- DOI
- 10.5281/zenodo.7885472
- OpenAlex
- W4367667318
- Document type
- article
- Language
- EN
- Source
- Zenodo (CERN European Organization for Nuclear Research)
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