1.1 Background of the study
The term budget refers to a plan quantified in monetary terms, prepared and approved by appropriate authorities prior to a defined period of time, usually showing planned income to be generated and or expenditure to be incurred during that period and the capital to be employed to attain a given objective.
Abogun (2012) defined a budget as a plan of dominant individuals in an organization expressed in monetary terms and subject to the constraints imposed by the participants and the environments, indicating how the available resource may be utilized to achieve whatever the dominant individuals agreed to be the organization priorities.
Pandey (2003) in his formal definition defines budget as “a qualitative statement for a defined period of time which may include planned revenue, expenses, asset, liabilities and cash flows”.
Institute of cost and management accountants (ICMA) (as cited by Eze 2001), defined budget as “ a financial and or qualitative statement prepared prior to a defined period of time, of policy to the pursued during that period for the purpose of attaining a given objective”.
Lucey (2003) in his recent definition of budget defines it as a qualitative expression of a plan of action prepared for the business as a whole for departments, for functions such as sales and production or for financial resource item such as cash, capital, expenditure, manpower purchase, e.t.c
Morgan (19970 opines that the budget had grown beyond a financial tool. It is above all managerial tool, in essence, it is the best tool for making sure that key resources, especially performance resources are assigned to priorities and to results. It is a tool that enables the manager to know when to review and revise plans, either because results are different from expectation or due to environment economics conditions, market conditions or technologies charge which no longer correspond to the assumption of the budget