Advanced Financial Management: BamCCUL Budget Impact Analysis

This research assignment, conducted by Group A for the Advanced Financial Management System course, examines the impact of budget management on the performance of Bambui Cooperative Credit Union Limited (BamCCUL) in Cameroon. The study investigates budget management practices, evaluates organizational performance concerning budget implementation, and determines the relationship between budget management and organizational performance. The methodology includes questionnaires, interviews, and library research, with data analyzed using quantitative methods. The findings address challenges such as unrealistic results and rigid decision-making, and impacts like lack of dynamic structure and business failure, proposing solutions like flexible budgeting and communication. The research recommends flexible budgeting, rolling forecasts, and team involvement to improve budget management and organizational outcomes. The research concludes by emphasizing the importance of effective budget management for organizational success, especially in the context of microfinance institutions in Cameroon.

THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION
Limited (BamCCUL), CAMEROON
2021-2022 ACADEMIC YEAR
DOUALA
BAMENDA
Course: ADVANCED FINANACIAL MANAGEMENT SYSTEM
A research assignment for the partial fulfillment as a requirement for the award
of a continuous assessment mark for Advance Financial Management System
Level: 400
Written by:
GROUP A
Academic lecturer: Dr. FOMINYAM JONATHAN
REPUBLIC DU CAMEROUN
Paix – Travail – Patrie
----------
REPUBLIC OF CAMEROON
Peace – Work – Fatherland
----------

© Copyright by AFM Group A MBA 1 IUGET 2022
Written and presented by group a ii
THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

All Rights Reserved
Table des matières
All Rights Reserved..............................................................................................................ii
CERTIFICATION...........................................................................................................................vi
ACKNOWLEDGEMENT...............................................................................................................vii
ABSTRACT.................................................................................................................................viii
CHAPTER ONE..............................................................................................................................1
1.0 INTRODUCTION.................................................................................................................1
1.1 Background of the study...................................................................................................1
1.2 Statement of the problem................................................................................................4
1.2.1. Research Questions...................................................................................................7
1.3. Objectives of the Study....................................................................................................7
1.4 Research Hypotheses........................................................................................................8
CHAPTER THREE..........................................................................................................................9
3.0 Methodology of the Study................................................................................................9
3.1 Research design................................................................................................................9
3.2 Study population...............................................................................................................9
3.3 Sampling procedure..........................................................................................................9
CHAPTER FIVE............................................................................................................................10
Written and presented by group a ii
i
THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

PRESENTATION OF FINDINGS, CONCLUSION AND RECOMMENDATION.................................10
CHALLENGES OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN ORGANIZATION
..............................................................................................................................................10
1] Unrealistic Results,........................................................................................................10
2] Rigid Decision Making,..................................................................................................11
3] Time Required to Complete the Budget.......................................................................11
4] Blames for Outcomes,...................................................................................................11
5] Gaming the System,......................................................................................................12
6] Expense Allocation,.......................................................................................................12
7] Only Considers Financial Outcomes,............................................................................12
IMPACTS OF THE CHALLENGES OF BUDGETING IN AN ORGANISATION..............................13
Lack of dynamic structure.................................................................................................15
Budget variance................................................................................................................15
Business failure.................................................................................................................16
Proposed solutions................................................................................................................16
1. Know Your Organization’s Budgeting Timeline and Procedures..................................17
2. Leverage Financial Data................................................................................................17
3. Work Towards Goals.....................................................................................................18
4. Evaluate Performance...................................................................................................18
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

5. Communicate Progress and Results..............................................................................19
6. Hone Your Financial Knowledge and Skills...................................................................19
RECOMMENDATION ON THE IMPACT OF BUDGET MANAGEMENT PERFORMANCE..........20
1. Keep Budgeting And Forecasting Flexible.....................................................................20
2. Implement Rolling Forecasts And Budgets...................................................................20
3. Budget To Your Plan......................................................................................................20
4. Communicate Early And Often......................................................................................21
5. Involve Your Entire Team..............................................................................................21
6. Be Clear About Your Goals............................................................................................21
7. Plan For Various Scenarios............................................................................................22
8. Track Everything............................................................................................................22
9. Include Profit And Cash Flow Goals..............................................................................23
10. Let Excel Go.................................................................................................................23
CONCLUSION.............................................................................................................................23
BIBLIOGRAPHY..........................................................................................................................24
Appendix...................................................................................................................................25
Questionnaire........................................................................................................................25
Written and presented by group a v
THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

CERTIFICATION
This is to certify that the research assignment titled: THE IMPACT OF
BUDGET MANAGEMENT ON THE PERFORMANCE OF AN ORGANISATION:
CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON’’ was written by Group A members TCHINDA
STEVE JONATHAN, FOPOSSI KAYIM ROMUALD, AZANGUE ANITA MOSOH,
WACTCHOM LAETITIA, NAMEN GERMAINE, EPIE LIZETTE, ATIAMU LAURA,
TESSY NGEUPI, ATINGWA GHISLAINE, ST THOMAS, MELISSA and NETER as
a requirement for the partial fulfillment for the award of CA marks for
Advanced Financial Management level 400 under the supervision of Dr.
FOMINYAM JONATHAN.
Course lecturer:
Dr. FOMINYAM JONATHAN
University senior lecturer / consultant
Written and presented by group a v
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

Signature……………….….
Date………………………….
ACKNOWLEDGEMENT
We first of all wish to present our sincere gratitude and thanks to those who
have participated in the realization of this research assignment.
My sincere gratitude goes to:
 Our supervisor Mr. FOMINYAM JONATHAN who tirelessly made it
possible for this research assignment to be a success. This was through
his continues supervision and correction of our work before a conclusion
was made.
 To all the members of group A TCHINDA STEVE JONATHAN, FOPOSSI
KAYIM ROMUALD, AZANGUE ANITA MOSOH, WACTCHOM LAETITIA,
NAMEN GERMAINE, EPIE LIZETTE, ATIAMU LAURA, TESSY NGEUPI,
ATINGWA GHISLAINE, ST THOMAS, MELISSA and NETER who all gave
their all and through their numerous contributions and participation
made the work a success.
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i
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

ABSTRACT
The main purpose of this study was to investigate the impact of budgeting
on the performance of the organization. The study is guided by the
objectives to assess budget management practices; to evaluate the
performance of an organization with respect to budget implementation and
management; to determine the relationship between budget management
and performance of an organization. The study is carried out against the
background that many organizations have continued to perform poorly
despite management efforts to improve performance through training,
recruitment, motivation, monitoring and evaluation. This is evidenced by
low revenue collection and overspending compared to planned ones,
overdependence of grants from the government, low morale and
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

commitment of employees, claims and rumors from customers in respect to
poor services offered to them like corruption and bribes. The study focused
100 people from different departments of BAMBUI COOPERATIVE CREDIT
UNION Limited (BamCCUL, but the researcher collected views from 80
respondents, as shown from table 1.0, it can be seen that the study covered
80% of targeted population and therefore this study covered 80% (a good
representative sample) of the population to be relied on. Methods used, the
researcher has used questionnaire, interviews and the library research on
relevant materials. Data was analyzed using quantitative methods such as
regression analysis, including percentage distribution and frequency
distribution. Findings are presented in paragraphs following challenges and
impact on challenges observed, and discussed. Lastly, the researcher
recommended the following ways for improving budgeting, participatory
management, proper follow up and monitoring of activities to take
corrective action of deviations of the standard sited in the budget.
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN
ORGANISATION: CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited
(BamCCUL), CAMEROON

CHAPTER ONE
1.0 INTRODUCTION
This chapter highlighted the background of the study, statement of the
problem, hypothesis, research methodology, challenges, and the impact of
the challenges, proposed solutions and recommendations. Many
organizations face problems as far as budgeting was concerned. This is due
to lack of proper planning, un-participatory budgeting process, low level of
budgeting education, lack of effective and efficiency control measures which
led to poor performance of local government. In this research, the
researcher was studying how budgeting and its process affects the
performance of an organization.
1.1 Background of the study
There is no business that operates in a vacuum there must be an
environment where it operates, no matter how big and decorated the
organization is, it must face competition which may led to loss to the
business hence lead to insolvency. Due to this, modern business has seen
the importance of using budgeting in their day to day operation to cut cost
so that they could out complete the competitors hence improving the
organization. Although budgeting seemed to be used by almost all the firms
in the current business world. Due to dynamic changes such as macro-
economic factors which include: interest rate, inflation, government policy
and technology as well as need for competition it becomes very hard for any
business to stick to the set budget without making changes. This makes it
hard for a firm to have one static budget. These changes increase the cost of
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN ORGANISATION:
CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited (BamCCUL), CAMEROON

business thus reducing the profit of the business. It also contributes to the
tying up of capital since some funds must be set to cater for uncertainties.
Companies always get goals to be achieved within a specific period of time.
Whenever these goals are set up, action plans are designed to guide
members of the company towards achieving the set goals. Plan drawn may
include a detailed annual financial plan known as a budget.
A budget is a forecast action expressed in monetary terms. It always
expresses management intention of attaining specific goals in a company.
Budgeting could be prepared for the company as a whole for selected
departments within a company or for various activities existing in the
company such as sales and production. So a budget is an estimated income
and expenditure for specific period of time. The purpose of a budget in a
company may be among others to compel planning and control processes,
improve communication and coordination, classification of staff authority
and responsibility, motivation of employees.
Budgetary controls on the other hand refers to frequent comparisons of the
actual performance of the company in order to take corrective measures.
This study is tailored towards examining the impact of budget management
or control on the performance of an organisation.
Budget controls are usually not effective and efficiently practised by many
organisations as required. So lack of strong commitment to enforce
budgetary organisations as required is the major concern of budge
management. Specifically, the problem includes:
 Failure to explain budgetary variances by managers
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN ORGANISATION:
CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited (BamCCUL), CAMEROON

 Managers not paying close attention to budgetary details hence
producing budgets with slacks
 Managers not retaining relating plans of activities into budget and poor
attitudes towards budget controls by managers who operate in a free
environment without budgetary controls.
The purpose of this study is therefore to examine the impact of budget
management on the performance of an organisation with the following
specific objectives:
1) To assess budget management practices in an organisation
2) To evaluate the performance of an organisation with respect to budget
implementation and management
3) To determine the relationship between budget management and
performance of an organisation.
The following research questions can be asked in order to address the
specific objectives above:
1) Does a given organisation practice budget management?
2) How effective is budget management on the performance of an
organisation?
3) Is there a relationship between budget management and performance of
an organisation?
The scope of this study is focused on the budget management impact on
organisational performance.
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THE IMPACT OF BUDGET MANAGEMENT ON THE PERFORMANCE OF AN ORGANISATION:
CASE STUDY OF BAMBUI COOPERATIVE CREDIT UNION Limited (BamCCUL), CAMEROON