Traditional Budgeting System and Factors of Investment Decision Making Processes in Public Higher Institutions in South-Western Nigeria

Abstract

The mismatch between available public resources and the growing demand for tertiary education is a challenge on investment decision processes (IDPs). This has adverse effects on teaching, research and the provision of infrastructural facilities in State-owned Tertiary Institutions (SOTIs). Also, this challenge has raised concerns about the effectiveness of the traditional budgeting system (TBS) in addressing the problem of disconnect between budget allocations and needs of SOTIs. Descriptive survey research design was adopted. Multistage sampling procedure was adopted in selecting 448 officials of state ministries, 59 members of state legislative house committees and 773 officials of SOTIs in Oyo, Ogun and Osun State. Two instruments used were: Traditional Budgeting System Scale (r=0.82), and Tertiary Institutions Investment Decision Scale (r =0.74). Research questions were answered and three hypotheses tested at 0.05 level of significance. Data were analysed using descriptive statistics, pearson’s product moment correlation and multiple regression. Results showed that, traditional budgeting system had a positive significant predictive effects on IDPs (F(7.1198) =74.222) and contributed 30.2% to the variance of IDPs. The relative contributions of TBS components were as follows: performance-based allocation. This shows that performance-based allocation had the highest contribution to IDPs compared to the two other components. Also, TBS significantly correlated with the component parts of IDPs in sampled SOTIs as follows: decision-making (r=0.534), controlling of programmes (r=0.403), coordination of programmes (r=0.202), monitoring of programmes (r=0.175). Traditional budgeting system positively predicted investment decision processes in state-owned higher institutions. There is the need for the proper integration of all three types of traditional budgeting system for more efficient investment decision in state-owned territory institutions. The mismatch between available public resources and the growing demand for tertiary education is a challenge on investment decision processes (IDPs). However, this challenge has also raised concerns about the effectiveness of the traditional budgeting system (TBS) in addressing the problem of disconnect between budget allocations and needs of SOTIs. Descriptive survey research design was adopted. Multistage sampling procedure was adopted in selecting 448 officials of state ministries, 59 members of state legislative house committees and 773 officials of SOTIs in Oyo, Ogun and Osun states. Two instruments used were: Traditional Budgeting System Scale (r=0.82) and Tertiary Institutions Investment Decision Scale (r=0.82) and Tertiary Institutions Investment Decision Scale (r=0.74). Two research questions were answered and three hypotheses tested at 0.05 level of significance. Data were analysed using descriptive statistics, Pearson’s product moment correlation and multiple regression. Traditional Budgeting System had a positive significant predictive effects on IDPs (F(7,1198)=74.222) and contributed 30.2% to the variance of IDPs. The relative contributions of TBS components were as follows: performance-based allocation (β=-0.052). this shows that performance-based allocation had the highest contribution to IDPs compared to the two other components. Also, TBS significantly correlated with the component parts of IDPs in sampled SOTIs as follows: decision-making (r=0.534), controlling of programmes (r=0.403), coordination of programmes (r=0.202), traditional budgeting system positively predicted investment decision processes in state-owned higher institutions. There is the need for the proper integration of all three types of traditional budgeting system for more efficient investment decision in state-owned tertiary institutions

Keywords: Traditional Budgeting System; Investment Decision Making; Higher Institutions; Processes; Factors


Article Review Status: Published

Pages: 1-16 (Download PDF)

Creative Commons Licence
This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License