THE EFFECT OF BUDGET PREPARATION AND UTILIZATION ON ORGANIZATIONAL PERFORMANCE IN CASE OF WORABE TOWN ADMINISTRATION

ABSTRACT Budget utilization is the phase where resources are used to implement policies incorporated in the budget. Realizing this, the general purpose of this study was to investigate the determinants of effective budget preparation and utilization on organizational performance in werabe town administration. The determinants relevant to effective budget preparation and utilization on organizational performance were the resource allocation, budget planning process, monitoring and evaluation and stakeholder involvement. The researcher used both descriptive and explanatory research design with quantitative research approach by taking 126 employees were selected total population of 182. The researcher used non-probability sampling method with purposive sampling technique. The data collected through standardized Likert-scale questionnaire and analyzed by using both descriptive and inferential statistical tool (ANOVA, correlation and regression). The study used SPSS V21 statistical tool for analyzing the collected data. The regression result showed that the independent variables used in the study explain 70% variability on budget preparation and utilization on organizational performance. The beta coefficients of this study indicated that monitoring and evaluation have a large effect on budget preparation and utilization on organizational performance followed by negative stakeholder involvement. This study in general showed that all the independent determinant variables included in this study have a positive and statistically significant effect on budget preparation and utilization on organizational performance. Therefore werabe town administration needs a continuous and consistent attention to attract, satisfy and retain stakeholders and to improve organizational performance and efforts to achieve the organizational goal and objectives as a whole.