DETERMINANTS OF EFFECTIVE BUDGET UTILIZATION THE CASE OF GURAGE ZONE FINANCE

Abstract

The purpose of this study is to determine factors affecting budget utilization in gurage zone. To accomplish this objectives Descriptive research type were adopted. The study employed both qualitative and quantitative approach. From 16 woredas, 9 woreda selected 4 town administrations by random sample, city administration finance office and zone finance office are selected. The study used the response from 259 employees directly related to budget preparation, implementation and controlling .primary data were collected through questionnaire. The researcher used questionnaire to collect data for the research. The questionnaire contained open and closed ended questions and covered areas of budget utilization to come up with good raw data for the research. All collected information was analyzed by using both descriptive, multiple linear regression models and ANOVA testing. Data obtained from respondents were entered into STATA12 for analysis. For this study, six independent variables were identified including, fund diverting, and management support, inflation rate, government policy, and staff capacity and auditing. Therefore based on output of STATA12 the following variables fund diverting, staff capacity, management support, auditing, and inflation rate affects budget utilization significantly. The remaining five variables, fund diverting, management support, inflation rate, staff capacity and auditing are insignificant at p>0.05. Then, the researcher recommended that gurage zone public organizations should understand the contributions of these five variables to poor budget utilization in the public sector offices.