The effect of proper budgeting and accountability to the development of the public sector

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND TO THE STUDY

The world today has embraced globalisation, a complicated process, focusing on how events,

decisions and activities in one part of the world can have consequences in other parts of the

world (Lee & Collin 2005), to achieve a defined business purpose. However, just when we

thought we had seen the depth to which an otherwise healthy economy can reach, world

events continue to occur  that change every business  plan significantly (Lalli,  2003).  The

harsh reality of this decade is that it is comprised of massive corporate layoffs, lower profits,

bankruptcies and even in the public sector, cases of corruption and mismanagement of funds

remain rampant. In fact, resources are drained and redirected but the greatest accountants,

brightest economists, most insightful analysts, and professional budget masters still continue

to   evolve   theories   to   ensure   that   financial   information   is   produced,   implemented   and

adequately accounted for.

According   to CIMA, a budget is defined as “a quantitative statement for a certain period of

time, which include revenues, assets, liabilities and cash flows. According to Dubnick (2002),

the beginning of the contemporary concept can be found to be the reign of William I, in the

many years succeeding the 1066 Norman conquest of England. Accountability is one of those

golden concepts that no one can be against (Bovens, 2005). It is used as a synonym for many

loosely   defined   political   desiderata,   such   as   transparency,   equity,   democracy,   efficiency,

responsiveness, responsibility, and integrity (Mulgan 2000; Behn