Abstract:
Proper budget utilization is a priority for any organization. The deviations between actual and
planned that hamper proper budget utilization could be contributing directly or indirectly to the
service delivery. Allocating more money by itself does not necessarily produce results, it is
crucial to ensure that resources throughout the system are used more efficiently. The purpose of
this study is to assess the practice of budget allocation and utilization, identify major challenges
and factors affecting proper budget utilization in Jimma University. The researcher used
descriptive and explanatory types of research design and both primary and secondary data
collection technique. Primary data were collected from finance employees and officers, planning
office experts and internal auditors, deans, directors and administrator by open ended and
closed ended questionnaires. Secondary data was collected from the IBEX database of Jimma
University for the past five years (2007-2011 E.C) .The target population of this study were 80
employees of Jimma University. The researcher used census sampling technique because census
is a process of collecting data by distributing questionnaire to all population in the study area.
The collected data was analyzed using SPSS version (23). In addition, descriptive and
inferential statistical tools such as mean, percentage, frequency, normality test, correlation and
multiple regressions were used to analyze the collected data from questionnaires. This study
result indicated that lack of adequate data, lack of transparency, lack of clear criteria, lack of
accountability, frequency of requested additional budget, strict procurement procedure, strict
finance procedure, employee turnover, planning gaps, lack of adequate training for staff are
challenges to allocate and utilize budget very well. On the other hand decentralization of
finance office, automation and monitoring & evaluation system are the strength of Jimma
University with respect to budget utilization. Therefore, Budget prepared and allocated must be
utilized on time effectively and efficiently for the right purpose by following financial calendar of
the University.
