Assessment Of Capital Budget Utilization Performance: A Case Study At Ambo Town Municipality On Cobblestone And Gravel Road Budget

Abstract

This study is aimed to examine the practice of Capital budget utilization for construction of Cobblestone and Gravel road. The study used descriptive type of research in the case of Ambo Town Municipality. A non-probability (purposive) sampling technique was employed and the primary and secondary data collection instruments comprised of self-administered questionnaire, semi structured interview, field observation, reviewed documents and five-year data has been collected from secondary sources. The study employed both qualitative and quantitative approach to collect essential data.66 respondents have participated on questioner and 5 on interview from selected organizations. The data is analysed by using SPSS and study has found that: the municipality existing capital budget utilization for construction of Cobblestone and Gravel roads is poor . The finding discovered that budget utilization significantly affected by staff capacity, contractor’s capacity, diverting fund from planed activities to unplanned one, supervision system and project delays whereas Revenue collection, macroeconomic variable (inflation) and political instability has no significantly effects on budget utilization. The study recommended that to enhance the efficiency of capital budget utilization performances Ambo Municipality should focused to on time approval and allocation of the budget and leadership qualities and employee’s commitment, and establish a system to fight against rent-seeking behavior of employees. To protect delays of capital projects and its weak quality, strong rules and society involvement is essential. In addition focusing on planed program, strong supervision system, re-structuring planning and construction and design department are the most critical mechanisms to overcome challenges in budget utilization as a solution in Ambo Town Municipality. Finally, the research paper addressed the need for improving the budget utilization based on findings, recommendations to Ambo Municipality and its workers together with the concerned government bodies, and suggestions for other researchers are forwarded.