Budget Utilization And Its Determinants In West Shoa Zone: The Case Of Finance And Economic Cooperation Office, Oromia, Ethiopia

Abstract

The purpose of this study is to examine budget utilization and its’ determinants in West Shoa Administrative Zone. To accomplish this objective, descriptive research design was adopted. The study employed both qualitative and quantitative approach. From 22 districts, ten districts offices were selected by census sample method. The study used the response from 80 employees directly related to budget preparation, implementation and controlling. Ten-year (2012-2021) data were collected from secondary sources to analysis trend budget utilization .The trend analysis results shows there is gap between adjusted budget and actual expenditure not linear increased from year 2010 - 2021 year and fluctuation of adjusted budget utilization in West Shoa Zone. Also primary data were collected through questionnaire and interviews. The collected data was analyzed by using both descriptive, ordered logistic regression model and ANOVA testing. ANOVA analysis indicates there is statistically difference in budget underutilization from one district to other districts in West Shoa Zone. For this study, five independent variables were identified including auditing and monitoring, tax collection capacity; fund diverting, staff capacity and working culture of the organization in regression model. Therefore; based on output of STATA Version 13 the variables including tax collection capacity, fund diverting, and working culture of the organization affects budget utilization significantly. The remaining two variables staff capacity and auditing and monitoring are insignificant at p>0.05. Then, the researcher recommended that West Shoa Zone finance and cooperation zone should understand the contributions of these three variables which affect budget utilization and provide effective training on them for his employees in effective and efficiency time manner.