Practices and Challenges of Capital Budget Utilization: The Case of Dendi Woreda Ginchi Town Municipality

Abstract

The objective of this research was to examine the practices and challenge of capital budget that is one of the most important factors for the success of an organization. The purpose of this study is to assess and describe the practices and challenge of capital budgeting in DendiWoreda. The practices and challenges of capital budgeting of the Ginchi Town was examined using an analytical frame work of Likert scale measurements. Case study design with mixed research approaches is employed. Research evidence was gathered distributing questionnaires to managers and experts who are involved in practices and challenges of capital budgeting of the Ginchi Town and Interview and document reviews were conducted to get sufficient evidence in evaluating the practices and challenge of capital budgeting. The result shows that practice and challenges of capital budgeting of the Ginchi Town is in line with the theory of capital budgeting and empirical evidences. The Ginchi Town’s capital budgeting task organization which the study tried to assess from planning, evaluation, implementation and post evaluation work processes are found to be in line with the theory and the practices addressed in the literature review section of the study. The study found that shortage of skilled manpower to be practices and challenge for the capital budget of the Ginchi Town. Therefore, the researcher recommends to the management of the Municipality office to focus on short term training to fill the gap of knowledge which is implicated to exist in the study.