VARIANCE ANALYSIS: A CONTROL TOOL FOR PUBLIC SECTOR BUDGETING IN NIGERIA
Variance Analysis constitutes a vital tool for planning and control as it provides a useful tool of facilitating decision-making in both the public and the private sector. In many organizations, particularly in the public sector, the production of results compared to budget is seen as a worthless exercise. Consequently, the savings that could have emerged from the variances for provision of essential services by the government are lost due to negligence. This study examines the relevance of variance analysis as a control measure in the Nigerian public sector budgeting. The data were sourced through questionnaire administered on forty (40) members of staff of the Accountant General Office in the Kwara State Ministry of Finance using purposive random sampling technique. Descriptive statistics such as frequency distribution and percentages were used to describe the socio-demographic characteristics of the respondents, while skewness and kurtosis statistics were used to determine the normality of the data. Inferential statistics via the use of Crobach Alpha statistics and correlation analysis were used to conduct a check and balance test on the distribution, while multiple regression analysis model was formulated to provide answer to the research questions raised. Overall, the results confirmed the limited application of variance analysis as a control measure in public sector budgeting. The study advocates the proper functioning of budget department in the ministry of planning to monitor the spending of MDAs through monthly returns of their financial activities as this will enhance reliable budgeting procedure in the public sector.
