The Effect of Budget Formulation on the Public Sector Effectiveness Moderated by Participative Budgeting in Addis Ababa City Administration

Abstract

The study aimed to assess the budget formulation and control practice in the Addis Ababa City administration. The study encompassed 30 public sectors, consisting of 11 sub-cities and 19 other sectors ranked at the first and second levels. Data were collected through a structured Likert scale questionnaire, with a total of 368 respondents contacted and 346 completed questionnaires returned. Descriptive statistics were employed using SPSS 26 for analysis. The average mean results of the variables in the study indicated that the majority of respondents expressed their disagreement with the overall effectiveness of the budget process, encompassing budget formulation and control. The analysis focused on various factors related to budget formulation and control, including strategic planning, budget preparation, budget approval, budget implementation, monitoring and evaluation, audit, accounting and reporting, and organizational effectiveness. To enhance effectiveness in the public sector, it is recommended that the city administration's public sectors align strategic planning with budget preparation, ensure timely budget approval, minimize underutilization of the budget, and maintain appropriate budget follow-up.