FACTORS AFFECTING THE EFFECTIVENESS OF GOVERNMENT EXPENDITURE BUDGET MANAGEMENT IN THE CASE OF ETHIOPIA'S MINISTRY OF FINANCE

Abstract

Budget is an important component in county government planning and decision making. A budget system that functions well is important to develop sustainable fiscal policies and economic growth. In developing countries, budgetary institutions are in their infancy and are mainly used as tools for legalistic controls and micromanagement. The general objective of the study was to evaluate factors that affect the effectiveness of budget management in the ministry of finance of Ethiopia. To conduct the study both primary and secondary data were used. Primary data were collected from MOF staffs using questionnaire and interviews. SPSS 23 versions were used to analyze the collected data. The findings show that budget experts’ staff competency has strong impact on the budget management, there is a problem with MOF salary scale to attracts and retains qualified and experienced experts. Government budget laws and regulations have significant effect on the government budget management; MOF has weaknesses in updating and revising the budget laws and regulations. Regarding the applications of IFMIS the Ministry prepares and executes the budget using IFMIS; however, it has still a room for the improvement of personnel knowledge & expertise for the effective implementation, operation, & maintenance of IFMIS. MOF should provide trainings on the government budget management, public financial management and government accounting system to the public accounts standing committees of the legislative organs.