Factors leading to supplementary budgets in parastatals in Kenya
Supplementary budget places an enormous burden on middle-income earners, between massive taxes on gross income, loss of early childcare supplement and loss of mortgage interest relief (Louderback, 2001). In the banking industry a strong relationship is evident between a formulated budget and an implemented budget. However, a modest degree of adjustment is desirable during execution to allow for the occurrence of events which were unknown or uncertain at the time the budget was authorized. The study adopted a descriptive case study research design. The population of the study consisted of all the Parastatals in Kenya. There are 101 Parastatals in Kenya (Source: Office of Prime Minister- Office of Inspectorate of State Corporations 2010). Simple random sampling was used to select the parastatals used in the study. The researcher selected 29 Parastatals. Primary data was collected using semi-structured questionnaires distributed to treasury officers in sampled parastatals in Kenya. The researcher used both quantitative and qualitative methods. The data collected was checked for completeness and coded for analysis. Descriptive statistics such as mean scores frequencies and variances was used to interpret the quantitative data. From the findings the study found that factors leading to supplementary budgets in parastatals in Kenya were; budget errors, lack of strict laws governing procurement, poor planning, flexibility in parastatals operations and organizational culture that does not adhere to the budget. These factors cause variance between planned budgets and budgets as implemented in parastatals in Kenya. The study also found that supplementary budgeting was important to parastatals operations to a great extent and that it helps them achieve their objectives and helped them not to work under constrained resources. The study further found that there were greater variation between planned budget and the implemented budgets in parastatals in Kenya which were resulting from errors and poor planning.