The objective of the research was to examine the budgetary practices in Private/ Mission hospitals. The population of interest in this study was all Private/ Mission hospitals in Nairobi. The Kenya Medical Directory 2005 indicated that there were 58 Private/ Mission hospitals of all sizes in Nairobi. However, two additional hospitals were included in the study from the environs.
Structured questionnaires were used as the main data collection instrument. The questionnaires included both open and close-ended questions. The close-ended questions provided more structured responses to facilitate tangible recommendations. The data was then coded to enable the responses to be grouped into various categories. Thereafter, descriptive statistics and content analysis were used in this study. The content analysis was used to analyze the respondents’ views about the stage in the budgeting process that took the longest and shortest time. For descriptive analysis, a database was prepared using the Statistical
Package for Social Sciences (SPSS) computer package and data analysed using frequency tables, percentages, means and standard deviations. Graphical presentations as appropriate were used to present the data collected for ease of understanding and analysis. The study concludes that most of the hospitals budget committee members consisted of Accounts and Finance individuals. Other departments such as Human Resource Management, Procurement and Marketing were not involved much in the budget committee. In addition, the study concludes that, the Managing Director of the institutions made the final decision on
budget proposal, while other departments and sectors such as board of directors were left out in the process. On effectiveness of budgeting process, the study concludes that majority of the hospitals did not follow the establishment of objectives and evaluation of alternative strategic plans in the stages of budget planning. The study recommends that for effective budgetary planning, all departments need to be
involved in the budget committee. The complexities involved in preparing the budget and implementing the budgetary control system are many. Management has to put in an effort to ensure that the basic objectives of budgeting are achieved. For effectiveness of the budgeting process, modifications are necessary after the budgets are drawn in order to include areas that  may have been left out. In addition, all stages of budgeting planning need to be followed.

The study also recommends that in order to overcome problems of budgeting, institutions need to develop strong financial integration with performance management and have appropriate timing of the financial plan. There can be many problems with budgets but by recognizing the potential problems early, institutions can save themselves and businesses from a lot of grief and potential bankruptcy.


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