The Influence of Budgetary Planning on Return on Investment at the National Social Security Fund, Kenya

Abstract

Budgetary control systems the world over are considered indispensable tools for financial planning. The purpose of budgetary control is to provide a forecast of revenues and expenditures which is achieved through constructing a model of how business might perform financially if certain strategies, events and plans are carried out. The study sought to assess the relationship between budgetary control and return on investment at the National Social Security Fund, Kenya. Based on the study, this paper examines the extent to which budget planning influence return on investment at the NSSF. The study was guided by Budget Theory. A correlational research design was used in the study. The target population comprised 1409 employees and board members of the NSSF. Sample size was obtained using Krejcie and Morgan model and stratified random sampling technique was used to obtain the sample. The collected data was analysed using both descriptive and inferential statistics and presented using charts and tables. Multiple regression was used to test hypotheses. The study established that budget planning had negative (β=-.096) but a significant (p=0.049) relationship with ROI. Therefore, the null hypothesis was rejected. The study recommended that corporate financial plans be incorporated into the budgetary process. This will assist the management and board to produce cost-effective budgets.