A mixed methods study of influences on perceived budgeting accuracy in UK universities

Abstract

Purpose

The accuracy of budgeting is important to fulfilling its various roles. The aim of this study is to examine perceptions of budgeting accuracy in UK universities and to identify and understand the factors that influence them.

Design/methodology/approach

A mixed methods research design comprising a questionnaire survey (84 responses, = 51.5%) and 42 semi-structured, qualitative interviews is employed.

Findings

The findings reveal that universities tend to be conservative in their budgeting, although previous financial difficulties, the attitude of the governing body and the need to convince lenders that finances are being managed competently might lead to a greater emphasis on a “realistic” rather than cautious budget. Stepwise multiple regression identified four significantly negative influences on perceived budgeting accuracy: the difficulty of forecasting student numbers; difficulties associated with allowing unspent balances to be carried forward; taking a relatively long time to prepare the budget; and the institution’s level of financial surplus. The interviews are drawn upon to both explain and elaborate on the statistical findings. Forecasting student numbers and associated fee income emerges as a particularly challenging and complex issue.

Research limitations/implications

Our regression analysis is cross-sectional and therefore based on correlations. Furthermore, the research could be developed by investigating the views of other parties as well as repeating the study in both the UK and overseas.

Practical implications

Implications for university management follow from the four factors identified as significant influences upon budget accuracy. These include involving the finance department in estimating student numbers, removing or controlling the carry forward of unspent funds, and reducing the length of the budget cycle.

Originality/value

The first study to examine the factors that influence the perceived accuracy of universities’ budgeting, this paper also advances understanding of budgeting accuracy more generally.

Citation

Cropper, P. and Cowton, C. (2024), "A mixed methods study of influences on perceived budgeting accuracy in UK universities", Journal of Applied Accounting Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAAR-11-2023-0337