Implementation of program and performance budget, planning, controlling, and spending rationalization in Iraqi public universities

Abstract

The achievement of the universities’ stated goals depends primarily on the success of the budget preparation system. Iraqi public universities apply the traditional method of budget preparation. This method has been criticized for its inability to meet the requirements of planning, control, public spending, and resolving the deficit. Therefore, this study examines an alternative budget system represented by a program and performance budget (PPB). The study aims to explore the challenges of implementing the PPB, the necessary processes involved, and the potential advantages of the PPB to Iraqi universities. In addition, the study examines the impact of the PPB on the planning, controlling, and spending rationalization. The underpinning theories for this study are change theory and institutional theory. The study employed qualitative and quantitative research designs to collect and analyze the data. The study population is represented by 29 public universities. Three universities were chosen for the interview, and each university included top management and the finance department in two groups of 5 people each. The top management and the finance department are the employees most informed about the university’s plans and objectives. Data were collected by adopting focus group discussions (FGD) with the determined groups. Regarding the survey, six universities were selected, including 113 faculties, with a total of 339 respondents. The questionnaires were distributed to managers of three departments: accounts, control and audit, and human resources because these departments are the most closely related to spending operations, monitoring financial transactions, and making decisions. The study used NVivo software to analyze data from the FGD using the word cloud display. The Statistical Package for the Social Sciences (SPSS) software and AMOS were utilized to analyze the questionnaire data descriptively and inferentially. According to the qualitative results, the most critical challenges in PPB implementation in Iraqi public universities include management competence, organizational commitment, and financial constraints. The most essential PPB implementation processes were represented by two major themes that have emerged, namely the measurement system and implementation approach. The vital advantages that Iraqi universities could obtain in adopting PPB in preparing the budget are, for example, better financial management, increased budget transparency, and improved coordination activities. Finally, based on the quantitative results, the study concluded that PPB could support planning, enhance control, and influence spending rationalization in Iraqi universities. That is, PPB has a positive effect on planning, control, and spending rationalization in Iraqi public universities. The study contributes by providing results that can be considered as a guide for financial policymakers (Ministry of Finance, Ministry of Planning) to apply the PPB in Iraqi public universities in the future. Also, this study provides empirical evidence for the potential implementation of PPB in developing countries.