Weaknesses of financial planning and budgeting : a case study of a dairy primary co-operative society (Chawamu) in Muheza District, Tanga Region

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Southern New Hampshire University
The Chama cha Wafugaji Ng'ombe wa Maziwa Muheza (CHAWAMU) is a primary co-operative society owned by some dairy farmers in Muheza township. Just at a glance at this CHAWAMU, the Society does not have good financial records. The records are in piecemeal, which cannot give any well articulated information for use in the daily running of the Society. Therefore, basing on that fact, I became interested and decided to do a study on the weaknesses in financial planning and budgeting, with the intention of finding solutions to the problem. The study revealed that the mission , objectives and other different activities currently being undertaken by the co-operative, include the heifer credit system, training, dairy keeping, record keeping system and financial information of the organization. The study also brings up the intrinsic problem of poor financial planning and budgeting as is clearly indicated by the poor and incorrect recording of finance, marketing, sales and production data.Literature review has highlighted the existing gap, that CHAWAMU is not able to do proper financial planning and budgeting. It has been discovered that CHAWAMU's problems are caused by poor management capacity i.e. no planning is done, members are not participating democratically in financial planning and running the cooperative in general. The study was done by collecting data through structured questionnaire, interviews and meetings. The final data analysis was done using Special Package for Social Sciences (SPSS) tool. The research findings were members have poor knowledge and ignorant on dairy production, cooperative principles are not used, market and production activities are not done properly, lack of knowledge planning and record keeping It has been recommended members and cooperative executive staff to be trained in management of the cooperative specifically; proper financial planning and democratic decision making when managing and administering the cooperative. Also enterprise development, financial record keeping and all other farm records should be properly and continuously done. Finally monitoring, evaluation and control should always be done thoroughly. (Author abstract)