Budgetary monitoring and financial accountability of insurance companies in Uganda. a case study of excel insurance limited.

Abstract

The study assessed the relationship between budgetary monitoring and financial accountability at Excel Insurance Limited. It was guided by three objectives i) to examine the relationship between cashflow monitoring and financial accountability at Excel Insurance Limited, ii) to analyse the relationship between premium forecast and financial accountability at Excel Insurance Limited, iii) to assess the relationship between variance analysis and financial accountability at Excel Insurance Limited. The study adopted a mixed method research design using a cross-sectional research duration and explanatory research classification. The study population was 125 and a sample size of 92 respondents participated, presenting a response rate of 86.9%. The quantitatively collected data was analysed using correlation and regression analysis while qualitatively collected data was analysed using content analysis. Results revealed that the most effective predictor to financial accountability is variance analysis (Adjusted R Square of 0.485), followed by cashflow monitoring (Adjusted R Square of 0.464) and the least contributor is premium forecasts (Adjusted R Square of 0.343). The test also revealed that Excel Insurance Limited has a statistically significant positive relationship with financial accountability since all p values were below the alpha of 0.05 and as such the null hypothesis was rejected. In conclusion, Excel Insurance Company appears to lack regular engagement of senior management in cashflow reporting and does not consistently maintain operational cash reserves. It was also concluded that forecasts are often not aligned with company financial goals, nor are they adjusted in response to market changes, suggesting a rigid and disconnected forecasting system. The study recommended that Excel Insurance Limited should formalize monthly cashflow forecasting sessions where projected inflows and outflows are estimated and reviewed by finance and senior management to anticipate cash shortages. It was recommended that the company should schedule regular quarterly forecast revisions based on market performance indicators, allowing management to adjust financial plans and maintain budgetary alignment. The study recommended that the company should establish a formal process for variance investigation that includes root cause analysis, documentation of findings, and assignment of responsibility for corrective actions.