RISK MANAGEMENT AND BUDGETING TOWARDS EFFECTIVE RESOURCE UTILIZATION: THE CASE OF PRIVATE HIGHER EDUCATIONAL INSTITUTIONS IN QUEZON

Risk management and budgeting practices are deemed to be important areas for better resource utilization and overall financial health of a business. Risk management aims to ensure that business risks faced by a company are identified, measured, monitored and evaluated to avoid any detrimental effect and serve as opportunities to improve the financial operation of the business. On the other hand, the primary role of budgeting is resource allocation across various items and among different departments. This study wanted to evaluate the effect of having implemented risk management and budgeting practices to the financial health of private Higher Education Institutions (HEIs) in Quezon. It was concluded that the current implementation of risk management and budgeting practices does not have a direct impact on the financial health of the responding schools, a measure of effective resource utilization. At the current level of implementation (3.62 for risk management procedures, 3.88 on practices of countering business risks, and 3.51 on budgeting practices), it has no direct effect on the proper utilization of resources. Other factors may have played a role. From the results of the financial health analysis, it is shown that most of the responding schools have a high probability of financial embarrassment. It could mean any of the following scenarios: a) profit rate is low, b) cash outflow is greater than cash inflow, c) current assets is lesser than current liabilities, d) low accounts receivable turnover, and e) investment in facilities despite the lack of funds. Based on the regression analysis, it is shown that the current level of implementing risk management and budgeting practices has no effect on the financial health of the responding schools, a measure of effective resource utilization. This result, however, is not conclusive. There is a possibility that at a higher level of implementation may result in the better financial health of a company.