Mismanagement Of Funds In The Church

This study was carried out to examine mismanagement of funds in the church: issues and prospects using Universal Reformed Christian Church, Abuja branches as a case study. The study was specifically carried out to determine the prevalence of fund mismanagement in Nigerian Churches, identify the forms of fund mismanagement in Nigerian Churches, find out the factors considered as the root causes of fund mismanagement in Nigerian Churches, and find out the consequences associated with fund mismanagement in Nigerian Churches. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of the entire workers of Universal Reformed Christian Church, Abuja branches. In determining the sample size, the researcher purposefully selected 57 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores. While the hypotheses were tested using Chi-square statistical tool. The result of the findings reveals the prevalence of fund mismanagement in Nigerian Churches is high. The findings of the study further revealed that the consequences associated with fund mismanagement in Nigerian Churches includes: it erodes trust and credibility within the church community, diversion of church resources from the intended purpose, financial instability within the church, financial instability within the church, internal conflict, loss of donor confidence. Therefore, the study recommends that there is need to implement a robust financial reporting and disclosure mechanisms to provide members and stakeholders with regular updates on church finances, including income, expenses, and asset management.. To mention but a few.

Introduction

1.1 Background of the Study

Religion organizations especially the church is now being considered as the biggest and one of the most important organisations in the world (Harris 1990; Booth 1993). The world is estimated to be composed of about 2.3 billion Christians, which is 33% of the overall population, and is expected to reach 3 billion by 2050 (Pew Research Centre, 2017). According to Wikipedia, Christianity has about 4.5% of the population in Nigeria. The main object of the church has been the spiritual and moral development of its members. To add to this, attention has now been shifted to the development of their mental, social and economic welfare. Consequently, a number of churches are embarking on developmental projects in their communities and even on a national scale (Mpesha, 2003). They also try to cater not only for the educational and psychological needs of their members but to the society at large. The church has hence gradually become a development partner in all societies. In order to undertake these activities, the church requires funds.

The church receives its funds from members, donor groups and indeed the general public (Lightbody, 1999; Gruber, 2004; Ahiabor & Mensah, 2013; Mitchell, 2015). There is therefore the need to account for the use of funds to the funding sources. In spite of their countless features, the church has been engaged in many financial scandals. Earlier this year (2020), there was a report of the Winners Chapel"s accountant in the Northern part of Nigeria that made away with millions of church"s offerings and tithes in his care.. In addition, the National Executive Council of Voice of the Lord Church in Ghana fired their President for misapplication of funds and poor financial management. He was accused of misallocating funds, unilaterally acquiring loans for projects on the church"s behalf, running down the education fund, among others (Ghanaweb, 2018). According to the Centre for the Study of Global Christianity (2015) an estimated $50 billion of funds from Christians was lost to fraud and embezzlement with about $1.3 billion perpetrated in Africa. The Religious Financial Fraud report (2017) also recorded that Christians committed crimes worth about $ 59 billion in 2017.

These events have further intensified the scrutiny on the financial management system of churches. The leadership of some churches has sought to prioritize their general management approaches (Shaibu, 2013; Ahiabo & Mensah, 2013). This has led to the rise in expectation of the church to improve its financial management systems so as to guard against losing its reputation as the trustworthy custodians they were seen to be in the past. The church aims to manage funds above reproof by maintaining high standards (Shaibu, 2013) so they could be the benchmark for society, they are meant to be in Matthew 5:13. Consequently, it is prudent that adequate and effective financial management systems and processes are adopted and implemented (Harris, 1990; Booth, 1993; Shaibu, 2013; White & Acheampong, 2017). Moreover, the further rise in interest of the church"s financial management system is also attributed to the large amounts the churches" receive from the public. This prompts religious leaders and the public concerned about the management of such huge amounts. The funds made available to churches by their members and donors continuously experience significant growth as the years go by. Church members have thus begun to show more and more interest in how these funds are managed. At general meetings the churches hold to account for activities and resource usage, a lot more of the enquiries made were financial management. For instance enquiries about the rising operational costs of the church, the nature of insurance adopted the methods of accounting presentation used, among others.

There is the need for a framework that clearly specifies how funds should be managed. The framework may include; policies, strategies, procedures and processes guiding mobilization; banking and cash management; investment, disbursement, auditing, records and information management activities (Public Financial Management Act, 2016). This framework is what is usually referred to as the financial management system. It must however be noted that the financial management systems and standards of the church have to be unique and tailored to suit their operations as they are nonprofit organizations. Various churches have thus put procedures and systems together over the years to suit the technicalities of the church"s operations.

Funds management entails proper planning, operation, control and account of all the financial resources in an organization. The goals of the organization are clearly spelt out and implemented in financial terms and facilitates goal attainment through proper policies. The main financial components of the church that have been of interest to researchers are funds management, investment management, internal controls and accountability (Leach, 1960; Laughlin, 1988; Harris 1990; Booth, 1993; Gruber, 2004; Agyei & Kusi, 2006; Shaibu, 2013). These components deal with how to manage finances even before receipt, to how the usage is reported to the stakeholders. The identification of each component allows for a complete insight into the whole financial management system of the organization, giving a more reliable expression of the quality of the management of financial resources. Therefore, this study will look at the issues and prospects of mismanagement of funds in the church by using Universal Reformed Christian Church, Nigeria as a case study.

1.2 Statement of the Problem

Several researches have been carried out all over the world to aim at understanding the unique management systems of the church (Leach, 1960; Laughlin, 1988; Harris 1990; Booth, 1993; Gruber, 2004; Agyei & Kusi, 2006; Shaibu, 2013). Most of these studies have however focused on discrete aspects of the financial management scope such as accounting and communication, internal controls, investment policy, among others instead of considering the whole system, hence failed to bring in-depth understanding to how the entire financial system operates. That is, evaluating a single financial management component is not enough to give a true reflection of the efficiency and effectiveness of the financial management practices of an entity.

The number of studies carried out to enable the understanding of the financial management in churches, especially in Nigeria, is inadequate compared with the exponential growth the church is experiencing, and the perception of increasing financial mismanagement and malpractices associated with them (Agyei & Kusi, 2006; Ahortor, 2009; Shaibu, 2013; Ahiabor & Mensah, 2013; White & Acheampong, 2017). Justification for the lack of such studies over the years is the difficulty in accessing available and accurate data. The few studies done as stated above also focus mainly on the orthodox churches (especially the Catholic, Anglican, Methodist and Presbyterian churches). The findings of some studies identified inadequate financial management practices, poor stewardship, lack of internal control systems and generally low interest or investment in financial literacy in the respective churches (Leach, 1960; Laughlin, 1988; Harris 1990; Booth, 1993; Agyei & Kusi, 2006; Shaibu, 2013). Based on the above, this study seek to assess mismanagement of funds in the church: issues and prospects.

1.3 Objectives of the Study

Generally, this study seek to examine mismanagement of funds in the church: issues and prospects. Specific objectives are stated below.

1. Determine the prevalence of fund mismanagement in Nigerian Churches.
2. Identify the forms of fund mismanagement in Nigerian Churches.
3. Find out the factors considered as the root causes of fund mismanagement in Nigerian Churches.
4. Find out the consequences associated with fund mismanagement in Nigerian Churches.

1.4 Research Question

The study will be guided by the following questions;

1. What is the prevalence of fund mismanagement in Nigerian Churches?
2. What are the forms of fund mismanagement in Nigerian Churches?
3. What are the factors considered as the root causes of fund mismanagement in Nigerian Churches?
4. What are the consequences associated with fund mismanagement in Nigerian Churches?

1.5 Research Hypothesis

Ho: Fund mismanagement has no negative effect on Nigerian Churches.

Ha: Fund mismanagement has negative effects on Nigerian Churches.

1.6 Significance of the Study

This study will be of immense help to future researchers, practitioners as well as to policy makers in crafting necessary policies for financial management in churches in the country. The output of this study if adopted, will aid church financial managers, accountants, treasuries, among others to gain a better understanding of the necessity in and need for improving their financial management systems by instituting measures aimed at ensuring accountability and fidelity in the church"s financial management system. It would also be of help to the leadership and members of churches by enabling them to understand how their church is performing financially, detect issues that need attention quickly, make informed decisions on their finances and how they are managed and reduce the incidence of financial scandals in the church.

This research will help future researchers to identify untapped and under researched areas with regards to the financial management of churches. It will serve as a blueprint for explanatory studies on the financial management of churches. Thus, the study will contribute to the scholarly works and literature in the field of studies regarding the financial management of the church and related organizations. It is hoped that this study and derived recommendations, would serve as a model to guide churches seeking to institute financial management systems to adopt these practices.

1.7 Scope of the Study

This study is structured to generally examine mismanagement of funds in the church: issues and prospects (a Case Study Of Universal Reformed Christian Church). Geographically, the study will be carried out at the Universal Reformed Christian Church, Abuja branches.

1.8 Limitation of the Study

Like in every human endeavour, the researcher encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. More so, the researcher simultaneously engaged in this study with other academic work. As a result, the amount of time spent on research will be reduced.

1.9 Definitions of Terms

Fund Management

Fund management in churches refers to the systematic administration and stewardship of financial resources, donations, and assets to support the mission, activities, and operations of religious organizations.

Fund Mismanagement

Fund Mismanagement in Nigerian churches has garnered significant attention in recent years, reflecting concerns about financial transparency, accountability, and stewardship within religious organizations.

1.10 Organizations of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.

Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on mismanagement of funds in the church: issues and prospects using Universal Reformed Christian Church, Abuja branches as a case study. The chapter consists of summary of the study, conclusions, and recommendations.

5.2 Summary of the Study

In this study, our focus was to examine mismanagement of funds in the church: issues and prospects using Universal Reformed Christian Church, Abuja branches as a case study. The study was specifically carried out to determine the prevalence of fund mismanagement in Nigerian Churches, identify the forms of fund mismanagement in Nigerian Churches, find out the factors considered as the root causes of fund mismanagement in Nigerian Churches, and find out the consequences associated with fund mismanagement in Nigerian Churches.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were workers of Universal Reformed Christian Church, Abuja branches.

5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

1. The prevalence of fund mismanagement in Nigerian Churches is high.
2. The forms of fund mismanagement in Nigerian Churches includes: embezzlement, misappropriation of offerings, inadequate financial oversight, excessive compensation, unauthorized borrowing or debt, excessive compensation for top church leaders.
3. The factors considered as the root causes of fund mismanagement in Nigerian Churches includes: lack of financial accountability, weak governance structures, pressure for growth and expansion, reliance on donations and offerings, lack of adequate financial literacy, and limited regulatory oversight.
4. The consequences associated with fund mismanagement in Nigerian Churches includes: it erodes trust and credibility within the church community, diversion of church resources from the intended purpose, financial instability within the church, financial instability within the church, internal conflict, loss of donor confidence.

5.4 Recommendations

Based on the findings of the study, the following recommendations are proffered.

1. There is need to implement a robust financial reporting and disclosure mechanisms to provide members and stakeholders with regular updates on church finances, including income, expenses, and asset management.
2. There should be an establishment of clear guidelines and procedures for budgeting, expenditure approval, and financial transactions to ensure accountability and prevent misuse of funds in Churches.
3. There should be a conduct of regular financial audits by independent third-party auditors to verify the accuracy and integrity of financial records and identify any irregularities or discrepancies.
4. There is need to encourage member participation and oversight through the establishment of financial oversight committees or advisory boards composed of independent members with expertise in finance, accounting, and governance.
5. There should be an establishment of a governance structures that promote checks and balances and prevent the concentration of power in the hands of a few individuals. This may include the adoption of democratic decision-making processes, term limits for church leaders, and mechanisms for the removal or accountability of leaders found guilty of financial misconduct.
6. Implementation of internal controls and risk management protocols to mitigate the risk of fraud, embezzlement, and other financial irregularities is recommended. This may involve segregation of duties, dual authorization for financial transactions, and regular internal reviews of financial processes and procedures.
7. There is need to foster a culture of transparency, integrity, and ethical conduct among church leaders and members through education, training, and ethical leadership development programs. Encourage open dialogue and communication about financial matters to promote awareness and accountability at all levels of the church hierarchy.

Title Page

Certification

Dedication

Acknowledgement

Table of Content

List of Tables

Abstract

Chapter One:

Introduction

1.1 Background of the Study

1.2 Statement of the Problem

1.3 Objective of the Study

1.4 Research Questions

1.5 Research Hypothesis

1.6 Significance of the Study

1.7 Scope of the Study

1.8 Limitation of the Study

1.9 Definition of Terms

1.10 Organisations of the Study

Chapter Two:

Review of Literature

2.1 Conceptual Framework

2.2 Theoretical Framework

2.3 Empirical Review

Chapter Three:

Research Methodology

3.1 Research Design

3.2 Population of the Study

3.3 Sample Size Determination

3.4 Sample Size Selection Technique and Procedure

3.5 Research Instrument and Administration

3.6 Method of Data Collection

3.7 Method of Data Analysis

3.8 Validity of the Study

3.9 Reliability of the Study

3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

4.1 Data Presentation

4.2 Analysis of Data

4.3 Answering Research Questions

4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

5.1 Summary

5.2 Conclusion

5.3 Recommendation

REFERENCES

APPENDIX

QUESTIONNAIRE

• Effect Of Mismanagement And Embezzlement Of Funds In The Public Sector

• Theology and Biblical Studies Project Topics and Materials