FINANCIAL MANAGEMENT IN CHURCH ADMINISTRATION (A CASE STUDY OF NEW LIFE GOSPEL CHURCH ZONE 6 OSUN STATE)
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The goal of the study was to learn more about the financial management practices used by the New Life Gospel Church in Zone 6 Osun State. The goals are to learn more about the church’s investment and financing decisions, reward programs, and obstacles to meeting its financial responsibilities. The five New Life Gospel Church Zone 6 Osun State churches’ members, including pastors and general overseers and leaders, made up the research’s target group. Forty (40) respondents were chosen using basic random sampling techniques with a purpose. One tool for gathering data was the use of questionnaires. In order to gather pertinent information for the review of related literature and to build the study’s theoretical and empirical framework, a thorough library search was conducted. According to the survey, fund-raising initiatives, tithes, and offerings are the main sources of funding for the New Life Gospel Church in Zone 6 Osun State. The church faced several challenges in meeting its financial obligations, including absenteeism, maintenance of church properties, large rental fees for church services, mismanagement of church funds, and the purchase of fancy cars by certain pastors. Rewarding or motivating church leaders with vehicle and maintenance allowances encourages them to work. The results led to the formulation of conclusions. Based on the aforementioned, it is advised that churches be able to hire a licensed or skilled accountant to manage the accounting side of the organization. Additionally, churches ought to be encouraged to invest in profitable businesses in order to generate revenue for projects like building or expanding their facilities, offering scholarships, etc.
1.1 Background of the Study
Financial records have been found on clays in Mesopotamia, which show lists of expenditures and goods received and traded around temples. Some historical records indicate that recording of financial events was started in the early ancient days for the purpose of faith-based activities in ancient Greece (Mesopotamia). The taxes and trading operations of temples may have contributed to the development of accounting, as well as that of money and numbers. The Bible’s Book of Exodus records Moses asking Ithamar to account for the materials that had been contributed to the tabernacle’s construction, providing evidence of an early system of accounting for the people of Israel during the first millennium BC. Around the year 40 AD, the New Testament records further evidence of job segregation between sacred and secular work in the early church. A committee created by the apostles, consisting of seven members, was tasked with overseeing church members’ contributions and other belongings (Thesis 6:3).
The Church of Scotland used financial management decisions to carry out various investment initiatives during the Middle Ages. It is clear that the goal of accounting for income and assets was to further societal objectives (Catriona et al., 2010). It is not a recent development for faith-based organizations in general, and Christian churches in particular, to use accounting to inform financial management decisions. However, there are two ways to interpret this practice: the first is that churches may not have the professional oversight necessary to sufficiently monitor the organization’s resources because they rely heavily on volunteer support (Thomas & et al, 2017).
The second reason is that churches are ignorant of accounting and financial management, which stems from a conflict between the sacrosanct practices of churches and the finance and accounting profession’s seeming secular attitude. In this particular setting, accounting systems for churches are not a part of the sacred agenda and ought not to impede the Church’s more significant spiritual initiatives (Niklas Kreander et al., 2004). The line dividing the church’s legitimate portion from its profane support activities is known as the sacred and secular divide. Accounting is considered profane since it is viewed as a support activity. It is only accepted to the extent that it upholds the sacred and is viewed as unimportant to the organization’s operations (Niklas Kreander et al., 2004). Members of religious organizations are seeking for greater responsibility and openness from their churches, particularly from the governing body. One major obstacle is the cost of operating churches and other religious institutions.
Financial management receives special attention as a result of organizational operations and the restricted financial resources. There is a growing need for financial accountability as a result of sporadic media reports about financial irregularities in certain religious organizations. Members of the church have a right and a desire to know how and where their money is being used. Assistance is required in all facets of financial management, in addition to responsibility and financial reporting. The financial openness and accountability required to address these issues can be achieved by putting in place responsible Church financial management procedures (Wayne, 1989).
There have been multiple instances of embezzlement in the recent past that involve the use of church cash and other resources. Given that church officials are frequently accused of misusing church finances for personal gain, financial mismanagement is progressively growing in importance as a concern inside the church’s management structure. Thus, while some accounting clerks wisely oversee the money of their churches beyond reproach, others act in the opposite manner. For this reason, it’s critical to review the policies that New Life Gospel Church has established for handling her funds. This will allow one to determine what obstacles, if any, these churches may be encountering that prevent them from managing their funds in a way that is above reproach.
1.2 Statement of the Problem
Globally, numerous research projects have been launched with the goal of comprehending the distinct church management systems (Leach, 1960; Laughlin, 1988; Harris 1990; Booth, 2019; Gruber, 2004; Agyei &Kusi, 2016; Shaibu, 2017). However, rather than taking the entire system into account, the majority of these studies have concentrated on discrete aspects of the scope of financial management, such as accounting and communication, internal controls, investment policy, and so on. As a result, they have not succeeded in providing a thorough understanding of how the financial system functions as a whole. In other words, assessing a single aspect of financial management is insufficient to accurately represent the efficacy and efficiency of an entity’s financial management procedures.
Considering the exponential growth of churches, particularly in Nigeria, and the perception of growing financial mismanagement and malpractices associated with them, the number of studies conducted to facilitate understanding of church financial management is insufficient (Agyei & Kusi, 2016; Ahortor, 2009; Shaibu, 2017; Ahiabor & Mensah, 2017; White & Acheampong, 2017). The difficulty in obtaining reliable and readily available data has been cited as the reason for the paucity of these studies over the years. As previously said, the limited studies that have been conducted primarily concentrate on the orthodox churches, particularly the Presbyterian, Methodist, Anglican, and Catholic churches. Studies (Leach, 1960; Laughlin, 1988; Harris 1990; Booth, 2019; Agyei & Kusi, 2016; Shaibu, 2017) have revealed insufficient financial management practices, poor stewardship, a lack of internal control systems, and a general lack of interest or investment in financial literacy within the respective churches.
1.3 Objectives of the Study
The major aim of the study is to examine the financial management in church administration. Other specific objectives of the study are;
- To examine the financing decisions of the church.
- To examine the investment decisions of the church.
- To examine the reward systems of the church.
- To examine the challenges faced by the church in achieving the financial obligations.
1.4 Research Questions
- What are the sources of funds for the church?
- What are the major investment opportunities for the church?
- What are the reward systems available for the church?
- What are the challenges faced by the church in achieving the financial obligations and how are the problems overcome?
TABLE OF CONTENTS
CHAPTER ONE 1 INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Scope of the Study
1.6 Justification/Rationale of the Study
1.7 Limitations of the Study
1.8 Organization of the Study
REVIEW OF RELATED LITERATURE
2.1 Definition of Financial Management Process
2.2 Basic Challenges of the Process
2.3 Church Budgeting
2.4 Accounting and Internal Control Systems
2.5 Definition of Charismatic Church
2.6 Sources of church funds
2.7 Major Investment Opportunities for the Church
2.8 Reward Systems Available for the Church
2.9 Implications on Rewards for the Church Organization
2.10 Challenges Faced by the Church in Achieving the Financial Obligations and how the Problems are Overcome
CHAPTER THREE METHODOLOGY
3.2 Research Design
3.3 Population of the study
3.4 Sample and Sampling Technique
3.5 Data Collection
3.5.1 Primary Data
3.5.2 Secondary Data
3.7 Pre-Test of the Study Instrument
3.8 Data Analysis Procedure
3.9 Ethical Considerations
3.10 History of Charismatic Churches
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.2 Demographic Characteristics of Respondents
4.3 Sources of Funds for the Church
4.3.1 Keeping Records of Church Funds
4.4 Major Investment Opportunities for the Church
4.5 Reward Systems (motivation) Available for the Church
4.6 Challenges faced by the church in achieving the financial obligations
4.7 Overcoming the challenges faced by the church in achieving the financialobligations
4.8 Assessment of Financial Statements of the Churches using key Ratios
CHAPTER FIVE SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSIONS
5.2 Summary of Findings
5.4 Suggestion(s) for Further Research
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