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The fast-paced nature of the modern world, coupled with the influx of quality information that define and inform people‘s critical attitude and approach to life has inspired the need for even faith based organization to show transparency and accountability in the management of resources committed to their care by members.
This research was conducted to assess the financial management system of the Methodist Church Ghana, using the Tema Diocese as a case study; the effectiveness and efficiency of the system and measures within the system that ensure financial control and accountability; the challenges of the system and whether the system provides the necessary ambiance for the fulfilment of the vision and mission of the Church.
The Methodology used is a descriptive research with a case study approach. A criterion was adopted in the selection of the sample frame and the sample size. Questionnaires and interviews were used as the main tools of data collection. Both primary and secondary data were collected.
The findings revealed that the Methodist Church Ghana has a new financial management system that replaced an old one which was not helping them accomplish their vision and mission effectively. The new system, which by far has proven to be effective and efficient in driving the vision and mission of the Church, is governed by the Constitution and Standing Orders of the Church and an Accounting Policies and Procedures Manual that promote ideals that are consistent with best practices. Howbeit, a few challenges with the implementation of the new system were discovered during the research and fitting recommendations were made to address them.
In today‘s competitive landscape, efficient management of a church‘s financial resources is very vital for the church to succeed. Financial management systems are the processes and procedures used by an organization‘s management to exercise financial control and accountability. These measures include recording, verification and timely reporting of transactions that affect revenues, expenditures, assets and liabilities. (Diamond & Khemani, 2005). Financial management systems are not only relevant in business organizations or profit making institutions but non-profit making institutions as well. The church is considered to be both a spiritual organism and a human organization that is, it is characterized by both organizational and spiritual attributes and it is at once the body of Christ and a human institution (Auken & Johnson, 1985). Because of this unique dual nature, the local church requires both spiritual and organizational management practices to ensure proper management of it human and financial resources. A church with a poor financial management system, which is a poor system of accounting, auditing and reporting of its financial resources, lacks the moral right and justification to collect and use monies from its congregation. Just as management of financial and other resources are vital in the attainment of organizational goals and objectives in profit making institutions, church leaders are also admonished by God to be good stewards of the resources that are committed to their care in order for the attainment of the church‘s mission and vision. Management is not a current phenomenon. It can be traced back to the Garden of Eden where God assigned Adam to be the
―keeper‖ of all the resources in the garden and the entire earth. Genesis 2:15. Sound financial management system reflects good stewardship. A balanced theology of Christian financial
stewardship requires that members demand accountability from church leaders for their stewardship of financial blessings contributed by the members through giving and other means. (Malphurs & Stroope, 2007)
The Establishment of a sound and an effective financial management system is vital for the churches existence and the management of reputational risks associated with mismanagement and fraud. The presence of a strong financial management system contributes to achieving the goal of the church through the provision of reliable financial data, safeguarding of the church‘s assets and records, evaluating operational efficiency and control through a budget and encouraging adherence to prescribed policies and regulations (Hayles, Wallage, & Gortemaker, 2014).
The church has a mandate to deliver spiritual and social values to its members and society at large and these tasks of the church cannot be undertaken without the church having to encounter severe financial challenges. Confidentiality, ineffective financial management systems or mechanisms, insufficient disclosure, and unsatisfactory oversight describe the financial undertakings, records and reports of numerous churches. There is therefore the need for serious attention to be paid to financial management systems to ensure that a conflict does not exist between beliefs and practices. In the study by Metawos (2018), he concluded that the church under study should adopt and update its financial policies and procedures to reflect modern management practices. Researchers in the area of church financial management have all concluded that sound financial management is essential for the proper administration of the
church. And that non-profit making institution should use best practices used by profit making institutions to manage their finances. There is limited works on financial management systems of the Methodist church Ghana. Safo-Kantanka (2012) conducted a study on the private investment of churches of which the Methodist church was included however the study did not focus on the entire financial management system but rather the private investment of the church. Although the core mandate of the church is focused on the spiritual welfare of its congregation and the winning of souls, it is important to state that these roles of the church cannot be properly executed in recent times when the church is not financially sound. Just as the spiritual aspect is important the financial resources are also necessary in fulfilling the spiritual. The Methodist church has moved from the Assessment system to a new system known as the Percentage system hence the need for this research to find out if the new system and its management is in line with best practices.
The general objective of the study is to assess the financial management system selected churches of the Methodist Church Ghana in the Tema Diocese. The measures put in place by their financial management system to ensure financial control and accountability. The contribution of the system to efficient and effective stewardship behaviour and performance and also to determine the relevance of the system in today‘s world. The specific objectives of the study are:
The efficiencies and effectiveness of the financial management system of the Methodist church Ghana.The financial control and accountability measures in the system.The challenges faced when implementing the financial management system of the church.The attainment of church mission and vision by the financial management system.
This research seeks to find answers to the following question:
How efficient and effective is the existing financial management system of the Methodist church Ghana?How does the system ensure financial control and accountability?What are the challenges faced when implementing the financial management system of the church?How has the financial management system of the church helped in the attainment of the church‘s mission and vision?
Changes in societies due to increased globalization and fast moving technology has not only affected the way we do things but also our behaviors too. Many scandals in relation to financial malfeasance in circular and religious sectors headline news items on front pages of the print media all over the world. Many of these scandals arise due to unethical undertakings, intentional neglect of best practices, bad governance, poor financial management systems and many more.
The 2013 reports from Status Global Missions and Centre for the Study of Global Christianity suggest that Christians worldwide will commit more than $37 billion in church-related financial fraud during 2013. In their 2014 presentations they estimated total Christian population by the year 2025 to hit 2,700,343,000. The total Church income to be generated by this Christian
population in 2025 is $350 billion per year. This implies that Christianity is expected to grow with time. It also presupposes a rise in church related fraud if proper measures are not instituted to ameliorate the factors that fuel its influx.
According to the Brotherhood Mutual Insurance Company report (2015) which insures America‘s Churches and related ministries, they point out that Church crime continues to grow by about $100 million each year. In this regard, the Company has suggested best practices to help prevent fraud in the Church which includes establishing Church‘s financial policy in writing, conducting annual background checks as well as annual credit reports and implementing annual external audits. Increased fraud in the Church in recent time has been very alarming and yet expectation for the church is that the place called ‗holy‘ and its image must not be stained by evil deeds such as financial scandals. For example, in Ghana, the print media often carry stories of pilfering of offerings by either the clergy or the laity. A point in case is a private newspaper that carried on its front page, a story of a former accountant of the Winners Chapel, Ghana, who stole a large sum of the church‘s offerings. The church offerings, according to the report, were
―suspected to have been pilfered directly from the offertory box after normal church service‖ (The Statement, 2008). This and other related issues call for Churches, in both developed and developing countries to re-examine their ways of managing the financial resources of the church and being watchdogs of church funds entrusted into their care by members.
The financial scandals, regardless of where they happen, show that Christians no longer uphold the importance of God‘s command to them to be faithful stewards. According to the study by (Smith, 1991) televangelism in particular and American Protestantism in general were faced with
a lot of financial scandals. According to the author, the scandals led to negative reactions to religion as the reputation of televangelists (that is Christian ministers who devote a large portion of their ministry to television broadcasting) worsened. In 1989 survey of the televangelists‘ values as trustworthiness, honesty, sincerity, special care relationship with God and care about people, revealed that many people had lost faith and trust.
In Africa, financial scandals in the Church are also rampant. Smith (1982) stresses the need for individuals not to engage in the converting funds meant for the Church for personal use with impunity. Smith also alerts the society not to be lax in thinking that spiritual leaders cannot commit criminal acts. In this regard therefore, there is a need to take decisive action to curtail these wrongdoings in order to protect the church‘s purse. This therefore calls for effective financial management system to ensure that the purse is protected.
The techniques or systems in financial management are essential and apply to organizations including the Church. The Churches in Africa are faced with challenges in ensuring that finances are well managed. Schwartz (2005) said that the Churches in part of Africa have overdrafts which are more than a million units of local currency. The question to ask here is; why do Churches go for overdraft? Do they manage properly what they get from tithes, Offerings and projects before opting for an overdraft? (Henrickson, 2012) points out that the creation of Sarbanes – Oxley Act in 2002 help gave strong rules of accountability where Churches are not immune to these new standards or to the expectation of increased scrutiny in the future. Application of financial management techniques and systems as well as regulations set for accountability will help in attaining the main objectives of financial management. The Churches
even though are not- for- profit organizations have ventured into businesses with the aim of recouping the returns from those businesses to finance the Church‘s activities. The Church thus creates wealth by making use of the profits generated from these projects to fund church activities.
In a study by (Henrickson, 2012) he gave the financial management techniques to ensure long- range financial health of the Church to include development of annual budgets; having personnel as budget officers, Treasurer and Finance committee; Implementing financial policies and procedures; Appointing an independent financial oversight team. Campbell (1983) postulate that financial management system entails drawing a budget plan. A budget usually gives the projected revenues and expenditures to be incurred in a particular period thus can be used by the Church. According to Lotich (2015) of Smart Church Management Consultancy Company, the Church leaders are often challenged with ensuring there is continued funding to support current programs and fixed operational costs. In this regard, the author stresses the need to have Church Financial Management tips as strategic plans, budgets, communication, prepare for a financial emergency, oversight and accountability.
In order to ensure finances are managed well, (Henrickson P., 2006) stresses the need to share the duties between several staff members and or volunteers in the Church so that a case where one person handles all financial activities can be avoided. The study by Henrickson further argues that if only one person handles all financial elements, they will be in a better position to conceal the wrongdoings. Most of the financial management techniques mentioned by all the above scholars give an indication that the Church cannot do without them and a proper system if
it wants to be a going concern. Church leaders should set the tone at the top for other members to emulate their sound financial management skills.
The study is significant as it could enhance the knowledge of the general public about the operations of the church. It will be even more useful for policy makers because the findings will provide relevant details that will highlight the positives and negatives of the current financial management systems of the Church. Consequently, evaluating the current system on the basis of the findings and drafting new policies to adopt and adapt to more modern, effective and efficient practices will come in handy. The work will therefore serve as authentic source for conscripting policy framework in determining the financial management systems of churches, how those systems contribute to effective stewardship, financial control and accountability on churches and the nation at large. Since the goal of refining policies is to ensure the enactment of best practices this research will contribute immensely to policy and practices.
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