AN ASSESSMENT OF CHALLENGES ASSOCIATED WITH MISMANAGEMENT OF FUNDS IN NIGERIAN CHURCH (A CASE STUDY OF UNIVERSAL REFORMED CHRISTIAN CHURCH)

CHAPTER ONE 

INTRODUCTION

1.1 Background of the Study

Religious institutions, particularly churches, are currently regarded as the largest and most significant organisations globally (Harris 2019; Booth 2021). The global Christian population is projected to increase from its current count of 2.3 billion (33% of the total population) to 3 billion by 2050 (Pew Research Centre, 2017). Wikipedia estimates that Christianity comprises approximately 4.5% of the Nigerian population. The primary aim of the church has consistently been to foster the moral and spiritual growth of its members. Furthermore, consideration has been redirected towards the advancement of their psychological, socioeconomic, and communal well-being. As a result, several religious institutions are initiating initiatives for community and national development (Mpesha, 2019). In addition to addressing the educational and psychological requirements of their members, they also endeavour to benefit society as a whole. Thus, the church has progressively evolved into a partner in the development of every society. For these activities to be carried out, the church requires financial resources. 

Contributors to the church's financial resources include the general public, donor organisations, and members (Lightbody, 2020; Gruber, 2022). Consequently, it is necessary to provide an account of the utilisation of funds to the funding sources. Despite their numerous attributes, the church has been involved in a significant number of financial scandals. In early 2020, it was reported that the comptroller of Winners Chapel, located in the northern region of Nigeria, had misappropriated millions of tithes and offerings entrusted to his custody. Furthermore, the President of the Voice of the Lord Church in Ghana was dismissed by the National Executive Council due to inadequate financial administration and misappropriation of funds. Among other allegations, he unilaterally obtained loans for church-sponsored initiatives, misappropriated funds, and depleted the education fund (Ghanaweb, 2018). The Centre for the Study of Global Christianity (2015) reports that fraud and corruption caused the loss of an estimated $50 billion from Christian funds, with approximately $1.3 billion of these losses occurring in Africa. In addition, the Religious Financial Fraud Report (2017) estimated that Christians were responsible for criminal activities totaling approximately $59 billion in 2017. 

The aforementioned occurrences have exacerbated the examination of the financial management systems employed by congregations. Certain church leadership has endeavoured to give precedence to their general management strategies (Shaibu, 2018). Consequently, there has been an increased demand for the church to enhance its financial management systems in order to prevent a reversal of the perception that it is no longer a reliable steward institution, as it once was. The church strives to administer funds in a manner that surpasses reproach by upholding rigorous criteria (Shaibu, 2018), in order to serve as a model for society as instructed in Matthew 5:13. As a result, it is advisable to adopt and execute financial management systems and procedures that are sufficient and efficient (Harris, 2019; Booth, 2021; Shaibu, 2018). Additionally, the substantial contributions made by the public towards the churches' financial management system contribute to the increased attention given to it. This causes public and religious leaders to be concerned regarding the administration of such enormous sums. The financial resources contributed to churches by their members and benefactors undergo consistent and substantial expansion over time. Thus, there has been a growing interest among church members in the manner in which these funds are administered. The churches hold general meetings to account for their activities and resource utilisation; however, the majority of questions concerned financial management. Inquiries regarding, among other things, the escalating operational expenses of the church, the characteristics of the insurance policies implemented, and the approaches taken to accounting presentation. 

Establishing a framework that delineates the precise methods of fund management is imperative. The public financial management act (2016) specifies that the framework may comprise policies, strategies, procedures, and processes that direct mobilisation; banking and cash management; investment, disbursement, auditing, records, and information management activities. The aforementioned structure is commonly known as the financial management system. It is important to acknowledge, however, that due to the nonprofit nature of the organisations, the financial management systems and standards of the church must be distinct and customised to meet their specific operations. As a result, throughout the years, numerous churches have developed procedures and systems to accommodate the technical aspects of their operations. 

Funds management comprises the accounting, operation, planning, and control of an organization's entire financial resource set. The organization's objectives are unambiguously delineated and executed in monetary terms; appropriate policies facilitate the achievement of those objectives. Scholars have placed significant emphasis on the funds management, investment management, internal controls, and accountability of the church's finances (Leach, 2019; Gruber, 2022; Shaibu, 2018). These elements address everything from the management of finances prior to receipt to the reporting of usage to stakeholders. By identifying each component, a comprehensive understanding of the organization's financial management system can be obtained, providing a more dependable assessment of the effectiveness of financial resource management.

 Therefore, this study will look at the challenges associated with Mismanagement Of Funds In Nigerian Church using Universal Reformed Christian Church, Nigeria as a case study.

1.2 Statement of the Problem

Numerous international studies have been conducted in an effort to comprehend the church's distinctive management systems (Leach, 2019; Gruber, 2022; Shaibu, 2018). However, the majority of these studies have concentrated on specific facets of financial management, including but not limited to accounting and communication, internal controls, and investment policy, rather than taking into account the entire system. As a result, they have been unable to provide a comprehensive understanding of how the financial system functions as a whole. Merely assessing an individual financial management component does not provide a comprehensive understanding of the efficiency and efficacy of an organization's financial management practices. 

Insufficient research has been conducted to facilitate comprehension of the financial management practices of churches, particularly in Nigeria, in light of the church's exponential growth and the perception of escalating financial mismanagement and malpractices (Agyei & Kusi, 2018; Amoh, 2020; White & Acheampong, 2023). The dearth of such studies throughout the years has been justified by the challenge of obtaining accurate and readily accessible data. The aforementioned scant research also focuses primarily on the orthodox faiths, including the Presbyterian, Catholic, Anglican, and Methodist denominations. Inadequate financial management practices, poor stewardship, absence of internal control systems, and a general lack of interest or investment in financial literacy within the respective congregations were identified in the findings of several studies (Leach, 2019; Gruber, 2022; Shaibu, 2018). 

Based on the above, this study seek to assess challenges associated with Mismanagement Of Funds In Nigerian Church.

1.3 Objectives of the study

Generally, this study seek to examine the challenges associated with Mismanagement Of Funds In Nigerian Church. Specific objectives are stated below.

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. 

Find out the consequences associated with fund mismanagement in Nigerian Churches.

1.4 Research Question

The study will be guided by the following questions;

What is the prevalence of fund mismanagement in Nigerian Churches?

What are the forms of fund mismanagement in Nigerian Churches?

What are the factors considered as the root causes of fund mismanagement in Nigerian Churches?

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 the challenges associated with Mismanagement Of Funds In Nigerian Church (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.