University of Ghana http://ugspace.ug.edu.gh
 
 
 
FINANCIAL MANAGEMENT OF CHURCHES 
IN GHANA: A CASE STUDY OF 
LEGON INTERDENOMINATIONAL CHURCH 
 
BY 
Akotia Yaa Akotia 
(10402381) 
 
THIS LONG ESSAY IS SUBMITTED TO THE UNIVERSITY OF GHANA 
BUSINESS SCHOOLIN PARTIAL FULFILMENT OF THE REQUIREMENT FOR 
THE AWARD OF MASTER OF BUSINESS ADMINISTRATION (FINANCE) 
DEGREE 
 
 
MAY, 2019 
 
University of Ghana http://ugspace.ug.edu.gh
DECLARATION 
I do hereby assert that this long essay is the result of my own research. This work has not 
been presented for any academic award firstly at the University of Ghana, Legon or at any 
other university around the world. The various references which have been used in this study 
have been fully acknowledged. Any shortcomings in this long essay are my sole 
responsibility. 
 
 
.......................................................... ……................................... 
AKOTIA YAA AKOTIA      DATE 
(10402381) 
  
 
 
 
 
 
 
 
 
University of Ghana http://ugspace.ug.edu.gh
CERTIFICATION 
I hereby certify that this long essay was supervised as per the procedures which have been 
laid down by the University. 
 
..................................................... ………………………………. 
PROF. GODFRED BOKPIN     DATE 
(SUPERVISOR) 
 
 
 
 
 
 
 
 
 
 
 
iii 
 
University of Ghana http://ugspace.ug.edu.gh
DEDICATION 
To God all mighty for His grace and to Dr. and Mrs. Pino Akotia for their immense support 
over the years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
iv 
 
University of Ghana http://ugspace.ug.edu.gh
ACKNOWLEDGEMENT 
I would like to acknowledge and appreciate my supervisor Prof. Godfred Bokpin for his 
guidance in getting this work completed. I would also like to thank Miss Millicent Awuku, 
Miss Gertrude Hagan and Miss Susanna Tetteh for their contribution to this work. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
v 
 
University of Ghana http://ugspace.ug.edu.gh
TABLE OF CONTENTS 
DECLARATION ....................................................................................................................... ii 
CERTIFICATION ................................................................................................................... iii 
DEDICATION .......................................................................................................................... iv 
ACKNOWLEDGEMENT ......................................................................................................... v 
LIST OF TABLES .................................................................................................................... ix 
LIST OF ABBREVIATIONS .................................................................................................... x 
ABSTRACT .............................................................................................................................. xi 
Chapter One ............................................................................................................................... 1 
1.1 Background Of The Study .............................................................................................. 1 
1.2 Problem Statement .......................................................................................................... 4 
1.3 Purpose Of The Study ..................................................................................................... 5 
1.4 Research Questions ......................................................................................................... 6 
1.5 Objectives ....................................................................................................................... 6 
1.6 Proposed Methodology ................................................................................................... 6 
1.6.1 Type Of Study ......................................................................................................... 6 
1.6.2 Research and data collection strategy ...................................................................... 7 
1.6.3 Research Setting ...................................................................................................... 7 
1.7 Significance Of The Study .............................................................................................. 7 
1.7.1 Future Research ....................................................................................................... 8 
1.7.2 Practice .................................................................................................................... 8 
1.7.3 Policies..................................................................................................................... 8 
1.8 Limitations And Delimitations Of The Study ................................................................. 9 
1.8.1 Limitations ............................................................................................................... 9 
1.8.2 Delimitations ........................................................................................................... 9 
1.9 Thesis Structure ............................................................................................................ 10 
1.10 Conclusion .................................................................................................................... 10 
Chapter Two............................................................................................................................. 11 
2.1 Introduction ................................................................................................................... 11 
2.2 Concepts Brief .............................................................................................................. 11 
2.2.1 The Church As An Organization ........................................................................... 11 
2.2.2 Financial Management .......................................................................................... 12 
2.2.3 Investment Decisions ............................................................................................. 13 
2.2.4 Internal Control...................................................................................................... 14 
vi 
 
University of Ghana http://ugspace.ug.edu.gh
2.2.5 Cash Management ................................................................................................. 15 
2.3 Analytical Techniques ....................................................................................................... 15 
2.3.1 Mckinsey’s 7s Model............................................................................................. 15 
2.4 Theoretical Review ....................................................................................................... 17 
2.4.1 Stewardship Theory ............................................................................................... 17 
2.4.2 Resource Dependence Theory ............................................................................... 18 
2.5 Empirical Review.......................................................................................................... 20 
2.5.1 Financial Management In The Church .................................................................. 20 
2.5.2 Cash Management In The Church ......................................................................... 22 
2.5.3 Investment Decision In The Church ...................................................................... 23 
2.5.4 Internal Control And Accountability ..................................................................... 27 
2.6 Conclusion .................................................................................................................... 31 
Chapter Three........................................................................................................................... 32 
3.1 Introduction ................................................................................................................... 32 
3.2 Research Design............................................................................................................ 32 
3.3 Area Of Study ............................................................................................................... 33 
3.4 Data Sources And Collection ........................................................................................ 33 
3.4.1 Data Sources .......................................................................................................... 34 
3.4.1.1 Secondary Data .................................................................................................. 35 
3.4.1.2 Primary Data ...................................................................................................... 35 
3.4.2 Data Collection ...................................................................................................... 35 
3.5 Data Analysis ................................................................................................................ 36 
3.5.1 Reliability And Validity ........................................................................................ 37 
3.5.2 Data Saturation ...................................................................................................... 38 
3.6 Conclusion .................................................................................................................... 38 
Chapter Four ............................................................................................................................ 39 
4.1 Introduction ................................................................................................................... 39 
4.2 Profile ............................................................................................................................ 39 
4.2.1 Physical Profile ...................................................................................................... 39 
4.2.2 Socio-Economic Profile ......................................................................................... 40 
4.3 Field Data Analysis ....................................................................................................... 41 
4.3.1  Internal Assessment .............................................................................................. 41 
4.3.1.1 Strategy .............................................................................................................. 41 
4.3.1.2 Structure And Leadership .................................................................................. 42 
4.3.1.3 Staffing And Skills ............................................................................................... 46 
vii 
 
University of Ghana http://ugspace.ug.edu.gh
4.3.1.4 Systems ................................................................................................................. 47 
4.3.1.5  Leadership Style................................................................................................ 49 
4.3.1.6  Shared Values ................................................................................................. 49 
4.3.2 Sources And Uses Of Income ................................................................................ 49 
4.3.2.1  Sources Of Income ............................................................................................ 50 
4.3.2.2 Uses Of Income .................................................................................................... 51 
4.3.3 Cash Management ....................................................................................................... 51 
4.3.4 Investment Management ............................................................................................. 53 
4.3.5 Internal Control and Accountability ............................................................................ 55 
4.4 Conclusion .................................................................................................................... 58 
Chapter Five ............................................................................................................................. 59 
5.1 Introduction ........................................................................................................................ 59 
5.2 Summary Of The Study ..................................................................................................... 59 
5.2.1 General Findings ......................................................................................................... 60 
5.2.2 Cash Management ....................................................................................................... 60 
5.2.3 Investment Management ............................................................................................. 61 
5.2.4 Internal Control ........................................................................................................... 62 
5.2.5 Challenges ................................................................................................................... 62 
5.3 Conclusion ......................................................................................................................... 63 
5.4 Recommendations .............................................................................................................. 63 
Bibliography ............................................................................................................................ 65 
APPENDIX .............................................................................................................................. 69 
 
 
 
 
 
 
 
viii 
 
University of Ghana http://ugspace.ug.edu.gh
LIST OF TABLES 
Table 1: Income Statement of Legon Interdenominational Church ……………………….3 
Figure 1: McKinsey’s 7s framework………………………………………………………....16 
Table 2: Data source and collection………………………………………………………….24 
Figure 2: LIC Organogram………………………………………………………………...…43 
 
 
 
 
 
 
 
 
 
 
 
 
ix 
 
University of Ghana http://ugspace.ug.edu.gh
LIST OF ABBREVIATIONS 
AGM Annual General Meeting 
CAM Church Administration Ministry 
COE Committee of Elders 
FAPD Financial and Administrative Policy Document 
FM Financial Management 
IFRS International Financial Reporting Standards 
GAAP Generally Accepted Accounting Principles 
GDP Gross Domestic Product 
LIC Legon Interdenominational Church 
MBA Master of Business Administration 
NGO Non-Governmental Institution 
NPO  Non-Profit Organization 
PAYE Pay As You Go 
RDT Resource Dependence Theory 
SME Small and Medium Scale Enterprise 
UG University Of Ghana 
USA United States of America 
x 
 
University of Ghana http://ugspace.ug.edu.gh
ABSTRACT 
This paper reviews the financial management system of the Legon Interdenominational 
Church in light of the financial mismanagement issues of misconduct arising in recent times. 
It focuses on the cash management, investment management and internal control and 
accountability mechanisms of the church as they present a more reflective depiction of the 
entire system. 
 It was a qualitative study that employed the use of interview, observation and document 
reviews as tools to appraise the system of the church. McKinsey’s 7S model was used to 
analyse LIC as an organization and thematic analysis was used in the analysis of the data in 
order to attain a detailed understanding of each component in the system. Data validity, 
reality and saturation are ensured to improve the quality of the findings. 
The strengths of the church are evident in its formalized structure and procedures. The 
crystallized processes, professionally trained staff and volunteers, a corporate governance 
system (COE) who guide and monitor all activities, a good records-keeping culture and a 
good brand name with regards to its integrity in all of its dealings strengthen the framework 
of the church. However, they face a few weaknesses; the lack of a functional manual and the 
nature of appointment unto the COE. There also seems to be an information gap where some 
significant is unknown to key personnel due to time lapse. The church is also presented with 
opportunities in light of this global and technological age that yields resources that would 
support a financial system to be as firm and transparent as possible. . For instance, the use of 
cloud servers and other technological advancements, stable cash flows and little intervention 
from political and other regulatory authorities. The main threats are the political and 
economic variables that could affect operations or standards. 
 
xi 
 
University of Ghana http://ugspace.ug.edu.gh
The study proposes a review of the management policy of the church as it is out-of-date. The 
basis of selection unto the main church board should also be reviewed to accommodate the 
constant presence of a financial management professional. They are also encouraged to 
continue investing in the resources that they currently possess such as technology, skilled 
staff, among others so as to maintain a robust system. 
 
 
 
 
  
 
xii 
 
University of Ghana http://ugspace.ug.edu.gh
Chapter One 
Introduction 
1.1 Background Of The Study 
The church has been identified as the largest and one of the most significant groups 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). In Ghana, 71.2% of the population professes Christianity, as at 
the 2010 national census (Ghana Statistical Service, 2010; Worldatlas, 2017). The main 
object of the church has been the spiritual and moral development of its members. However, 
focus has also been on the development of their mental, social and economic well-being. 
Consequently, a number of churches are embarking on developmental projects in their 
communities and even on a national scale (Mpesha, 2003; Amoah & Gyimah, 2014). They 
also invest in the educational and psychological needs of their members and 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. Despite the many 
favourable attributes, the church has been engaged in many financial scandals. In 2007, Rev 
Michael Jude Fay was sentenced to 37 months in jail after he pleaded guilty to pilfering $1.3 
million from his church in Darien, USA (New York Times, 2006. Also, Prince Dzah, an 
associate pastor of Winners Chapel International, Aflao was arrested for stealing GHS 18,000 
from the church (Ghanaweb, 2013). In addition, the National Executive Council of Voice of 
 
University of Ghana http://ugspace.ug.edu.gh
the Lord Church 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 makes 
stakeholders and the public concerned about the management of such large amounts. The 
funds made available to churches by their members and donors continuously experience 
exponential 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 
2 
 
University of Ghana http://ugspace.ug.edu.gh
nature of insurance adopted the methods of accounting presentation used, among others. The 
table below illustrates the cash flows of the church for the period 2013-2018. 
 
Table 1: Income Statement of Legon Interdenominational Church  
 2018 2017 2016 2014 2013 
(GHS) (GHS) (GHS) (GHS) (GHS) 
INCOME 4,120,442 3,606,840 3,609,759 1,953,639 1,531,181 
(1,183,386) 
(2,485,392) (2,488,908) (2,083,231) (1,539,805) 
EXPENDITURE 
EXCESS OF 
INCOME 
1,635,050 1,117,932 1,526,528 413,834 347,795 
OVER 
EXPENDITURE 
Source: Annual General Meeting Documents 
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.  
3 
 
University of Ghana http://ugspace.ug.edu.gh
Financial management considers how to plan, operate, control and account for all the 
financial resources in an organization. Mainly through policies, the goals of the organization 
are expressed and implemented in financial terms and facilitates goal attainment. The main 
financial components of the church that have been of interest to researchers are cash 
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. 
1.2 Problem Statement 
Many studies have been undertaken all over the world aimed 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 Ghana, 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; 
4 
 
University of Ghana http://ugspace.ug.edu.gh
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). 
1.3 Purpose Of The Study 
The reliance of the church on financial contributions from members, which can be likened to 
reliance of banks on deposits from the public, places an onus on the church to be accountable 
and effective in all its dealings. The perception is that, effective financial management has 
not been practiced over the years especially as many church leaders focus on spiritual matters 
and are of the notion that giving attention to matters that were not ‘spiritual’ would let the 
church stray from its core mandate, which is spiritual guidance and teachings. The lack of or 
inadequate interest and resources in this area have led to many church scandals as well as 
mistrust in the operations of churches.  
This study thus sought to explore the untapped area of financial management of churches in 
Ghana. Using the case of a single church to describe a financial management system of the 
church, the study focused on three main components which are cash management, investment 
management and internal controls and accountability. The study sought to identify and 
evaluate the main financial management components of a non-orthodox church to give a 
comprehensive understanding to its financial management system. 
5 
 
University of Ghana http://ugspace.ug.edu.gh
1.4 Research Questions 
The study would therefore answer these questions. 
 What is the cash management system of the church? 
 What is the investment management policy of the church? 
 How effective are the internal controls and accountability measures in place 
1.5 Objectives 
This study sought to generally review and understand the existing financial management 
systems in the church. The specific objectives are: 
 Appraise the cash management system of the church 
 Appraise the investment management system. 
 Appraise the internal control and accountability measures in place and their 
effectiveness. 
1.6 Proposed Methodology 
The methods and manner in which the study was conducted are described below 
1.6.1 Type of Study 
This study was undertaken using qualitative methods. The qualitative approach seeks to 
identify and understand the financial decision making players and processes as well as fund 
management processes and their adherence to stipulated guidelines.  
6 
 
University of Ghana http://ugspace.ug.edu.gh
1.6.2 Research and data collection strategy 
The research required the use of a review of financial documents such as the financial policy 
and annual reports to assess the stakeholders and their level of knowledge and compliance to 
the laid down procedures. Interviews and direct observation were also employed to ascertain 
how the entire system and its processes are managed.  
1.6.3 Research Setting 
The study was conducted on the Legon Interdenominational Church (LIC), a non-orthodox 
church located in Accra, Ghana. Its non-orthodox nature means it would not have the 
complex and replicated systems of the traditional or orthodox churches. That is to say that, 
emphasis is thrown on how and independent church with no branches or parent congregation 
operates. The study focused on the administrative and financial staff and operations as well as 
the members of the finance ministry of the church and other identified role players.  
The research was dedicated towards understanding the cash management, investment 
management and internal controls and accountability as the joint proxies for financial 
management. Data on the sources of funds, recording of data, supervisory roles, allocation of 
cash, investment policy, types of investments, management structure, benefits derived from 
investments, and independence of management were sought. 
1.7 Significance of the Study 
This research was carried out to fulfill a requirement of the Master of Business 
Administration (MBA) finance qualification. However, it is my hope that it would 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.  
7 
 
University of Ghana http://ugspace.ug.edu.gh
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. 
1.7.1 Future Research 
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. 
1.7.2 Practice 
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. 
1.7.3 Policies 
The outcome of this study would provide guidance in policy making, regarding the 
management of church finances. This would enable leadership to build more confidence and 
trust in the church; motivate members or even the society at large to offer more funds in 
support of the church’s programs as they would be assured that their funds are being used for 
8 
 
University of Ghana http://ugspace.ug.edu.gh
the right purposes which would eventually be of benefit to the entire society. The government 
may even be willing to formulate more favorable policies for the church so they would be 
able to continue their role as development partners. 
1.8 Limitations and Delimitations of the Study 
The study is a decisive and informative one, throwing light on the financial management 
processes. However, it was not without its on roadblocks. 
1.8.1 Limitations 
The nine month time frame was not enough for the researcher to delve into the issue as 
comprehensively as would have been desired. This also informed the decision to focus on one 
church so the time would be invested in identifying and evaluating all possible aspects of the 
subject matter so as to make the study as comprehensive as possible. 
The use of a case study arguably has many limitations, however it allows for a level of 
research that was commensurate with the nature of results expected. 
1.8.2 Delimitations 
The research targeted a non-orthodox church, overlooking other denominations whose 
practices could have impacted the study in other ways or brought up new dimensions not 
observed in the non-orthodox church. Also, the scope of financial management is limited to 
cash management, investment management and internal controls and accountability. This is 
because they are the main functions or areas of finance most churches engage in hence the 
subject of majority of church related research. They are the significant factors that affect the 
financial stance of a church. 
9 
 
University of Ghana http://ugspace.ug.edu.gh
1.9 Thesis Structure 
The thesis is presented in five chapters. Chapter one gives the background of the study, 
identifying the problems in literature it seeks to solve hence its purpose. It enumerates the 
research questions and objectives, whilst ascertaining its significance. Chapter two attempts 
to create a clear picture of the conceptual and empirical framework on which the study is 
based, this sets the tone for a comparative analysis with the findings of the study. Chapter 
three describes the methodology of the study, whilst chapter four is a presentation on the 
analyzed data and findings. Chapter five summarizes the findings of the study, conclude and 
provide recommendations. 
1.10 Conclusion 
The chapter introduces financial management and elaborates on its apparent importance in 
the church especially in recent times. The problem and purposes of the study are also 
discussed, throwing light on the relevance to society. This aids in the development of 
research objectives that were addressed using the designed methodology. The significance, 
implication and applications of the study are also discussed. 
 
 
 
 
 
 
10 
 
University of Ghana http://ugspace.ug.edu.gh
Chapter Two 
Literature Review 
2.1 Introduction 
This chapter reviews literature on the scope of the topic. It includes theoretical underpinnings 
and empirical studies on financial management and its components; namely cash 
management, investment management, internal control and accountability, as defined for this 
study. The theoretical framework evaluates some theories and highlights the significance and 
growing need for financial management in its entirety in the church. The empirical review 
looks at various studies undertaken in the area, focusing on the components of the financial 
management. 
2.2 Concepts Brief 
2.2.1 The Church as an Organization 
The church is composed of a body of Christian believers, sharing the same creed and 
acknowledging the same ecclesiastical authority. Persons join churches for various reasons, 
however, generally, they do so to practice their faith and share it with others to convert them 
into their fold. The church may therefore be said to be composed of a group of persons joined 
together for some common interest and hence classified as an organization. 
The church, like all organizations are created with a vision which is operationalized through a 
mission to attain its purpose.  Since organizations comprise individuals with varied 
aspirations and purposes joining the organization, the persons involved need to share and 
have a common understanding of the vision and how to operationalize it through a common 
shared mission. In order to remain focused to maintain its existence and achieve its purpose, 
11 
 
University of Ghana http://ugspace.ug.edu.gh
it must consciously develop a strategy towards achieving its vision. Also, as an organization 
grows, a structure is required for assigned roles, responsibilities and relationships required to 
operate the shared strategy. Staff is required with requisite skills and competencies to make 
the system of procedures, processes required work. Appropriate leadership with leadership 
style and skills is required to motivate staff and facilitate realization of strategic goals is 
necessary.  Shared values are the values, standards, vision and corporate culture .As an 
organization, the church needs to plan its programmes and activities, organize requisite 
resources for implementation of its activities, monitor and control how the activities are 
undertaken and finances managed towards goal realization. Since the internal and external 
environments must interact for an organization to achieve its purpose, all stakeholders need to 
share a common understanding of the purpose and how it is operationalized to enable them 
play their roles and responsibilities efficiently and effectively, particularly, in resource 
mobilization and use (Shepherd & Yeo, 2005). 
2.2.2 Financial Management 
Financial management, according to Paramasivan and Subramanian (2012) is defined as the 
acquisition and effective use of funds. It is further elaborated as the efficient and effective 
management of financial resources by planning, controlling, leading and directing a firm’s 
resources to maximize value (MSG, 2018). The plans, controls, leadership and directing are 
usually derived from the constitutions, policies or guidelines of the organizations or 
regulators to promote efficiency, eliminate fraud or misdemeanor and overall to promote 
public confidence in the activities of the organization whilst staying true to mandate as 
stewards. 
Financial management planning refers to the determination of how goals and objectives will 
be met (Wikipedia, 2019). Each objective comes with associated activities, tools and 
12 
 
University of Ghana http://ugspace.ug.edu.gh
equipment and human resources with relevant skills to facilitate their implementation, hence 
the need to project the funding that would be required at each stage to ensure goal attainment. 
In effect, it helps identify how much to spend or invest at each point in time as well as 
preparing beforehand so these goals are met in a timely manner. Budgeting and cash 
management are a core part of financial planning. 
Financial control is an essential part of ensuring sound financial management practices are 
implemented as expected. Internal control measures ensure the plan is followed efficiently 
and effectively whilst protecting the organization’s assets. In other words, controls ensure 
that management acts in the best interest of the organization through coordinating and 
supporting activities whilst monitoring the processes. Financial controls promote reliability 
and ensure that all financial activities are adequately represented and free from material 
misstatements. 
Leading and directing is when management uses the plans and controls outlined to implement 
set strategies towards the attainment of the set goals. The process hence involves, but is not 
limited to dissemination of information on the policies, plans and strategies whilst 
coordinating the activities and motivating the team. 
2.2.3 Investment Decisions 
These refer to the amount or proportion of funds allocated for investment purposes. These 
investments can have varying maturities depending on their purposes or intent of 
establishment. Long term investments, also known as capital budgeting is expected to have 
maturities exceeding a year. Short term investments which are for working capital 
management purposes mature within a year, they are hence highly liquid. The investments 
13 
 
University of Ghana http://ugspace.ug.edu.gh
may either be employed in portfolio investments such as shares and bonds or business 
investments like guest centers, shops, among others (Amoah & Gyimah, 2014).   
2.2.4 Internal Control 
These refer to the rules, guidelines and procedures put in place to ensure the integrity of 
financial information and prevent material misstatements. It is necessary to build the trust of 
stakeholders and donors. Internal controls ensure that the operations and activities of the 
churches are in accordance with predetermined policies and their corresponding financial 
representation in the financial statements is true and fair. This means that the level of 
accountability is high and can be trusted as a positive and true representation of the 
acquisition and use of funds. Five main components are usually considered to ensure an 
effective internal control system (Kaplan Financial Knowledge Bank, n.d), these are; 
 Control environment refers to the authorities, framework, procedures and policies that 
facilitate or form the foundation for carrying out internal controls. These include Boards of 
Directors, Board of Trustees, policy statements, and guidelines, among others. 
 Risk assessment refers to the systems put in place to identify the various risks that are likely 
to be faced based on the objectives identified and how the organization seeks to prevent, 
minimize or manage these risks 
 Control activities refer to the actual control procedures listed in the policies and frameworks 
that the organization would undertake to ensure compliance 
 Information and communication refers to how management disseminates these policies to the 
staff and all stakeholders to ensure all understand the policies and their respective 
implications. 
 Monitoring refers to systems put in place to oversee and evaluate the internal control 
procedures. 
14 
 
University of Ghana http://ugspace.ug.edu.gh
2.2.5 Cash Management 
It is the process of collecting, managing and using cash. It is essential in matching inflows 
with outflows and ensuring transparency and cash position visibility (Kenton, 2018). 
2.3 Analytical Techniques 
The study is being carried out to understand the context and approach to which financial 
management is practiced in LIC. Two analytical tools were employed; McKinsey’s 7s Model 
to review the church as an organisation and Thematic analysis to conduct analysis of the 
financial management system. 
2.3.1 Mckinsey’s 7s Model  
In order to understand an organization and whether it is positioned to attain its set objectives, 
it is necessary to assess the quality and robustness of an organizations capacity. The output of 
this assessment outlines the current state of the resources the organization has and serves as a 
basis to determine if the organization can attain its goals. Mckinsey’s framework outlined 7 
elements that could guide in the analytical process. These are strategy, systems, structure, 
style, shared value, staffing and skills. 
Strategy – Defines the purpose of the organization and the how it seeks to enhance its 
competitive advantage 
Structure- How the organization is structured, which hierarchical layers are defined and how 
they relate to one another in operations and communication. Systems- Systems are all formal 
and informal methods of operation, policies, procedures, processes and mode of 
15 
 
University of Ghana http://ugspace.ug.edu.gh
communication flow. There is the need to identify and establish whether the systems are 
documented, known and applied by all staff and stakeholders. 
Style- Style is all about leadership and management styles which may be related to the 
professional level of the staff and how their skill set is applied. It could be authoritarian, 
participatory, laiser-faire or democratic. It is pertinent for leadership to know the context of 
the organization to apply the appropriate style to get the needed results. 
Shared values- The standards, values and forms of ethics practiced in an organization 
influences corporate culture and identity and are key to the performance of staff and 
stakeholders and the realization of its objectives. 
Skills- These are the know-how required for the operations of activities of the organization 
and by the staff. 
Staff- This is about attributes of the employees, their competences and job descriptions. 
Figure 1: McKinsey’s 7s framework. 
 
Source: Van Vliet, 2010 
16 
 
University of Ghana http://ugspace.ug.edu.gh
2.4 Theoretical Review 
The research is based on two main theories; the stewardship theory and the resource 
dependency theory. The theoretical underpinnings of the study are expressed below. 
2.4.1 Stewardship Theory 
The stewardship theory introduced by Davis, Schoorman and Donaldson (1997) purports that 
managers are responsible for assets they are put in charge of. Theorists believe that managers 
would do everything in their power to promote the organization’s agenda, at the expense of 
their parochial interests as long as their activities are within the confines of the constitution or 
policy they are under (Davis, Schoorman & Donaldson, 1997). It is believed that managers in 
themselves are motivated to attain set goals and maximize shareholders profits, unlike the 
propositions of the agency theorists who believe managers and shareholders goals always 
diverge and that managers only desire to serve their personal interests (Davis and Donaldson 
1991). Davis & Donaldson (1991) believe that any distinctions identified in the actions and 
performance of managers should be attributed to the organizational and structural differences. 
Investigations to promote performance hence should be directed towards availability of 
resources that facilitate performance and not the motivation of managers.  
The objectives of the steward and principal would not always be aligned, this is essentially 
impossible. However as the steward places more importance on attaining the collective 
objectives of the organization, those are prioritized. His behavior is thus considered 
“organizationally centered” making him trustworthy (Davis, Schoorman & Donaldson, 1997). 
Furthermore, Davis et al. (1997) explain that the steward is not to be seen as a person who 
has no personal interests. The steward believes not only in the supremacy of the 
organizational goals to his own goal, but also identifies that it is embedded in that of the 
17 
 
University of Ghana http://ugspace.ug.edu.gh
organizations’. Therefore, if the organizational goals are met, his own goals would 
automatically be satisfied as well. The organization under this theory can reduce resources 
allocated to monitoring and administration of extra controls  aimed at ensuring performance 
as the steward is in effect attaining his own goal as he attains that of the organization. 
The main limitation to this theory hence the reason why principals maintain agency theory 
and its prescriptions is that the principal would have to risk their wealth on the assumption 
that the steward would work in their interest, a risk averse investor may not be willing to 
make such an assumption and would therefore prefer to walk on the side of caution and apply 
the precautions of the agency theorists. However, the benefits of a steward far outweigh this 
limitation. 
Similar to Tanui, Omare and Bitange (2016), the stewardship theory has been adopted for this 
study as the clergy and church management have been entrusted by the congregation to 
manage their resources effectively, believing that the church’s interests would be prioritized 
in all situations. The church has become aware of the fact that focusing on ‘just the spiritual’ 
aspects only without paying attention to the management of its resources would not aid in 
attaining the objectives of the church and this will promote mismanagement of resources 
(Laughlin, 1988). There is thus a need to appoint leaders (stewards) who would manage the 
resources and activities in the stead of the congregation so as to promote the mission and 
vision of the church. 
2.4.2 Resource Dependence Theory 
The resource dependency theory (RDT) as proffered by Pfeffer and Salancik (1978) purports 
that no organization is an island, and that, every organization has its publics with which it 
18 
 
University of Ghana http://ugspace.ug.edu.gh
interacts for its relevance and existence. Each organization requires resources from their 
environment to survive hence organizations must respond to their environment.  
This emphasizes the position of the church as a nonprofit body that fully depends on 
contributions (offerings and tithes) from members, donations, grants among others for its 
operations. As resources are becoming more and more limited, organizations; whether profit 
or nonprofit, compete fiercely for these limited resources. The allegation of corruption and 
mismanagement in the church is not a good element in this solicitation process. Any rational 
person would prefer providing resources to an organization that they are positive would use 
the funds for its intended purpose (Agyei-Mensah, 2016). The effective and efficient use of 
funds can only be proved by adopting sound and holistic financial management practices and 
consequently communicating (accounting) to the donors (members and nonmembers) 
periodically. This has become a necessity and not a luxury as behaviorists have noticed that 
people change based on what they want. If the church wants to continuously get resources 
(souls and money), then they have to be willing to put in the financial management measures 
required to attain them. The main criticism of this theory is its inability to measure or ensure 
healthy financial performance (Hillman, Withers & Collins, 2009). That is, the fact that there 
are good management practices does not ensure a positive outcome in terms of performance 
which is a better indicator of effective management. This is because a firm may focus on 
good management practices frameworks and not implement them or implement them poorly. 
However, if they focus on financial performance the good practices would be an implied 
feature and one can also evaluate the results. 
19 
 
University of Ghana http://ugspace.ug.edu.gh
2.5 Empirical Review 
2.5.1 Financial Management in the Church 
A church may be likened to any profit making business despite its non-profit nature (Pallock, 
1991). Its governance, structure and operations must hence be managed based on good 
business management methods for it to survive. It may thus be dubbed as ‘the Lord’s 
business’ therefore “all things must be done decently and in order” (NIV, 2011). Most 
churches around the globe have their own prescribed constitutions; set of rules, procedures 
among others that they have custom made to suit their operations (United Church of Christ, 
2010).The entirety of a church’s management structure must be well organized so as to attain 
a good financial management posture. Management structure is the blueprint of the overall 
plan of an organization. The above proves the essential state of having good management 
structure in order to promote sound financial management. 
In order to achieve the primary goals of the church, which are to spread the gospel, welfare 
facilitation and promotion of prayer, it is of great importance to acquire funds. These funds 
are attained from various sources; offerings, tithes, donations, grants, among others (from 
members and non-members). The church has over the years been adopting financial 
management processes (Leach, 1960) so as to improve revenue generation whilst managing 
costs. This is so because, they have realized that without proper financial management, the 
institution of the church and its intended relevance may not be sustainable as found in 
Australia (Irvine, 2005). The notion of separating the ‘sacred’ –referring to the religious 
things from the ‘profane’ – worldly things (of which financial management is considered as 
part of) as proposed by Durkheim (1976) was by no means generally accepted and over the 
years has been proven to be flawed (Stark, 1999). 
20 
 
University of Ghana http://ugspace.ug.edu.gh
The diversities in the nature, funding and purpose of the church’s money also call for skilled 
and knowledgeable management. Agyei and Kusi (2006) underwent a research in the Ashanti 
Region of Ghana, evaluating the financial reporting practices and identified the that only 
26.7% of churches kept proper books and adhered to accounting procedures; also, 67.6% did 
not disclose the financial state to their members, whilst 67% of the finances were controlled 
by pastors (irrespective of their financial management knowledge). These findings were 
stated as a remedy for mismanagement and fraud and was suggested that an independent 
commission be set up to regulate the operations of churches in Ghana. The existence of such 
issues has been going on for a long time. Laughlin (1988) proposed that before anyone is 
entrusted with the management of funds, they should understand the specific and unique 
procedures and qualifications needed to adequately manage church funds. 
In an attempt to improve financial management, the church encouraged dedicated members 
who were willing to take charge of the financial management processes (Irvine, 2005). 
Boothe (1993) like Laughlin (1988) also agreed that the clergy and occupational members be 
put in charge of the finances as a means of separating the ‘sacred’, from antithetic practices. 
They believed that the hiring of professional managers, especially those who are not church 
members (as is common today) may be detrimental to the progress of the main goals of the 
church. Kluvers’ study (2001) also stated that denominational differences could attribute to 
the decision to hire external professional or occupational members. It was found that 
churches with congregational governance; that is, governance by church members (which is 
evident in today’s charismatic church) are more likely to hire people who would stay within 
the boundaries of their local religious laws. This would hence reduce disparities in principles 
as the members have a hand in the governance. In summary, it has been proven that good 
quality management practices, coupled with competent personnel would improve work 
quality and hence financial performance (Huselid, 1995). 
21 
 
University of Ghana http://ugspace.ug.edu.gh
Once the financial managers are set, the next issue to be dealt with is the acquisition of such 
funds as there would be no point in having financial managers without having funds to 
manage. As stated earlier, church funds have many sources. Funds from the various sources 
are provided for various reasons; commitment to goal attainment (Laurie & Larry, 2008), 
warding off drawbacks and ill-manners of wealth accumulation (Martin, 2009), sense of 
empowerment (Devaka, 2012), among others. 
Mitchell (2015) observed that over the years non-profit organizations (NGOs) were 
continuously adopting financial management practices. Those could be attributed mainly to 
the increasing expectation of society as a whole and donors in general for the NGOs to 
conform to the finance and disclosure standards provided. There was also the belief that 
financial management practices would stifle the growth of the church as they were seen to be 
static as against the dynamic external environment. It was found that NGOs that were not 
fiscally lean were able to adjust their operations to the changing environment hence stand the 
test of time. They were thus encouraged to build upon their financial management practices 
and build their fiscal capacity. Those who were found to be fiscally lean were as such 
because of the view that it is more virtuous. Adverse economic conditions however is not a 
respecter of virtue, hence they were also advised to build capacity. 
2.5.2 Cash Management in the Church 
Shaibu (2013) analyzes the management of offerings in Cape Coast, Ghana, in the era of 
increasing incidence of corruption and pilfering in order to salvage the reputation of and build 
confidence in the church as an institution. He sought to determine if there were systems and 
infrastructure put in place to facilitate proper financial and human resource management and 
the publishing of accounts. Though the Ashanti Regional churches had these systems in place 
there was little compliance, as was found in Agyei-Mensah’s (2016) study as well. This was 
22 
 
University of Ghana http://ugspace.ug.edu.gh
largely attributed to lack of transparency and supervision. Some recommendations were 
constant reviews, training, rewards for compliance etc. 
The study of Woodbine (1997) on local Australian churches was to evaluate the claim of the 
churches that they had safeguarded the cash management processes so as to reduce the fraud 
levels to which control systems are employed. Like most papers in the 1990’s it was 
motivated by the high incidence of fraud and mismanagement in the church. It was further 
motivated by the claims that accounting practices employment by churches was merely a 
claim (Booth 1993). 
Cash is one of the most difficult resources to manage in the church due to the irregular 
inflows and lack of documentation (in most instances).  Some control measures enumerated 
by Woodbine (1997) in his Australian study are counting committees, segregation of duties, 
use of individual envelopes, cheques, immediate banking of cash on receipt. It was also 
identified that the following could affect the level and effectiveness of controls employed; the 
size of the church, rate of growth, leadership turnover, treasurer turnover, size of offertory 
among others. Some administrative factors that were evident include cash policies, skill-set of 
staff, audited accounts. This is contrary to the findings of Amoah and Gyimah (2014). 
2.5.3 Investment Decision In The Church 
 A common rationale behind investments is the excess of inflows over expenses, this is 
however a notion that is flawed. Organizations with higher levels of financial knowledge 
incorporate the intentional allocation of funds to be employed in investment opportunities. 
This is to allow the church meet its spiritual and socio-economic goals (Mpesha, 2003); 
especially as the dependence on the traditional sources of inflows (offertory, tithe and 
donations) may not always be able to meet all of the church’s needs as they arise. Christians 
23 
 
University of Ghana http://ugspace.ug.edu.gh
are to be innovative in strategies towards fund acquisition (Ghanaian Times, 2010). These 
investments and their prospective returns are not only essential for the benefits the church 
would derive from them but the contribution it would make to the society as a whole 
expressed through additions to the Gross Domestic Product (GDP) through taxes. 
Christian investments in the USA first ensure that the investments are in line with their belief 
and that they can use their positions and power in these investments to influence the 
corporate social behavior (Denver post, 2013). This is seen in Walmart as some employees 
have stated that they joined the corporation due to their pro family beliefs and strong beliefs 
in gender equality which is imbibed in the corporation due to their Christian founder Walton 
(The Harvard Gazette, 2009) 
The main areas of interests are the scope of investments, the management structure of the 
investments and the use of the investments, returns inclusive. 
Amoah and Gyimah (2014) undertook a case study of churches in the Kumasi Metropolitan 
area of the Ashanti Region in Ghana looking at the broad categorizations of Christian council 
(Anglican, Methodist, Presbyterian, Assemblies of God and Baptist) and Catholic churches 
respectively. The study sought to determine the demand for and utilization of investments and 
how these investments are managed and operationalized, considering possible challenges. 
They discovered that the churches engaged more in business than portfolio investments. 
Some of such businesses are transportation, book stores, guest houses, printing presses and 
hostels. The businesses identified were operated on a small scale. A few churches had 
designated Boards whose sole duty was to manage such business investments. This promoted 
bureaucracy and delays in decision making as the businesses without such boards would have 
to wait for the church’s board meetings to table certain concerns. Following this, a positive 
relationship was established between professional qualifications and effectiveness in financial 
24 
 
University of Ghana http://ugspace.ug.edu.gh
management practices such as accounting and record keeping, as they were not strictly 
practiced otherwise. The lack of these practices promotes theft, mismanagement and 
misappropriation of funds.  
Some financial gains derived from such investments are the ability to pool those profits and 
reinvest them into other church projects such as building schools and supporting the 
operational expenses of the church. Non-financial benefits are the provision and employment, 
meeting societal needs and providing services to the church at subsidized rates or even at no 
cost. As expressed by Ritchie (2011), the church is perceived as a selfless organization that 
does not seek financial gain. They are therefore reluctant in making decisions that will cause 
them to be perceived as profit seeking organizations. Some challenges identified was the lack 
of proper documentation, the expression of excessive trust in employees as most are church 
members (which leads to theft and mismanagement), bureaucracies and the unwillingness of 
church boards to approve strategic decisions that would help yield profit and make the 
business competitive. Amoah and Gyimah (2014) recommended the consideration of 
portfolio investments, acquisition of financial management advice and also the need to strike 
a balance between the church and its business which require profits to stay afloat. 
Mpesha (2003) acknowledged the extent of contributions made in Tanzania by the church in 
his study on microcredit finance. He recognized the role of the church as a developmental 
partner in the nation as they followed in the steps of Muhammed Yunus, the father of 
microfinance. Mpesha’s study focused on understanding the management policies of such 
investments and what it achieved. The scope of the investments in microcredit was not just to 
provide funds, but to do so to the very poor so they could engage in productive activities and 
further engage in other economic activities such as employment, payment of taxes, etc. This 
is in line with the objectives of the Grameen Bank in 1974 which is to extend financial 
25 
 
University of Ghana http://ugspace.ug.edu.gh
facilities to the poor and eradicate the exploitation of same. The study addresses the problems 
Amoah and Gyimah (2014) faced with respect to striking a balance between spiritual and the 
physical. This is because Mpesha believed that to address the problems of the spirit; the 
physical needs of the people should also be catered for. In essence all the goals of the church, 
including the spiritual, are being met. Mpesha also found that the churches studied believed 
that by acquiring a stake in businesses, it is easier to promote the gospel and its teachings as a 
ready platform is available. Spiritual and ethical attributes that the church wants to promote 
can thus be advocated as a result of the platform created by the microcredit financing. As 
churches are generally more trusted, their supports and input is readily accepted and 
employed. This can be attributed to the image the church has of relentlessly seeking for the 
best for others (Ritchie, 2011). 
The project allows the church to engage in financial literacy projects with the beneficiaries 
and also provides employment opportunities. The main challenge identified or that other 
researchers (Laughlin, 1988) disagree with is the desegregation of the church (sacred) and 
other ‘unsacred’ functions. 
The church continuously contributes to various aspects of society, such as supporting the 
government as development partners (Mpesha, 2003 and Ritchie, 2011), hence should be 
exempt from taxes, as an incentive to carry on. However, unlike the assertion that the church 
always works selflessly to promote welfare, it must be acknowledged that they are 
organizations and like any other, must take steps to survive in the economy. Churches are 
thus creating enterprises and they aim to attain maximum returns from such enterprises. 
The Times Magazine, in 1997, reported the current assets of the Latter Day Saints (LDS) to 
be 30 billion US dollars at the time. That position placed its value at least at the midpoint of 
fortune 500 companies. In 2005, the Catholic Church was reported to own millions of dollars’ 
26 
 
University of Ghana http://ugspace.ug.edu.gh
worth of real estate and investment portfolio income of about 55 million US dollars in 2006. 
Like any other business, the church is subject to risks. The Catholic Church, in 2008, incurred 
its first loss in four years, due to a decline in the US dollar against the euro. This speaks to the 
need for the church to engage professionals in its operations so as the manage operations 
effectively and mitigate risks. In 2009, the Evangelical Lutheran Church was reported to have 
1.6 million US dollars in investment revenue and another one million US dollars in rent 
revenue per annum. The Church of England managed investable assets worth about 7.9 
billion pounds and made 17% return on these investments in 2016 (The Guardian, 2017). 
Though the church is not business centered, it needs to manage its operations on tried and 
tested business management principles in order to survive. Investment is a serious decision 
and a well informed and skilled team is needed to drive the church’s investment in the right 
direction, as the economic conditions are no respecter of faith and social contribution (Fried 
& Hisrich, 1994). 
2.5.4 Internal Control And Accountability 
Ahiabor and Mensah (2013) conducted a survey in Greater Accra Region in Ghana, to 
determine the effectiveness and independence of internal control by evaluating the 
procedures available.  This study was motivated by incidence of embezzlement and 
mismanagement of church funds which undermine the claims that they have internal control 
mechanisms in place. The general observation was that the churches fell short of established 
financial management practices and internal control as against the profit oriented firms. This 
general observation was in line with Laughlin’s study in 1988, where it was stated that 
accounting practices should not be focused on as a main aspect of church operations but 
should be seen as a complementary tool. The main reasons identified for the inadequacy of 
financial systems was the trust expressed in the staff as most were members of the church. 
27 
 
University of Ghana http://ugspace.ug.edu.gh
Also, most givers were only interested in the blessings in giving hence they were not too 
concerned about the management or use of the funds they provided. This contradicts the view 
that givers are only willing to invest in those organizations that they are confident will use 
funds for their intended use and would manage the said funds in accordance with existing 
conventions (Mitchell, 2015). The study sought to determine the existence of internal control 
policies and procedures, the independence to use such policies and the impact of the policies. 
These ideas however are perceived as irrelevant for the church as it divert the leadership 
attention  from the management of the ‘sacred’ mandate of the church (Laughlin 1988).  
Shaibu (2013) suggested the frequent reconciliation of the offertory with the bank and the use 
of purchase orders to aid in the tracking of cash transactions and promote transparency in his 
study of selected Pentecostal churches in the Ashanti Region. Irvine (2005) emphasized and 
promoted the importance of internal controls and accountability to aid in continuous 
management reviews and detection of crises or the sources of such crises to promote the 
presentation of a true and fair financial report. Shaibu (2013) identified levels of controls in 
the churches and established a relationship between internal controls and finance. It was 
difficult to rate the various churches as strong or weak in the adaptation and implementation 
of the internal controls as strengths and weaknesses were shown in various aspects of control. 
Further recommendations were continuous monitoring, segregation of duties, authorization 
and recording of all transactions. 
Tanui, Omare and Bitange (2016) undertook a study to promote the effectiveness of financial 
management through internal control systems in Protestant churches in Kenya in 2016. Like 
previous studies, this study was motivated by the unending church scandals and 
misconception that church leaders could not commit crimes. As corruption has crept into the 
church and is gradually increasing, the adoption of internal controls acts as the first line of 
28 
 
University of Ghana http://ugspace.ug.edu.gh
defense for the church. It was revealed that only control activities out of the five components 
were evident in the churches. This is in line with Laughlin (1998), where internal controls are 
disregarded by the church, tagging it insignificant. A positive relationship was identified 
between financial management and internal control systems, where like Mitchell (2015), 
there is belief in adequate management, and however, it seems to be that internal control is 
not one of the main techniques adopted for this purpose. 
Reminiscent of Mpesha (2003), Agyei-Mensah (2016) also acknowledges the vital role the 
church plays as a developmental agent. This is evident in the building of schools, most of 
which are known as ‘mission’ schools, hospitals, provision of portable water and scholarship, 
to students among others.  The importance of the church implies that all of its activities, 
especially the financial aspects should be considered seriously. Everything that is done must 
be done as unto the Lord and not to men (NIV, 2011). This is divergent view from Laughlin 
(1988), where accounting practices are not considered as important hence only rudimentary 
aspects are employed. The study looked at financial accountability and internal control 
practices in 86 Methodist societies in Kumasi, Ghana. This represents 75% of the societies. 
The importance of the church’s survival cannot be overemphasized (Mpesha, 2003; Ritchie, 
2011). In order for the church to continue playing its pivotal role in society, money is needed. 
Not employing sound financial management practices could run the church down such that 
even the ‘sacred’ function would not be able to run. One of the motivations for this study is 
the claim that the church has no money, despite all the resources available to it. The lack of 
adequate studies in this area unlike that of countries such as Canada, Australia and UK makes 
it difficult to assess the current situation of the church in Ghana and make and implement 
policies to remedy them. This study seeks to bridge that gap. Similar to Joseph in Potiphar’s 
house (NIV, 2011), Christians are expected to act as stewards of God’s resources and be held 
29 
 
University of Ghana http://ugspace.ug.edu.gh
accountable to the letter. The study identified the importance of adopting the culture of record 
keeping which would serve as a good basis for accountability (Agyei-Mensah, 2016). Though 
the churches studied had controls in place, the controls were not applied effectively. The 
confidence in the control systems of the church seem to be lower than that of Ahiabor and 
Mensah (2013) due to their overconfidence in the workers hence not implementing the 
controls to the letter.. 
 Mitchell (2015) emphasized that as funds are collected from the public, it is only prudent to 
render proper accounts to them. The recommendation provided to improve the identified state 
of the Methodist church was to train staff in the respective areas, segregation of duties, 
reviews and the inclusion of basic financial management practices in the training of ministers. 
Irvine (2005), adopted the framework by Boothe (1993) to identify whether accounting was 
so ‘secular’ that it would inhibit the work of the church in any way. That is, was there a 
significant clash in the ‘sacred’ and ‘secular’ nature of the church and accounting 
respectively? The study was not looking to simply impose the ways of accounting on the 
church but rather prove its significance and how it can help the church in the achievement of 
its goals. The study analyzed how accounting practices were employed over a six month 
period and resistance it faced in the Anglican Diocese of Sydney, Australia. The study was of 
a single church. Financial reports for eight years were reviewed, alongside observations and 
interviews of the church leaders. The church leaders generally had no real knowledge about 
accounting processes, but the individual churches in the diocese had to prepare annual budget 
and raise their own funds to meet the stated expenses. The budgetary document is thus a very 
significant document to them. The financial management tools that are needed to effectively 
draw manage and maintain a budget was known to them. They identified the budget as a 
means of attaining spiritual goals. It was concluded that, accounting was significant to the 
30 
 
University of Ghana http://ugspace.ug.edu.gh
church and was not a mere intrusion as stated by Laughlin (1988). The diocese would thus 
have to consider employing professional staff to oversee the operations to ensure maximum 
output. A significant relationship that was established was that of the quality of internal 
control and the audit committee, and this was found to be positive (Krishnan, 2005) the 
quality of the audit committee was measured by the size, independence and expertise of 
members. Organizations that had high independence and expertise of members were 
identified as experiencing less internal control problems. Internal control also increases the 
quality of financial reporting and accountability.  
2.6 Conclusion 
The theories and reviewed literature have given insight into the financial management of 
churches under different contexts and culture. The adoption of the stewardship theory and the 
RDT emphasizes on the need for a financial management system in every organization. The 
literature reviewed also throws light on the attempts of churches around the globe to adopt 
some form of financial system into their operations. It has thus set the tone for a detailed 
study into the subject matter, focusing on the cash management, investment management and 
internal control and accountability. 
 
 
 
 
 
31 
 
University of Ghana http://ugspace.ug.edu.gh
Chapter Three 
Methodology 
3.1 Introduction 
This chapter is an overview of the methods and procedures adopted for this research. The 
area of study, data sources and collection modes are discussed expressing how the data was 
analyzed based on reliability and validity in order to achieve quality results. The rationale for 
the selected methods is expressed as well. 
3.2 Research Design 
The research adopted a descriptive strategy to illuminate the existing nature of operations in 
the church through a case study; which is a specific study of real life situations to attain in-
depth knowledge about the subject (Kardos & Smith, 1979). The multi-faceted nature of a 
case study therefore helps understand the policies, activities, processes and procedures 
guiding financial management components, of the church. It is suited to encompass the 
complexities and various relationships of the given situation. It aids in the performance of an 
intense descriptive analysis of churches, using the Legon Interdenominational Church (LIC) 
as the unit of analysis. The approaches adopted and results attained may be used as a basis of 
generalization for other churches based on the logical reasoning in describing it (Walsham, 
1993). However, that is not the main import of the study, the study aims to describe the 
systems adopted in LIC and determine if they are efficient and effective. A case study also 
supports the employment of various methods to aid in the answering of the research 
questions. 
32 
 
University of Ghana http://ugspace.ug.edu.gh
3.3 Area Of Study 
This study evaluated the financial management system of the church. For the purposes of the 
study, the entire financial management system was segregated into three main components 
for analysis. 
 Cash management 
 Investment management 
 Internal control and accountability 
The cash management inquiries into the sources of funds, how these funds are recorded on 
receipt, the supervisory oversight, how it is allocated or disbursed and how and when it is 
banked. 
The investment management looks into the investment policy, types of investments adopted, 
the management structure, benefits derived from the investments and their respective uses. 
Internal control and accountability aims to evaluate the respective policies and procedures, 
independence and effect of internal control. Coupled with financial reporting standards, the 
internal control would be used as a determinant of accountability levels. 
3.4 Data Sources And Collection 
The study adopted qualitative research approach. The qualitative elements involved the use of 
observation, interviews and a review of the financial records and documents to obtain the 
relevant information required.  
 
 
33 
 
University of Ghana http://ugspace.ug.edu.gh
Table 2: Data source and collection 
Research Data required Data source Method(s) of 
objective collection 
 Accountant  Observation 
Cash  Source of funds 
 Finance  Interview 
management  Recording of ministry  
data 
 Supervisors role 
 Allocation of 
cash 
 Accountant  Interview  
Investment  investment 
 Finance  Review of 
management policy ministry documents 
 types of 
 Board 
investments 
 management 
structure 
 benefits derived 
 respective uses 
 Accountant  Observation 
Internal control  policy and 
 Finance  Interview 
procedures ministry  Review of 
 Independence documents 
 Effect  
 Accountant  Interview 
Accountability   Reports 
 Finance  Review of 
ministry documents 
 Auditor  
Source: Author’s construct 
3.4.1 Data Sources 
The data sources are both primary and secondary. The primary data sources are interviews 
and observations. The review of financial documents such as budgets, annual reports and 
policies will be the source of the secondary data. 
34 
 
University of Ghana http://ugspace.ug.edu.gh
3.4.1.1 Secondary Data 
This refers to the review and analysis of existing information to develop the scope of 
understanding of the research. The reviewed information illuminates the subjects of financial 
management, the church and church financial management. The annual financial statements, 
policies, meeting minutes and existing articles were reviewed for the purposes of this study. 
3.4.1.2 Primary Data 
This involves data that does not already exist and this data is directly related to the subject 
matter. This data was acquired through interviews and observations of the church leaders, 
management, staff and volunteers. 
The interview allows the respondents to provide all the information they are privy to about 
the subject matter. The interview took the form of a conversation to promote trust and 
confidence in the significance of the study hence the provision of quality information. 
Observation is used to confirm and relate to the information provided from the interviews. 
3.4.2 Data Collection 
The data collection technique employed to evoke credibility and confidence in the findings of 
the study was triangulation. It refers to the use of multiple means to collect data and there are 
four types, namely; data, investigator, theory and methodological triangulation. Data 
triangulation refers to the acquisition of data via different sources whilst applying different 
theories in the research would be the use of theory triangulation. Employing different 
investigators to acquire the data is investigator triangulation and the use of different data 
collection methods is methodological triangulation. Methodological triangulation was 
employed to ensure that all available data was retrieved to the point of data saturation. 
35 
 
University of Ghana http://ugspace.ug.edu.gh
The data was collected after the letter of permission to engage in the research had been 
obtained. On receipt of approval from the church administration to carry on, there were 
individual introductions with the interviewees to explain the purpose of the interview. The 
interviews were then carried out with the aid of an interview guide which was prepared prior 
to the interview. The guide was prepared based on the research objectives, literature review 
and financial manual of the church. Open-ended questions were used to attain as much 
information as possible without creating boundaries. Some of the interviews were recorded to 
ensure accuracy in the analysis with the permission of the interviewees. Those who rejected 
the gesture did not have their interview being recorded. 
Observation was done for a period on nine months and the observations were used as an aid 
in the interviews and the review of documents. That is, clarification was sought on observed 
actions that contradicted policy guidelines during the interview. The observations also helped 
to appreciate some of the responses from the interview better as it had been witnessed prior to 
it. 
Documents were reviewed prior to the interview to get a clear view of the church and their 
vision. This also aided in the interview as questions from the manual were incorporated into 
the guide. This gave a more holistic picture for the purposes of the research. 
Triangulation proved to be very helpful as it increased the reliability and validity of data 
attained 
3.5 Data Analysis 
This refers to exploring and evaluating information received through summaries and visual 
aids to help make deductions and establish relationships. Data may be analyzed using 
quantitative, qualitative or mixed methods. Qualitative research refers to the interpretation of 
36 
 
University of Ghana http://ugspace.ug.edu.gh
a phenomenon for better understanding (Boateng, 2016). Results are more explanatory in 
nature allowing flexibility in its activities. Quantitative research tends to test for the existence 
or extent of a problem. Statistics and inferences from the data are used in the analysis 
creating a sense of independence between the results and the researcher (Boateng, 2016). The 
mixed approach combines these two methods in the analysis. This research used a purely 
qualitative method in its analysis. 
Thematic analysis of the data was used to analyze the information received on the basis of the 
objectives of the study. It involves the creation of themes or patterns to aid better 
understanding of the topic in more segmented levels (Braun & Clarke, 2006). Themes were 
created from the objectives to aid in the analytical discussions. The themes are financial 
management, cash management, investment management and internal control and 
accountability. The creation of themes makes analysis easier and more comprehensive due to 
the broad scope of the subject matter: financial management, it also allows the questions of 
the research to be addressed directly. The conclusion reached on each of the themes would 
inform the final conclusion of the financial management system of LIC. Therefore, various 
issues under a particular theme were analyzed as one subject and summarized as such. The 
McKinsey 7s model is also adopted to help assess the internal framework of LIC in order to 
determine whether it has positioned itself to take advantage of the financial management 
systems. 
3.5.1 Reliability And Validity 
The significance of enhancing the credibility of qualitative research cannot be over 
emphasized due to the many criticisms against it. These criticisms mainly stem from the 
claim that the method lacks scientific precision and objectivity. Definite proof that the 
research is based on reliable and valid data helps to minimize the uncertainties. 
37 
 
University of Ghana http://ugspace.ug.edu.gh
Reliability refers to the consistency and dependability of the data whilst validity looks at the 
data’s ability to address the research questions posed. The quality of the research is enhanced 
with the establishment of these two features.  
This study achieved reliability and validity through the strict use of the interview guide and 
the review of documents which helped eliminate personal biases. The methodological 
triangulation and interview of various respondents further improved credibility by ensuring 
accuracy of obtained data. The interview guide was adhered to in the data collection process 
and this was juxtaposed with the information from the church’s manual and convention. 
3.5.2 Data Saturation 
This is accomplished when sufficient information is acquired such that there cannot be any 
new information to obtain. Further efforts to acquire them would lead to redundant 
information. The data to be obtained reached saturation as in-depth interviews with different 
respondents were organized, coupled with the other collection instruments. It was realized 
that responses to certain questions had been attained in earlier interviews or through the 
observatory process. This confirmed saturation. 
3.6 Conclusion 
The main objective of this study is to assess the financial management system of a non-
orthodox church. This chapter has expressed the analytical tools, instruments and methods 
employed in the acquisition of the required data that enabled an analysis to answer the 
research questions. The chapter also outlines how the data was collected ensuring there was 
no bias and unethical treatments. The nature and mode of implementation of these analytical 
processes are also explained in the chapter. The chapter thus gives a general overview of how 
the research was undertaken 
38 
 
University of Ghana http://ugspace.ug.edu.gh
Chapter Four 
Data Analyses And Presentation Of Findings 
4.1 Introduction 
This chapter seeks to evaluate the data collected with the aid of thematic analysis so as to 
address the research questions posed. The research instruments employed and analysis 
technique adopted enable the outline of the exposition of the desired issues associated with 
financial management generally and particularly within the context of the Church. 
4.2 Profile 
This section provides insight into the phenomenon under study. It is a presentation on the 
evaluation of the findings covering the church’s background, purpose, mission, growth and 
responsibilities. The profile is segmented into the physical profile and the socio-economic 
profile. 
4.2.1 Physical Profile 
LIC, registered as Legon Interdenominational Church began as a fellowship in the 1970’s by 
Dr. Frederick Phillips, Prof. Alan Duthie, Rev. Joshua Kudadjie and Prof. Kwadzo Senanu on 
the University of Ghana (UG), Legon Campus. The church was established to promote 
fellowship and actionable Christian living especially on campus as there was no place that 
Christians could fellowship all year-round, especially when school was on break. On Easter 
Sunday, March 26, 1978, the “Legon Residents Congregation” was established. 
The church initially fellowshipped at the Legon Hall Chapel until it moved to its current 
location behind the Biochemistry Department in 1998, where the Saint Thomas Aquinas 
Catholic Church and the Christ Anglican Church are also located. 
39 
 
University of Ghana http://ugspace.ug.edu.gh
The church continued to grow in membership and funds received. The current roll of 
registered members stands at two thousand and seventy-three with about one thousand one 
hundred attendees on Sundays as at April, 2019. The steady growth in membership and funds 
compelled the leadership to create a bank account to facilitate the collection and usage of 
funds.  
Also in response to the growth in membership, other formalized structures referred to as 
ministries were constituted to meet the needs of members and enhance the administration of 
the church. The ministries play specific defined roles in the undertaking of activities of the 
church. Some of such roles are the chapel preparation, reception of visitors, the creative arts 
among others. 
Currently, the Church is run with a Constitution, as explained by Pfeffer and Salancik (1978), 
where there needs to be a management system in place to guide activities and usage of 
resources in order to promote accountability and compliance. The main goal of the church is 
to witness about the saving power of Jesus Christ and demonstrate His sovereignty through 
its worship, discipleship, fostering of spiritual growth, etc. this is seen in their three-point 
mission of being a Bible-believing, Gospel-preaching church that worships and witnesses 
Christ in order to disciple all in the fellowship and the UG campus at large. 
4.2.2 Socio-Economic Profile 
 In order to be of relevance to the society and the world at large, the church continuously 
supports various organizations and individuals, as well as makes provision for or takes social 
action when need arises. As at the end of 2019 the church supports 13 Christian based 
organizations, has a needy fund (for the public), LIC education fund, UG needy students’ 
fund (for students not on the education fund), and other funds as the needs are made known to 
40 
 
University of Ghana http://ugspace.ug.edu.gh
the church . The church is further taking practical steps to improve the lives of those within 
its reach by engaging actively in plastic waste separation, mental health interventions, and 
student leadership programs, among other things.   
4.3 Field Data Analysis 
The study seeks to ascertain the nature of financial management of a non-orthodox church. 
Data was collected from interviews with the staff and leaders of the church in charge of 
financial matters and members of LIC to understand the entire financial management 
structure of the church from the various perspectives. The exploration into the financial 
management of the church aided in the evaluation of whether it has an efficient system or 
otherwise. The annual reports and financial manual of the church dubbed Financial and 
Accounting Policy Document (FAPD) were also reviewed. The data was thereafter analyzed 
by reviewing the current internal capacity of the church and thereafter evaluated them under 
three major themes, these are: cash management, investment management and internal 
control and accountability.  
4.3.1  Internal Assessment 
The McKinsey framework is employed to help identify the internal strengths and weaknesses 
of the church. The appraisal of the strategy, structure, systems, style, share values, skills and 
staffing of the church helped identify the inputs the church had invested in towards their 
attainment of their set objectives. Emphasis was placed on inputs attributed to financial 
management, Van (2010).  
4.3.1.1 Strategy 
LIC aims to ensure that Christ is professed all over the world. It thus focuses on the 
acquisition and development of resources (human or material) to ensure that this goal is 
41 
 
University of Ghana http://ugspace.ug.edu.gh
achieved without compromising these vales. The implementation of this strategy is evident 
through the various ministries of the church and their functions.   
The design of LIC’s administrative system is structured with separation of powers in the 
performance of roles and responsibilities, involvement of members of the running of its 
activities and transparency in decision making regarding its finances and how they are 
managed. 
4.3.1.2 Structure And Leadership 
The general objective of a review of the financial management system seeks to describe the 
framework the church is working by, the authority lines, staff qualification and activities of 
member volunteers. It is thus essential to review the organizational structure and its 
components as they are in charge of the formulation, implementation and control of the 
financial management framework of the church. 
• The leadership of LIC comprises the LIC Family, Board of Trustees, Council of 
Elders (COE) which includes the pastors, the Church Administration. LIC Family is 
the governing and legislative body of LIC and it is comprised of all full members at 
Annual General Meeting (AGM) or special meetings of the church making it the 
highest authority. The LIC family has a COE who oversee the day to day 
administration of the church on their behalf.  
• The COE is supported by a Secretariat headed by the Church Administrator. It also 
has function based operational units called ‘ministries’ and sub ministries of 
volunteers, who are all members of the LIC, through which it carries out specific roles 
and activities.  The church also has a Joint Sectional Meeting (J.S.M.) comprising the 
Council of Elders, Leaders of Ministries and Area Fellowships and other established 
bodies. Church administration refers to the actual staffs of the church who engage in 
42 
 
University of Ghana http://ugspace.ug.edu.gh
the operations of the secretarial and support services of the church in accordance with 
their profession. Financial issues are handled by the Church Administration Ministry 
(CAM) through the Budget and Finance, Procurement, Human Resource Management 
and Facility Management sub-ministries (LIC Constitution, 2010). 
 Figure 2: LIC Organogram 
LIC FAMILY 
BOARD OF 
 COE  (12 ELECTED MEMBERS   AND PASTORS) TRUSTEES (7) 
CHURCH ADMINISTRATOR  AREA FELLOWSHIPS, JOINT 
WITH SECTIONAL MEETINGS  
12  MINISTRIES 
 SECRETARIAT AND AND OTHER ESTABLISHED 
SUPPORT SERVICES  BODIES 
CHURCH ADMINISTRATION 
MINISTRY 
BUDGET AND FINANCE 
PROCUREMENT  
HUMAN RESOURCE 
MANAGEMENT 
FACILITY MANAGEMENT  
 
Source: Authors construct 
The Council of Elders and Church Administration Ministry 
The COE is the main governing body of the church and has oversight over all aspects of the 
church ranging from finance, human resources, procurements, legal advice, etc. The council 
comprises of 12 full members of the church, elected at AGM by the LIC family. The 12 
members then elect a presiding elder and two deputies from amongst them to head the 
council. All committees under the COE are headed by either deputy. By convention, the first 
43 
 
University of Ghana http://ugspace.ug.edu.gh
deputy presiding elder is in charge of the finance and audit team. This may however be 
changed if the elected deputy, for a period, does not have the required background to lead the 
team as it is not a written rule. Each member is eligible to hold office for two consecutive two 
year terms only. The COE are thus the stewards of the church’s resources and act on behalf of 
the members to promote efficiency and effectiveness in church operations. The pastors serve 
on the COE and take part in the decision making of the church but are not an active part of 
the operations and technical decision making of the church functions.   
The appointment onto the COE is based on Christian values and experiences in the church 
and not educational or experiential backgrounds; hence there could be periods where only a 
few or no elders would be available to provide insight into technical financial decisions. The 
turnover of the COE also makes it difficult to implement or follow through with strategic 
activities effectively especially if handing over is not taken seriously. 
The COE has a finance and audit sub-committee that oversees all financial administrative 
work in the church. Their oversight spans from the staff schedules to the ministry volunteers 
as well as consultants. The church has been privileged to have a number of qualified 
(qualified here refers to educational background and expertise in economics, accounting or 
finance) and experienced elders to take up the role over the years. The appointment basis unto 
the COE however cannot guarantee this trend as election is not based on qualification. This 
may mean that the same qualified elders and leaders of COE would have to engage in all the 
financial activities, which has the potential to skew the desire for segmentation of duties and 
transparency as outlined in the church’s financial manual. Though the elders are able to 
engage qualified members of the church in such events, the structure would exude more 
confidence if its elders are knowledgeable in the areas they are overseeing. 
44 
 
University of Ghana http://ugspace.ug.edu.gh
The various ministries of the church take on a number of functions, from spiritual roles to 
administrative ones to ensure that all the objectives of the church are attained. The members 
of these ministries however serve as volunteers in the service of God and His church, just like 
the council. The members opt to join the ministry of their choice as ‘called’ by God. 
However, units that require technical abilities such as the finance and worship units, 
respectively, mostly join in based on their qualifications, skills and experiences. All 
ministries report their schedule of activities, budgets, performance reports, amongst others to 
the COE. 
The ministries are: 
 Liturgy And Chapel Preparation Ministry 
 Church Administration Ministry 
 Worship And Creative Arts Ministry 
 Children’s Ministry 
 Pastoral Care And Counselling Ministry 
 Welfare and Visitation Ministry 
 Reception and Hospitality Ministry 
 Church Education Ministry 
 Evangelism and Mission’s Ministry 
 Prayer Ministry 
 Social Action Ministry 
 Youth Ministry 
 
Ministries and other bodies are established in response to needs of the church. 
The COE is obligated by the constitution of the church to provide audited financial 
statements to the members annually at the AGM. This is done in compliance with the 
regulations of International Financial Reporting Standards (IFRS) for Small and Medium-
sized Entities (SMEs). COE therefore guarantees that all statements use the appropriate 
45 
 
University of Ghana http://ugspace.ug.edu.gh
accounting policies and prudent judgments’ required and that all applicable standards have 
been adhered to. 
The Church Administration Ministry is an advisory body that aids the COE in its 
administrative duties. The members of CAM operate in the following portfolios: the 
coordinator and deputy, secretary, procurement coordinator, finance and budget secretary, 
facility management secretary, human resource coordinator, COE representative and the 
church administrator. The ministry holds a meeting each quarter to address management 
concerns in the church. It also organizes training sessions for other ministry leaders to aid 
them prepare their ministry budgets per standards among other relevant financial 
management skills. It may have ad hoc meetings when the need arises to address pressing 
matters. Its budget and finance sub-ministry is in charge of budget preparation and offering 
counting and processing so it can be banked.  
4.3.1.3 Staffing And Skills 
The church administration provides secretarial and support services for the operations of the 
church. They are distinct from the CAM who are a volunteer based group. The church has 
thirteen (13) staff three (3) of whom are directly involved in the finances, namely; the church 
administrator, the accountant and a contract accounting assistant. All staff especially the 
finance staff were hired based on their educational background and experience. Preference 
was however given to LIC members in the selection process, but not at the expense of 
competence. The study of Woodbine (1997) had comparable results with regards to ensuring 
that staff had the requisite skills needed. It is however dissimilar to the findings of Amoah 
and Gyimah (2014) who seemed more interested in engaging its members in the activities of 
the church than ensuring those activities were in the right hands. The accountant is tasked 
with preparing all the necessary financial statements needed in a timely manner so the COE 
46 
 
University of Ghana http://ugspace.ug.edu.gh
can make informed decisions. The church administrator works directly with the COE in 
implementation of tasks such as fund disbursements fund disbursement and acts as a mediator 
between the staff and the COE. 
The COE and CAM have had many members with financial, accounting, auditing and 
economics background who have applied their acquired skills and experience over the years 
in support LIC. Similar to the COE, CAM is a volunteer-based team hence it is possible for a 
volunteer to have no direct requisite skills and experience.  
Despite the challenges, LIC always ensures that each decision made is under the guidance of 
qualified professionals. This gap in technical knowledge conversely, may be filled by a 
member with the required skill-set needed, emphasizing the iteration of Kluver (2001) that 
churches usually prefer member participation to that of externals. The latter is just a 
contingency. This also, is in line with the Laughlin (1988) proposal that before anyone is 
charged with any financial management role, that person is to possess the requisite skills for 
the task. This is contrary however to the findings of Agyei and Kusi (2006), who found that 
most churches were being managed financially by their pastors irrespective of their level of 
financial knowledge, resulting in only 26.7% of them keeping good financial records. This 
has been true of the church since its inception. Even when its pastors were from the 
Methodist church the principles and operational guidelines of the Methodists did not interfere 
with LIC. 
4.3.1.4 Systems 
LIC has policies, procedures and processes guiding its operations. Some are documented, 
whilst some are not. Some of the documented operational guiding materials are the 
constitution and the financial management manual which were drafted in 2010. It also adopts 
global frameworks such as the Generally Accepted Accounting Principles (GAAP) in its 
47 
 
University of Ghana http://ugspace.ug.edu.gh
accounting operations so as to comply with acceptable global standards. The various 
ministries also have their guiding principles which are in line with the LIC constitution and 
the Holy Bible.  
Financial Management Manual (FAPD) 
The COE contracted a team of technical experts from the church to draft a financial 
management manual in 2010. The proposed manual was to suggest systems, operational 
procedures, accounting policies and frameworks that highlighted the entire financial 
management systems the church was or would be exposed to. It was then approved by the 
COE and adopted by the church for implementation. The COE saw the need for this manual 
due to the exponential growth in resources of the church and deemed it wise to create a policy 
or guidelines to ensure efficient utilization of resources whilst preventing the tendency for 
abuse hence promoting accountability and confidence in the church (Booth, 1993). Though 
the manual is adapted from secular frameworks such as the GAAP, it also takes inspiration 
from Christian Stewardship (Rom 12:1, 1 Cor 4:2, Matt 28: 18-20). The latter emphasizes the 
need to work hard and use the church’s resources efficiently as they all belong to God and is 
needed to expand his mission. The principles adopted are from GAAP for non-profit 
organizations. The financial reports are prepared on a cash basis. Though churches do not pay 
tax on their income in Ghana, certain operations and activities oblige them to pay tax. Pay As 
You Earn (PAYE) is paid on the salaries of the staff of the church. A withholding tax is also 
paid on acquisition of goods. 
The implementation of the manual was to be overseen by the COE and CAM. These two 
separate bodies have over the years complemented each other in the bid to promote financial 
management synergies in the church. There have however been a few implementation 
challenges as highlighted above, but the most prominent ones were with regards to turnover 
48 
 
University of Ghana http://ugspace.ug.edu.gh
of COE and possible volunteers with no experience or qualification. These challenges 
coupled with the high cost of implementing some strategies have caused some policies and 
strategies to be relegated over the years. An instance is the need for an internal auditor which 
is stipulated in the manual. This has however not materialized since 2010 due to the high cost 
of employing one. It is also stipulated that the manual is to be reviewed every two years, so as 
to be up to date with innovations and new conventions as well as be abreast with current 
regulations, but this has not been done before due to lack of follow up and few volunteers, 
also, some staff are not even aware of the existence of the said manual which calls to question 
if it is actually being implemented. 
4.3.1.5  Leadership Style 
LIC engages in participatory leadership. Decisions are taken at meetings of committees by 
consensus or voting. The decisions of these committees or groups may however be subject to 
approval by the LIC family at the ‘family meetings’ or AGM. There is distinction between 
the role of the pastor and the administration of the church by the COE. Their operations are 
clearly defined. 
4.3.1.6  Shared Values 
LIC bases all its operations and decisions primarily on the beliefs of the Christian faith. 
Cultural, societal and technological norms or standards may also be adopted in the operations 
and management of the church without compromising its core belief and Biblical principles. 
4.3.2 Sources And Uses Of Income 
To better understand how the funds are managed it is essential to ascertain how the funds are 
acquired and utilized. 
49 
 
University of Ghana http://ugspace.ug.edu.gh
4.3.2.1  Sources Of Income 
The church has over the years experienced a progressive growth in its income. Any decline is 
usually relatively insignificant with a reversal in subsequent weeks. Income receipt to LIC 
varies, below are the enumerated sources. 
 Donations: Also known as ‘non-earned income’ refers mainly to the offerings, thanksgiving 
and tithes given to the church by members during the services. It also denotes the various 
monies provided as gifts by individuals or organizations (Lightbody, 1999; Gruber, 2004; 
Ahiabor & Mensah, 2013; Mitchell, 2015).These donations may be of a general nature or 
designated for a purpose. That is, donors may either give monies for general use or may state 
the specific purpose for which they are to be used. The latter restricts the use of the monies as 
it can only be used for the disclosed purpose hence must be kept in separate funds. For 
instance, all funds provided during the church’s harvest (thanksgiving service) are designated 
for evangelism and missions. Members could also give offerings specifically towards the 
education fund. 
 Investment income: This refers to all gains of investments undertaken by LIC. These may be 
gains from a portfolio or business investment. These are explained further in the analysis. 
 Non-cash charitable gift income: This refers to all donations or gifts that are not cash based. 
For instance; land, buildings, chair. An example is the offertory envelopes donated to the 
church. 
 Bequest income: This refers to gifts left to the church upon the death of the donor. 
Specifically, donations from their estate at death. The church’s’ legal advisor and elders 
evaluate such donations to determine whether it is appropriate for the church to accept the 
gift before it is claimed by LIC. 
50 
 
University of Ghana http://ugspace.ug.edu.gh
 Special event income: This refers to revenue from events held or hosted by LIC. Income 
earned such as registration fees are added to the funds. This is however separated from the 
general income. 
4.3.2.2 Uses Of Income 
In LIC, expenditure may only be incurred if it has been budgeted for. Otherwise, a requisition 
is made and upon approval by the council of elders (COE), funds are disbursed. No funds are 
to be disbursed without the required documentation.  Funds are mainly used for utilities, 
personnel emoluments, ministry expenses, transport and travelling expenses, etc.  
The main objective in the management of expenses and liabilities is to avoid indebtedness. 
There are however scenarios where this cannot be done away with, these are; accruals, unpaid 
amounts of contracts, retention and payables. The church takes pride in its ability to meet all 
its obligations and has never fallen short of that standard. 
4.3.3 Cash Management 
The theme of cash management simply focuses on addressing the cash framework employed 
by the church. This framework looks at the existence of a cash policy, qualified personnel, 
compliance with policy, management of cash sources and how these are disbursed.   
There is no specific manual for cash management, as the comprehensive manual served as its 
guideline source. Nonetheless, there are current conventions and GAAP that the management 
team complies with. The cash management is strictly guided by the budget and this is 
vehemently adhered to. The staff and volunteers in charge of this function are either 
professionally qualified or trained by the church (in the case of volunteers). It is a closed-
circuit function that not just anyone can be a part of. It is heavily monitored by the COE. This 
is done through physical COE presence during all activities that have to do with cash and the 
51 
 
University of Ghana http://ugspace.ug.edu.gh
need for authority from at least two COE members to take any action with regards to the bank 
accounts. 
The church has two main bank accounts; a cedi and dollar account. There are four signatories 
to the account and all four are members of the COE. However, any two of these elders can 
sign a document or cheque at a time. A cheque beyond a threshold stipulated by the elders 
would have to be co-signed by at least one of the three presiding elders. 
Sunday is the ‘bank day’ for the church as funds are usually banked once a week. Therefore 
all receipts that are collected in the course of the week are kept until Sunday when it is 
banked together with the offertory. The counting team (a sub-committee under CAM) is in 
charge of the offerings received on Sundays. Immediately after the offerings are collected, 
two members of the team accompany the ushers to leave the monies in a secure room. After 
the services, the team then meets in a different secure room to count the money. The 
necessary technologies such as the counting machine have been made available to the team to 
enhance the task and limit mistakes. The funds are then immediately handed over to a team 
from the bank in exchange for a pay in slip. The monies are thus considered banked. This 
high level of coordination, security and compliance was found to be absent from the churches 
in the Ashanti and Cape Coast as reported by Agyei-Mensah (2016) and Shaibu (2013) 
respectively. The counting committee, individual offertory envelopes, regular banking of 
cash and segregation of duties were among Woodbine’s (1997) strategies to ensure sound and 
smooth cash management. 
Contrary to the manual which stipulates that a member of the counting team is to go and 
deposit the funds at the bank, the bank officials rather go to the church premises to secure the 
funds under heavy security. The rationale is to increase the level of security the funds are 
52 
 
University of Ghana http://ugspace.ug.edu.gh
under, and to minimize risk to the members of the church. It is also a more effective option, 
according to the church administrator; acting as a form of insurance. 
The use of actual cash in the church administration is limited. Funds are usually paid by 
cheques addressed to the vendors. Cheques are not pre-signed, no matter the situation and 
they are kept under lock and key. All documentation on receipts and payments are kept in a 
secure location. Most of them are also documented and backed up on the internet. Overall, it 
seems the cash management system is healthy as it has a management team of professionals 
who adhere to the international standards for management principles. The absence of any 
mismanagement also goes to say a lot about the efficiency of the practices and employed and 
the effectiveness of the cash internal controls. The main test of health for the cash system is 
the ability for the current inflows to meet the needs of the current outflows. The current ratio 
for LIC for the year ended 2018 was 8.02 as against 2017s 5.06. This means that for every 
cedi of liability, LIC has 8.02 cedis of liquid assets to offset it. This is a good sign as the 
church is not overwhelmed in debt and manages its assets so as to continuously increase in 
value. 
The seeming loophole in the cash management system is the lack of documented guidelines, 
despite the ability of the stakeholders to act rightly according to the accounting conventions. 
The reverse was established by Agyei-Mensah (2016) who found that churches in Kumasi 
had cash management policies, but there was no adherence. 
4.3.4 Investment Management 
The evaluation of the investment function is to ascertain the premise for investments and if 
that is applied at all times.  It also seeks to ascertain if the investments engaged in are in 
accordance with the specifications of the church. 
53 
 
University of Ghana http://ugspace.ug.edu.gh
The principal rule of investment is that all income in excess of short term needs is to be 
invested in liquid income producing investments. Short term needs refers to operational and 
budgeted expenses needed for a period and an emergency cushion, all funds in excess of this 
are to be invested. The church has no business investment which is in sharp contrast with 
some Ghanaian churches (Amoah and Gyimah, 2014). It only deals with portfolio 
investments. These investments are only to be made with reputable and licensed institutions 
prioritizing capital preservation and liquidity. A well-balanced portfolio is required with no 
need for unnecessary risk. Some of the instruments the church has delved in are interest 
bearing current accounts, treasury bills, certificate of deposits, call accounts, fixed deposits, 
etc. similar to corporate entities; the proceeds of these investments are taxed. 
There is no specific management board in charge of church investments, quite like the case of 
some churches in the study conducted by Amoah and Gyimah (2014) and was found to slow 
down decision making. The Board of trustees are the custodians of the assets and liabilities of 
the church; they thus manage these in trust for the church. Initiatives and reviews for 
investments are done by COE upon approval from the board. The elders therefore cannot 
claim assets or incur liabilities without the approval of the board of trustees. 
The church does not give out loans to its members. This is to prevent the abuse of funds 
which could lead to a high bad debt ratio. They have however created interventions such as 
the credit union, welfare ministry and area fellowships among others to cater for the physical 
needs of members. Loans are however provided to the staff of the church upon review. The 
loan to income value should however not be more than 40% of the basic pay of the staffer. 
The particular investment class selected may depend on the need of the church. For instance, 
if the church is in need of a specific amount for a designated project, they can find an 
investment vehicle that would meet that need given the current amount available. Also, if 
54 
 
University of Ghana http://ugspace.ug.edu.gh
funds for a particular project is available but the project has not yet began those funds could 
be invested in a vehicle with a maturity to match the expected time the project is to begin. 
Investments are thus guided by the annual plans as it allows them to meet their set goals 
given the monies available as established by Mpesha (2003). This substantiates the insight 
provided by the Ghanaian Times (2010) encouraging churches to be innovative in fund 
generation and not just depend on members for funds. 
The investments in the church seem to be heavily regulated especially with the quarterly 
evaluations and the specificity with which they are engaged in. The end of year 
accountability at the church’s AGM also ensures that the elders do not invest in activities or 
portfolios that are contrary to the beliefs and standards of the church mainly with regards to 
risk and the Christian principles. 
4.3.5 Internal Control and Accountability 
This section addresses the question of whether the church has internal control measures and if 
these measures are adhered to. This coupled with the transparency of activities and frequent 
disclosure of information would inform the level of accountability practiced by LIC.  
To ensure proper controls are meted out, the church is committed to carrying out its 
operations as a corporate body would, this is a similar sentiment expressed by Pallock (1991), 
who expressed that despite the non-profit nature of a church, it is still operated with the 
seriousness and intensity of a profit-making firm. Though LIC is not a profit-oriented 
organization, it needs monies for its operations and in the pursuance of its mission thus runs 
like a profit corporation would run with the right checks, balances and corrective measures in 
place. This is in line with the observations of Irvine (2005) which iterated the significance of 
accounting and control policies as a means of maintaining the church’s significance to 
society. This is because it is through the efficient utilization of funds, which is ensured by 
55 
 
University of Ghana http://ugspace.ug.edu.gh
accounting and control policies, that monies can be acquired and directed towards these 
social initiatives.  
Beyond the corporate level structure, LIC provides opportunities for counselling and 
reconciliation, in the event a member is found acting in a way contrary to the guidelines and 
the principles of Christianity and removed from that portfolio as a result. This is quite the 
opposite of what Ahiabor and Mensah (2013) as well as Amoah and Gyimah (2014) found in 
their study as the church management of the studied churches was permissible towards 
persons or situations that were not favorable for the church’s operations to persist in the name 
of “we are all members of the church.” There is thus a clear distinction between ‘church’ and 
the ‘administration’ in the operations of LIC. 
The church has never recorded an occurrence of embezzlement or finance related issues. The 
credibility of this claim is further guaranteed as the external auditors have never hinted as 
such. The COE runs a tight ship as it requires monthly cash flow statements and 
reconciliation statements, as highlighted in Shaibu’s (2013) study of offering management in 
Cape Coast. They also expect quarterly investment statements with which all investments are 
appraised. 
The church has in place key internal control activities that are to aid in minimizing the 
occurrence of errors and inappropriate actions. These activities are enumerated below. 
 Segregation of duties: control duties and tasks are divided or undertaken by different persons. 
That is, after the budget team (CAM) prepares the budget, it is reviewed and approved by the 
COE. The implementation of budgetary tasks and fund disbursement is done by the church 
administrator with corresponding oversight from COE. The financial statements are prepared 
by the accountant and this is also reviewed by the COE. At the end of the financial year, the 
56 
 
University of Ghana http://ugspace.ug.edu.gh
external auditor also audits the accounts after which it is presented to the congregation at the 
AGM of the church. It is thus difficult to circumvent this system that is strictly adhered to. 
 Authorization and approval: Activities are subject to the approval of the ministry in charge 
and subsequently the COE. They make request for funds as and when funding is required. 
These requests and approvals are often documented for review purposes. All activities 
engaged in must be in accordance with the budget, otherwise based on its urgency, and would 
seek COEs permission to carry on. For instance, all requests must be made through a 
requisition form which is endorsed by the church administrator and a COE member. 
 Reconciliation and review: The COE meets monthly to evaluate operations in the church. The 
monthly cash flows are reviewed to ensure compliance with budgetary allocations. They are 
checked for misapplications. Bank reconciliations are also done monthly; this is the main task 
of the contract assistant accountant. The main review of activities is done at the AGM where 
each ministry and the church as a whole are evaluated. 
 Physical security: All the church’s assets are under a 24- hour security watch. The church has 
put in place many security systems to ensure safety. There are security cameras in the church, a 
24/7 security service, rails and guards where needed and impenetrable lock systems for certain 
locations. Fixed assets have also been duly labeled and numbered to enhance an inventory 
check. 
The above ensure that assets are safeguarded, compliance is encouraged, and operational 
efficiency and the reliability of the financial statements are promoted. 
The strict controls, lines of authority and supervision are in sharp contrast with the findings of 
some studies (Laughlin, 1988; Ahiabor and Mensah, 2013) as members are trusted calling such 
controls insignificant due to their “Christian” personality thus few checks, reviews or follow 
ups on operations are done. The controls under adoption by LIC are however in line with 
Shaibu (2013) recommendation to the Pentecostal churches. 
57 
 
University of Ghana http://ugspace.ug.edu.gh
The main check and form of accountability is the AGM hosted annually by the COE so all 
members can evaluate the years activities and demand explanations for actions taken during the 
year. This is a very uncommon feature for a church, more so a non-orthodox church. The elders 
are held accountable for every cedi spent and must be able to justify every action taken. For 
instance, in 2015, some concerns were raised about the increasing costs of expenditure and 
financial projects the church could engage in to aid in fulfilling their mission. At the 2018 
meeting, there were further questions about the expenditure, management of accounts, portfolio 
investments and insurance schemes of the church. The active inclusion of members in the 
financial management process hence helps serve as a safeguard for the funds. 
 
LIC has made it a point to ensure that these internal controls are adhered to and evaluated with no 
prejudice to the credibility and righteousness of the actors in charge. The controls apply to all 
actors, whether staff, volunteer or elder. This to prevent the kind of results Amoah and Gyimah 
(2014) had in its study of churches in the Kumasi Metro Area from manifesting in LIC. The 
results as expressed by Amoah and Gyimah (2014) showed apathy and non-challans for the 
works being done because they were for the church. 
4.4 Conclusion 
LIC has been found to run its operations just as a profit-making firm would with the aim of 
treating Gods resources with the care and efficiency it deserves so they could be used for the 
purposes for which they were established. The presence of a financial manual, professionally 
trained staff and volunteers, strict managerial systems and external overseers, precise 
documentation and segregation of duties and authority gives confidence in the financial 
system of the church. 
 
58 
 
University of Ghana http://ugspace.ug.edu.gh
Chapter Five 
Summary, Conclusions And Recommendations 
5.1 Introduction 
The final chapter presents a summary of the study. Also, this chapter discusses the 
conclusions made from this study and suggested some recommendations that could 
implemented. 
5.2 Summary Of The Study 
This study focused on the financial management of a non- orthodox church, LIC, exploring 
the cash and investment management as well as the internal control and accountability 
systems in the church. This was motivated by the increasing incidence of fraud and misuse of 
church funds which was affecting the confidence of the public in the institution of the church 
and the desire of stakeholders to understand the measures put in place, if any, to curb the 
menace. 
LIC was selected as it fit the gap criteria needed for the study and seemingly had a financial 
framework in place that could be evaluated. Qualitative instruments such as interviews, 
observations and report reviews were employed to aid in the evaluation of the current state of 
the church. A case study was adapted to aid in a detailed description of the financial 
management environment of the church and the organizational framework being employed. 
The thematic analysis and McKinsey’s 7s model were used respectively in the analyses 
yielding outcomes.  The Summary of the findings responds to the research questions covering 
the review of the following financial management issues in LIC: 
 The cash management system 
 The investment management system 
59 
 
University of Ghana http://ugspace.ug.edu.gh
 The internal control and accountability measures in place and their effectiveness 
5.2.1 General Findings 
LIC as a church has a general knowledge about all the facets needed to run the church. It also 
seems not to lack in the specific financial knowledge required. Furthermore, the church has 
the human and technological resources needed to manage a good financial system. The 
human resources in charge of the various financial units; be it staff, volunteers, advisors or 
overseers have the necessary educational and experiential knowledge and skills to perform 
their tasks to the letter. 
The church has a main governing body, the COE, which serves as the management board 
over all sections. This body thus provides strategic direction, implementation plans, provides 
resources (human or otherwise) needed for the implementation and evaluates progress and 
work done.  
LIC has an FM manual that gives insight into the financial segments of the church, whether 
cash management, investments or internal control. This manual however is not being 
implemented or adhered to. The operational activities are rather guided by secular 
conventions, guidelines and frameworks. 
The pastors have no direct hand in the financial management of the church. Though their 
inclusion on COE means they can make some input. They are however not custodians or 
signatories to any of the accounts as they do not have the requisite skill for that.  
5.2.2 Cash Management 
There seems to be a sound cash management practice in the church as all the cash functions 
have a formal framework or system that it follows. Despite, the fact that there is no cash 
management policy, all cash activities have structures and procedures that are well known to 
60 
 
University of Ghana http://ugspace.ug.edu.gh
all members of the respective teams. Majority of volunteers in charge of this function have 
the qualification to manage it effectively. 
There are lots of controls in place to safeguard the funds and the security of those who handle 
it. There is segregation of the various tasks, especially those with authority or control over 
accounts, safes, documents, etc. 
 Management of funds is strictly in accordance with the budget. There is usually very little 
variation between the budget and actual expenditure. 
The COE has been put in charge ensuring compliance to standards. This promotes 
accountability whilst minimizing probabilities of errors and misappropriation. Financial 
statements are reviewed frequently so that inputs and correctly measures can be made in a 
timely manner. There is little or no opportunity for cash to lie outside the bank system in the 
hands of individuals  
5.2.3 Investment Management 
This function also has no designated manual or governing body, but overseen by the COE. 
Investments choices are made primarily with capital preservation and liquidity as the main 
targets. The COE decides the investment classes to engage in based the needs of the church. 
Despite the absence of documented guidelines, the decisions made are based on information 
from volunteers or advisors with adequate technical knowledge to enable a sound decision to 
be made. Each investment engaged in has a clear purpose usually with a plan for the usage of 
the proceeds. 
61 
 
University of Ghana http://ugspace.ug.edu.gh
5.2.4 Internal Control 
There is a high level of internal control governing every facet of the financial scope. The 
main controls practiced are the segregation of duties, physical security, review and 
reconciliation and authorization and approvals. 
Proper documentation of transactions and activities is emphasized. These documents are 
safely saved in the church’s cloud network. Regular preparation of financial statements 
serves as a budgetary control and means of ensuring the right things are done. 
The church contracts external auditors to evaluate the financial statements to ensure that they 
are devoid from any material misstatements. The church also holds an AGM every year so 
the elders can account for all the activities that the church embarked on under their 
supervision. 
5.2.5 Challenges 
The main challenge LIC faces is the absence of a well-documented manual. The current 
manual did not pass the implementation stage and is nine (9) years out of date. The absence 
of a consistent and reliable document breeds discord and inconsistencies in operations. This is 
because each financial activity may have multiple execution options; the lack of a standard 
would mean anyone performing that task would be at liberty to use methods at their own 
discretion. The mode of appointment unto COE may result in trying times for the church 
eventually. This is because elders are elected not based on the functional needs of the church 
but based on Christian growth. It is thus possible that a council would arise that has no 
qualified finance member. This would cause great difficulty in the performance of their 
mandate to the church. Also, the turnover of the council may impede developmental and 
strategic movements as member changes could affect current projects, especially if handing 
62 
 
University of Ghana http://ugspace.ug.edu.gh
over and grooming of new elders is done poorly. This was one of the road blocks of the 2010 
manual. 
5.3 Conclusion 
As a religious NPO, the level of organization and consistency is exemplary. The church has 
much strength such as the incorporation of corporate or secular standards that promotes 
efficiency in all facets of the organization, professionally trained staff and volunteers, a 
corporate governance system (COE) who guide and monitor all activities, a good records-
keeping culture and a good brand name with regards to its integrity in all of its dealings. 
However, they face a few weaknesses; the lack of a functional manual and the nature of 
appointment unto the COE. There also seems to be an information gap where some 
significant is unknown to key personnel due to time lapse. The church is furnished with the 
technologies, opportunities and resources needed to achieve high FM standards. It has the 
resources to take advantage of opportunities that would enhance the framework. For instance, 
the use of cloud servers and other technological advancements, stable cash flows and little 
intervention from political and other regulatory authorities. The main threats are the political 
and economic variables that could affect operations or standards. 
The presence of this wealth of resources and proven track record which far exceed the 
weaknesses and threats are enough to conclude that LIC is indeed a church with good 
financial management.   
5.4 Recommendations 
The church needs a contemporary manual which incorporates the current systems and 
guidelines suitable for a religious NPO of its nature. The new manual should be 
comprehensive and incorporate the various segments of finance instead of trying to create a 
63 
 
University of Ghana http://ugspace.ug.edu.gh
manual for each segment, which has failed in the past. This will limit the degree of 
subjectivity employed in the performance of duties. 
CAM and COE can create cross-sectional sub-committees for each financial segment with 
specialized personnel for more frequent and relevant input and review. This would be aimed 
towards reducing the burden on the entire group whilst minimizing the bureaucracy so issues 
do not have to wait till it is addressed at the COE meetings. Smaller units could even hold ad 
hoc meetings to address burning matters.  
The basis for COE election should be reviewed to incorporate the strategic needs of the 
church. This is not to do away with spiritual growth standard, but to act as an additional 
requirement or criteria. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64 
 
University of Ghana http://ugspace.ug.edu.gh
Bibliography 
Acheampong, B. O. (2017). Planning and Management in the Missional Agenda of the 21st 
Century Church: A study of Lighthouse Church International. Verbum Et Ecclessia, p. 
38 (1). 
Agyei, A., & Kusi, R. (2006). Financial Reporting by Non-Profit Organisations in Ghana: A 
Study of Church Organiations in Ashanti Region. unpublished. 
Agyei-Mensah, B. (2016). Accountability and Internal Controls in Religious Organizations: 
A Study of Methodist Church Ghana. African J. Accounting, Auditing and Finance 5 
(2). 
Ahiabo, G., & Mensah, C. (2013). Effectvieness of Internal Control on the Finances of 
Churches in Greater Accra, Ghana. p. 4 (13). 
Ahortor, C. (2009). Financial Management Issues in Church Organizations. Seminar on 
Finanacial Management and Retirement Planning. Accra. 
Biblica Inc. (2011). New International Version.  
Biema, D. (1997, August 4). Kingdom Come. Times' Magazine. 
Boateng, R. (2016). Research Made Easy. CreateSpace Independent Publishing Platform. 
Booth, P. (1993). Accounting in Churched; a Research Framework and Agenda,. Accounting, 
Auditing Accountability Journal, 6, 37-67. 
Braun, V., & Clarke, V. (2016). Thematic Analysis. The Journal of Positive Psychology 
12(3), 297-298. 
(2015). Center for the study of Global Christianity. Gordon-Conwell Resources. 
Christ, U. C. (2010). A Church Finance Handbook For Church Treasurers and Finance 
Committees. Massachusetts Conference UCC. . Framingham: United Church of 
Christ. 
Council of Elders. (2010). Legon Interdenominational Church Constitution.  
Council of Elders. (2010). Legon Interdenominational Church Financial Accounting Policy 
Document.  
Council of Elders. (2015). Annual General Meeting. Accra: Crafts Concepts Ltd. 
Council of Elders. (2017). Annual General Meeting. Accra: Crafts Concepts Ltd. 
Council of Elders. (2018). Annual General Meeting. Accra: Crafts Concepts Ltd. 
Council of Elders. (2019). Annual General Meeting. Accra: Crafts Concepts Ltd. 
 
Cowan, A. (2006, July 9). Before the Downfall of a Priest, a Fondness for the Good Life. The 
New York Times. 
65 
 
University of Ghana http://ugspace.ug.edu.gh
Davis, J. H., & Donaldson, L. (1991). Stewardship Thaeory or Agency Theory: CEO 
Governance and Shareholder Returns. Australian Journal of Management 16(1). 
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a Stewardship Theory of 
Management. Academy of Management Review 22 (1), 20-47. 
Devaka, P. (2012). Transformational Tithing: Sacrifice and Reciprocity in a Neo-Pentecostal 
Church. Nova Religio: The Journal of Alternative and Emergent Religions, 15 (4) 85-
109. 
Durkheim, E. (1959). Elementary Forms of the Religious Life (Translated by J. W. Swanian). 
London: Allen& Unwin. 
Durkheim, E. (1976). The Elementary Forms of the Religious Life. George Allen & Unwin 
Ltd., London. 
Faith-Based Investing Combines Religious Values with Returns. (2013, September 30). The 
Denver Post. 
Financial Management. (2019). Retrieved from Wikipedia. 
Fried, V., & Hisrich, R. (1994). Toward a Model of Venture Capital Investment Decision 
Making. Financial Management Association International 23(3), 28-37. 
Ghana News Agency. (2013, August 23). Winners Chapel Pastor Arrested for Stealing. 
GhanaWeb. 
Ghana Statistical Service. (2010). Housing and Population Census Report. Accra. 
Goodley, S. (2017, May 21). Church of England Made Stunning 17% Return on Investments 
in 2016. The Guardian. 
Gruber, J. (2004). Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance. 
Journal of Public Economics , 2635-2655. 
Gyimah, A. B., & Amoah, M. (2014). Private Investment of Churches: A Study of Selected 
Cases in the Kumasi Metropolis of Ghana. International Journal of Research 1 (10). 
Gyimah, A., & Amoah, M. (2014). Private Investment of Churches: A Study of Selected 
Cases in the Kumasi Metropolis of Ghana. International Journal of Research 1(10), 
1224-1237. 
Hackett, C., & McClendon, D. (2017). Christians Remain Worlds Largest Religious Group, 
but They are Decliing in Europe. Washigton DC: Pews Research Centre. 
Harris, M. (1990). Working in the UK Voluntary Sector. Work, Employment and Society. 4 
(1), 467-482. 
Hillman, J., Withers, C., & Collins, J. (2009). Resource Dependency Theory: A Review. 
Journal of Management 35(6), 1404-1427. 
Huselid, M. (1995). The Impact of Human Resource Management Practices on Turnover, 
Productivity, and Corporate Financial Performance. The Academy of Management 
Journal 38(3), 635-672. 
66 
 
University of Ghana http://ugspace.ug.edu.gh
Irvine, H. J. (2005). Balancing money and mission in a local church budget. Accounting, 
Auditing & Accountability Journal, 211-237. 
Juneja, P. (2019). Financial Management. Retrieved from Management Study Guide. 
Kaplan Financial Knowledge Bank. (n.d.). Retrieved March 2019, from 
http://kfknowledgebank.kaplan.co.uk 
Kardos, G., & Smith, C. O. (1979). On Writing Engineering Cases. ASEE National 
Conference on Engineering Case Studies, (pp. 42-50). 
kasapafmonline.com. (2018, November 5). Voice of the Lord Church Members Quit Church 
After Pastor Was Fired. GhanaWeb. 
Kenton, W. (2018, August 1). Cash Management. Retrieved from Investopedia: 
www.investopedia.com/terms/c/cashmanabement.asp 
Kluvers, R. (2001). Budgeting in Catholic Parishes: An Exploratory Study. Financial 
Accountability & Management 17(1), 41-58. 
Krishnan, J. (2005). Audit Committee Quality and Internal Control: An Empirical Analysis. 
The Accounting Review 80(2), 649-675. 
Laughlin, R. C. (1998). Accounting in its social context: An Analysis of the Accounting 
System of the Church of England. Accounting and Accountability Journal, 1(2) 19-42. 
Laurie, C., & Larry, R. P. (2008). Church Growth and Decline: A Test of the Market-Based 
Approach. Review of Religious Research 49(3), 251-268. 
Leach, W. H. (1960). Financing the Local Church. American Academy of Political and Social 
Science, 332, 70-79. 
Lightbody, M. (2000). Storing and Shielding: Financial Management Behavior in a Church. 
Accounting, Auditing & Accountability Journal, 13 (2), 156-174. 
Martin, L. (2009). More Than Just Money: The Faith Gospel and Occult Economies in 
Contemporary Tanzania. Nova Religio: The Journal of Alternative and Emergent 
Religion 13(1), 41-67. 
McKinsey's 7S. (2011, 8 7). Retrieved 12 5, 2013, from Mind Tools: 
http://www.mindtools.com/subscribe.htm. 
Misachi, J. (2017). Religious Beliefs in Ghana. Worldatlas. 
Mitchell, G. (2015). Fiscal Leanness and Fiscal Responsiveness: Exploring the Normative 
Limits of Strategic Nonprofit Financial Management. Administation and Society 
49(9), 1272-1296. 
Mpesha, A. (2003). The Role of the Church in Microcredit Financing for Business 
Development in Tanzania. Grand Rapids, Calvin College. 
Pallock, D. ( 1991). Church Administration.USA.  
Paramasivan, C. S. (2012). Fianancial Management. New Delhi: New Age International (P) 
Limited, Publishers. 
67 
 
University of Ghana http://ugspace.ug.edu.gh
Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organizations: A Resource 
Dependence Perspective. New York: Harper & Row. 
Republic of Ghana. (2016). Public Financial Management Act, 2016 (Act 921). Ghana 
Publishing Company Ltd, Assembly Press, Accra. 
Ritchie, J. (2011). Retrieved from blog.mint.com: www.mint.com/blog/investing/how-
churches-invest 
Shaibu, I. A. (2013). Towards an Effective Management of Funds Generated from Offerings 
in the Church: A Study of some Selected Classical Pentecostal Churches in the 
Ashanti Region of Ghana.,. Research on Humanities and Social Sciences, 3 (2), 215-
222. 
Stark, R. (1999). Micro Foundations of Religion: A Revised Theory. Sociological Theory 
17(3), 264-289. 
Tanui, P. J., Omare, D., & Bitange, J. B. (2016). Internal Control System for Financial 
Management in the Church: A case of Protestant Churches in Eldoret Municipality, 
Kenya. European Journal of Accounting, Auditing and Finance Research 4 (6), 26-
46. 
(2017). The Religious Financial Fraud report.  
Tuckman, H. C. (1993). .Accumulating Financial Surpluses Of Nonprofit organizations. 
Governing, Leading and Managing NonProfit Organisations, Jossey-Bass, San 
Francisco, CA, 253-78. 
United Church of Christ. (2010). A Church Finance Handbook for Church Treasurers and 
Finance Committees. Massachussetts Conference UCC. Framingham: United Church 
of Christ. 
Walsh, C. (2009, November 19). God and Walmart. The Harvard Gazette. 
Walsham, G. (1993). Interpreting Information Systems in Organizations. Journal of the 
Operational Research Society 44(12). 
Woodbine, G. (1997). Cash Controls Within Christian Churches: An Exploration of the 
Determinants. Asian Review of Accounting 5 (2), 21-37. 
 
 
 
 
 
 
 
68 
 
University of Ghana http://ugspace.ug.edu.gh
APPENDIX 
INTERVIEW GUIDE 
GENERAL QUESTIONS 
1. What role do you play in the management of church funds? 
2. How is the financial management performance of the church? 
3. Is the church able to meet its financial obligation? 
4. What is the average growth rate of fund generation? 
5. Does the church have records of embezzlement or mismanagement? 
6. Is the church able to comply with the policy guidelines? 
7. Who prepares the financial statements? 
8. Is there an internal auditor? 
9. Does the church have a risk policy as stipulated in financial manual? 
10. Why has the financial manual not been updated since 2010? 
FINANACE TEAM 
1. What professional qualification does your portfolio require? 
2. Do you possess that requirement? 
3. Is there a strict entry requirement? 
4. Does the team face any external influence, eg. pastor? 
5. Are the members of the finance team supervised by a third party/ do you report to 
another body? 
6. Do all finance team members have a clear understanding of the finance manual? 
7. Are there training sessions to develop the skills of members? 
MANAGEMENT STRUCTURE 
1. Are there special management units for the various finance units? 
2. What is the tenure of board members? 
3. Is the board independent of the church administration? 
4. Does the board have a governing policy 
CASH MANAGEMENT 
1. How many bank accounts does the church operate? 
2. How are the receipts of funds recorded? 
69 
 
University of Ghana http://ugspace.ug.edu.gh
3. How often are funds banked? 
4. How many signatories does the account have? 
5. Is there physical documentation accompanying cheques? 
INVESTMENT MANAGEMENT 
1. How are projects financed? 
2. Is there an investment policy? 
3. What are proceeds used for? 
4. On what basis are loans or grants provided? 
INTERNAL CONTROL 
1. Is there internal control function? 
2. Is there external oversight? 
3. Are there guidelines for this function? 
4. How often are financial statements prepared and reviewed? 
5. How often are accounts reconciled? 
 
 
  
 
70