The Effect of Accountability, Transparency, And Integrity of Church Leaders on Fraud Prevention in The Management of Church Funds (original) (raw)
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uon.ac.ke, 2017
Presented by Martin Otundo Richard at academia.edu digital library to add knowledge to the world scholars and future researchers. Martin is a senior lecturer, researcher and data analyst in Kenya. He can be reached via +254721246744; martinotundo@gmail.com for all research assignments, data collection, analysis and any other consultancy work. ABSTRACT The study sought to establish the effect of Internal Controls and Organizational Characteristics on the relationship between the budgeting process and the performance of Churches in Kenya to address identified gaps in the literature review. There has been increased calls for church accountability due to reported fraudulent activities in churches and lack of consensus regarding the existence of robust budgeting and internal controls in religious organizations. Furthermore, reported fraud cover-up and unconcluded debate on whether there exists a conflict between the sacred and secular nature of accounting informed the focus of the study. Also, due to limited studies on churches focusing on budgeting, internal control, organizational characteristics, and the performance, this study addresses the knowledge gap within the Kenyan context. The objectives of the study were namely; to investigate the effect of the budgeting process on the performance, to determine the intervening effects of Internal Controls on the relationship between budgetary process and performance, to establish the moderating effect of Organizational Characteristics on the performance and to establish the joint effect of budgeting, Internal Controls and Organizational Characteristics on the performance of churches in Kenya. It was hypothesized that; there is no effect of budgeting processes on the performance of churches, there is no intervening effect of Internal Controls on the relationship between the budgeting process and the performance of churches, there is no moderating effect of Organizational Characteristics on the relationship between budgeting process and performance churches and there is no joint effect of the budgeting process, Internal Controls and Organizational Characteristics on the performance of churches in Kenya. Data from 96 churches were analyzed out of the 97 targeted reporting a response rate of 99%. The study used a positivistic research design and descriptive design. The study further used statistical tests that include Cronbach alpha, descriptive statistics such as the mean, standard deviation, skewness, kurtosis. Other analysis included correlational analysis while regression analysis was used to test the hypothesis. The study findings were that there was a statistically significant effect of budgeting process on the performance of churches of churches, Internal Controls have an intervening effects on the relationship between the budgeting process and the performance of churches in Kenya, there is a moderating effect of Organizational Characteristics on the relationship between budgeting process and performance churches in Kenya and there is a joint relationship of Budgeting Process, Internal Controls and Organizational Characteristics on the performance of churches in Kenya. The study found that the budgeting process and internal controls are adequately practiced in Churches in Kenya and that the two variables have a significant positive effect on performance. The study further found that organizational characteristics have a significant role in ensuring organizations improve their performance. The results of the study add to the existing knowledge regarding the debate on whether the budgeting process and Internal Controls exist in churches by showing that indeed they are practiced. By the study results indicating a significant relationship between the variables, the sacred versus secular debate reduces. The study demonstrated the relevance of positivism philosophy thus contributing to the debate on its relevance to modern research. Furthermore, the study reinforces the relevance of agency, budgeting, contingency and stewardship theories to churches. Since the study shows that Internal Controls and Organizational Characteristics have an intervening and moderating effect on the relationship between budgeting and performance, the study recommends development of church policies and enhanced training of church leaders around these variables. The study further recommends that future research consider inclusion of external factors and attempt to establish whether membership growth translates to revenue growth of churches in Kenya.