Internal Controls and Financial Management in Faith Based Organisations : A case study of Seventh-Day Adventists Church Central Uganda Conference

Abstract

The study examined the effect of internal controls on financial management in faith-based organizations with Seventh-day Adventist Church in Central Uganda Conference as a case study. Objectives of the study included; examining the effect of control environment on the management of finances, examining the effectiveness of control activities and establishing the effect of control monitoring, all on the financial management of SDA Church. The period of focus was between 2007 and 2010. The research adopted a cross-sectional survey design and triangulated both qualitative and quantitative methods. A sample size of 105 respondents was drawn from an accessible population of 125 respondents using both simple random and ______ sampling. Methods of data collection included mainly questionnaire survey and interview schedules with questionnaires and interview guides used as instruments. 100% the response rate was realized. Findings revealed a significant positive relationship for all variables thus control environment (.396**), control activities (.304**) and control monitoring (.330**) with financial management. Regression results indicated 14.8% (control environment), 8.4% control activities and 10.0% control monitoring variation or effect on financial management. Recommendation and Conclusion made is that other than faith, SDA churches need strong internal controls at the local church level for safeguarding the finances and increasing donor’s confidence for continued inflow of funds.