Budgeting Processes, Internal Controls, Organizational Characteristics and Performance of Selected Protestant and Evangelical Churches in Kenya

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.................................................................