Financial Management Practice of Church: The Case of the Ethiopian Evangelical Church Mekane Yesus

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title


Addis Ababa University


Financial management practices in the faith based areas at large and in the churches specifically is not the recent development. Despite its age, the financial management practice has been challenged in the church because of two main reasons; the first is the source of income arise from volunteers, there is a thought not to monitor the resources with adequate professionals since it is seemed to be holy and the second is the sacred and secular divide the church in which separates the financial management to the secular one and seen as it is a profane. The existence of the aforementioned challenges on one hand and the ever growing resources of the Ethiopian Evangelical Church Mekane Yesus (EECMY) on the other hand are the two paradoxes. The study assessed the financial management practice of the EECMY for administering its financial resources within its structure. Population of the study consists of the 28 church units (synods) and 7 joint programs of the church, total of 35. The study was conducted based on purposively selected 15 church units and 5 joint programs. Non-probability sampling of purposive sampling method was used to draw samples from the population. Questionnaire was distributed to 25 leaders and 25 finance heads and chief accountants of the sampled units; interview was conducted with two higher officials of the church; secondary data such as consolidated financial statements, financial manual, and constitution of the church were used for analysis. The elements of financial management such as accounting records, financial planning, financial policy and organizational philosophy, financial reporting and monitoring and internal control activities were assessed in order to study financial management practice of the EECMY. The data was analyzed by using SPSS through descriptive statistics and the finding of the study indicated that the major challenges of the financial management practice of the EECMY are absence of cash flow statement for reporting, financial policy weakness in using modified cash base instead of following international and nationally accepted financial policies, insufficient number of professional accountants, unclear revenue source and fund uses in the lower level structure, lack of periodical comparison of plan versus actual budget, risk of not audited financial statements, inconsistency with ethical values in few areas, lower risk assessment duties, absence of internal audit activities, and absence of account reconciliations. The study recommends adoption of new financial standards, introduction of cash flow statement, addressing of risk assessment elements of the church, introduction & strengthening of internal audits, and concerned body of religious organizations and financial policy and standard setting bodies in Ethiopia to establish institution that confirms churches are operating with integrity, accountability and transparency



The Case of the ethiopian evangelical church mekane yesus