Budgeting and Financial Accountability in Religious Organisations: Evidence from Catholic and Lutheran Churches in Tanzania
Abstract
Financial accountability, as reflected in a high level of transparency and responsiveness to key stakeholders, is crucial for building trust in religious organisations, which play a significant role not only in faith and moral development but also in various socio-economic dimensions. Effective budgeting processes, including stakeholder participation in budget planning (goal setting), communication, and performance evaluation, are critical for enhancing financial accountability, thereby minimising the risk of resource mismanagement and ensuring responsible stewardship. This study examined the influence of budgeting on financial accountability in religious organisations, drawing evidence from Catholic and Lutheran churches in Tanzania. Survey data were collected from 471 participants, including church management and parish members in the Dar es Salaam region. The study employed Partial Least Squares Structural Equation Modelling (PLS–SEM) via SmartPLS 4 Software. Findings indicate that while budget participation and budget evaluation significantly enhance financial accountability, budget planning and communication, despite their positive relationship with accountability, have a non-significant effect. This study underscores the pivotal role of active member involvement in budget decisions and performance evaluation as key drivers in financial accountability in religious organisations, especially in developing countries like Tanzania. Future research directions are also discussed
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