Kampala, Uganda: Most Faith-Based Institutions in Uganda have poor research-based investment approaches, something that affects their operations, a renowned accountant has revealed.
CPA Charles Gerald Mugerwa, a Partner with Jasper Semu & Associates also said FBIs (Faith-Based Institutions) are failing to have proper Financial Management and accountability because their Institutions are characterized by corporate governance that is filled with corroboration of the existing leadership.
Mugerwa was presenting a paper on Financial Management in Faith-Based Institutions at a seminar organized by the Institute of Certified Accountants of Uganda (ICPAU). The daylong event was held at the Imperial Royale Hotel in Kampala on Thursday.
“It is a known fact that some leaders of FBIs are reported to take bribes and commission in some instances. The institutions are occasionally hit by self-seekers in their ranks raising very serious accountability and transparency concerns,” said CPA Mugerwa.
He observed that most FBIs are faced with overburdened faithful’s (donor fatigue).
He said the issue of complacency by established FBIs, like the FB schools who accommodate more than they can retain, is all geared towards generating their financial muscle
He took a swipe at splinter groups, especially from churches who take away followers with occasioned negative publicity
“We have issues of false prophets, faith is abused in faith-based institutions coupled with profiteers,” he said.
He noted that most FBIs still don’t do the required proper and good bookkeeping and records management.
“Majority still lack key market information something that leads to poor financial management. Financial Management needs one to have information, proper bookkeeping, and market information,” he advised.
He said key FM decisions include investment decision to maximize returns to the stakeholders.
He noted that the dividend distribution decision in the FBI is characterized by mismatches.
“FBIs and NGOs spend a lot of money at the launches and jubilee celebrations, which is a waste of money,” he said.
CPA Mugerwa said transparency and accountability in Financial Management is an emerging competitive and sustainability strategy in FBIs.
“FBIs compete for funds/donations and markets like any other business hence a need for astute FM strategies: he observed.
What to do
He advised the FBIs to always institute internal reviews, internal audits, and other internal control mechanisms at all levels.
“Practice resource-based investment and pricing decisions. Invest in marketing, PR and product development,” he said.
He urged the FBIs to Invest in HR cycle including selection and promotion based on performance evaluation other than favoritism or cliquism
Presenting a paper on Financial Reporting and accountability in faith-based institutions, Rev. Fr. Moses Musooka from Kampala Archdioceses said money is necessary and it makes FBIs the ecumenical factor that they want to become.
“We can’t say we are totally faith-based, we are mission based. We cannot lead poor people to heaven. We cannot promise paradise through agony, God is everything, God is wealth,” said Fr. Musooka.
He said that the issue of accountability in FBIs is mandatory and voluntary financial reporting requirements for FBIs
“Mandatory financial reporting requirements are imposed by law such as tax returns, while voluntary financial reports, on the other hand, are not enforceable by law but are important to ensure transparency and accountability,” he told the participants.
He said that most FBIs don’t exist to make profits but to serve communities where they belong therefore value for money is another important aspect in financial reporting and accountability with an aim to ensure economy, efficiency and effectiveness are achieved.
He advised the FBIs to always plan ahead of any project, saying: “If you want to die a natural death, fail to plan. Failure to plan is planning to fail.”