Corporate Governance in the Roman Catholic Archdiocese of Lipa: A Study of Practices in the Local Church

A Concept PaperPresented to the Faculty of theCollege of Business, Economics, Accountancy and ManagementDe La Salle Lipa

In Partial FulfillmentOf the Requirements for the DegreeBACHELOR OF SCIENCE IN ACCOUNTANCY

By:Cosa, John Kenneth A.Gomez, Mattheus Lurenz A.Mistas, Kim Angelo

July 2015Area of StudyCorporate governance

Background of the studyReligious and other non-profit organizations have a responsibility to their various constituents and members to be fiscally responsible and transparent in carrying out their missions. These organizations rely on the public for a significant portion of their annual budget. Support is received by nonprofit organizations in the form of tithes, pledges or donations. The Roman Catholic Archdiocese of Lipa, the district of the Catholic Church in the province of Batangas, has 61 parishes and 229 priests serving the 96% Catholic faithful in the whole province according to the statistics of the Catholic Hierarchy (2014). Added to this, pastoral work cannot be accomplished without the different commissions assisting in the total well-being of every Catholic faithful in the local Church. Statement of the Problem Financial transparency is essential in non-profit organizations that they may establish corporate governance to their members. Also, it was a call by Pope Francis that financial transparency and accountability be established in all dioceses and congregations as to his reforms in the Vatican. As a religious institution, the Archdiocese of Lipa should jumpstart corporate governance as a role model of integrity, objectivity, transparency and financial accountability for its members.

Objectives of the Study1. Analyze the internal control system, fiscal oversight and financial management of the Archdiocesan Curia.2. Identify problems in the financial policies and systems of the Archdiocesan Curia.3. Promote financial transparency to all parishes and commissions of the Archdiocese of Lipa by providing suggestions to new policies and reforms.

HypothesesH1: The Archdiocese of Lipa does not promote corporate governance with regards to her financial standing.H2: The Archdiocese of Lipa is not financially accountable for financial transparency is not established among parishes and commissions.

Literature ReviewElson, OCallaghan and Walker (2007) researched on Corporate Governance in Religious Organizations: A Study of Current Practices in the Local Church. The study addressed corporate governance practices in religious organizations by examining fiscal oversight and financial management practices in the local church. Fiscal oversight includes the existence of an independent board of directors with a financial expert and documented policies and procedures. Financial management includes the existence and use of a budget, controls over cash receipts and disbursements, financial reporting and tax reporting and compliance. A questionnaire was used to collect data from various denominations. The results showed that churches do have adequate fiscal oversight and financial management controls. However, opportunity exists for improvement. Churches can do a better job of documenting their policies and procedures. In addition, they should communicate these policies and procedures to all employees. It also appears that church accounting personnel do not really know the requirements for preparing financial reports using generally accepted accounting principles. These personnel should consider attending a nonprofit course or seminar to increase their understanding of accounting standards relating to nonprofit reporting, especially Statement of Financial Accounting Standards No. 116, "Accounting for Contributions Received and Contributions Made" and Statement of Financial Accounting Standards No. 117, "Financial Statements of Not-for-Profit Organizations."

Theoretical FrameworkFiscal oversight

ParishesFinancial accountability

Archdiocese of LipaCommissions

Financial Management

Curia/Chancery

Proposed Research Design, Methods/ ProceduresThe researchers shall adapt the questionnaire of Elson, OCallaghan and Walker but will only be applicable to the Roman Catholic Archdiocese of Lipa. The questionnaires shall be spread all throughout the parishes, commissions and to the Archdiocesan Chancery. Contents of the questionnaires shall be categorized into two main sections, fiscal oversight and financial management. The statistical results shall then be interpreted by the researchers.

ReferencesCatholic Hierarchy. (n.d.). Retrieved from www.catholic-hierarchy.org/diocese/dlipa.htmlCORPORATE GOVERNANCE IN RELIGIOUS ORGANIZATIONS: A STUDY OF CURRENT PRACTICES IN THE LOCAL CHURCH: EBSCOhost. (n.d.). Retrieved from http://web.a.ebscohost.com/ehost/detail/detail?sid=80803bf6-56fd-446b-96e0-b7fbf786f717%40sessionmgr4004&vid=2&hid=4209&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=32473887