The Church Administration Society of Nigeria, CASON, has called on church leaders to apply caution and follow due diligence in the handling of church finance; warning that if care is not taken, they may run foul of the Company and Allied Matters Act – CAMA, 2020.
CASON gave the warning at its 2024 Annual General Meeting held recently in Lagos as a hybrid session. The lead paper that formed the fulcrum of the discussion was delivered by Mr. Segun Shelleh, a chartered accountant of multiple decades who sits on the Board of CASON as Treasurer. He sensitized churches on various core issues of the law.
On income and property of a church organisation, Shelleh disclosed that Section 838(i) of CAMA 2020 states that, “the income and property of a body or association whose trustees are incorporated under this part of this Act shall be applied solely towards “The promotion of the objectives of the body as set forth in its Constitution; and that no portion from it shall be paid or transferred directly or indirectly, by way of dividends, bonuses, or otherwise by way of profit to any of the members of the association.”
Shelleh explained that the implication of this provision of the Act is that the funds and the assets of the organization must strictly be used to uphold the objectives of the Church as laid out in the legal constitution submitted to the Commission at the incorporation of the Church.
Profit Sharing Is Illegal. “No portion of the gains resulting from the operations of the Church can be shared or distributed amongst the members of the Church or its leadership, comparable to what obtains in a business enterprise where profits are shared amongst the shareholders.”
He noted that “Section 838(ii) also did pronounce that no member of the council or governing body (except for the ex-officio) shall be entitled to or paid remuneration or salary of any type unless for the repayment of out-of-pocket expenses, reasonable rent for premises demised or let to the body or reasonable fee for services rendered.”
Section 838(iii) according to him “also spelt out the consequence of contravening the provision of Section 838 (i) & (ii) by stating clearly that a person who knowingly acts or joins in acting in contravention of this section, he is liable to refund such income or property so misapplied to the association.”
Contravening the provision of the act could also lead to the suspension of the trustees of the Church in accordance to Section 839(vi) of the Act.
“Any legitimate offering the Church is interested in pursuing which is not in the Constitution, should be included in the Constitution forthwith by approaching the Commission to alter the Constitution in line with Section 833 of CAMA 2020.″
He advised also that any person who is a trustee of the Church and may need to draw salaries from the organization, should immediately consider removing himself or herself from the trustees and remain just a staff of the organization rendering his or her service to the Church organization dutifully in compensation for the remuneration received.
On dormant account run by churches he said, “Sections 842(i) & (ii) of CAMA 2020 empowers banks in Nigeria to notify the Commission with the details of any dormant bank account(s) as defined under the relevant banking regulation, in its custody that is in the name of an Incorporated Trustee.
The Commission is charged, upon receiving the notification from the bank, to request the affected Incorporated Trustees to provide evidence of its activities within 15 days of the receipt of such request by the Commission. The failure of the Incorporated Trustees to satisfactorily provide such evidence within the 15 days window stated in the Act t, the Commission may dissolve the Incorporated Trustees and give direction to the bank to transfer the credit balance in the concerned bank account(s) to the bank account of any specified.
Shelleh therefore recommended that churches should not maintain more than five bank accounts per time for easy monitoring. He also emphasized: “It should be noted that the government is determined to stamp out terrorism in the country. The funding of which incidentally has been linked to some NGOs and even faith-based organizations.”
He also sounded a note of warning on the need to always submit the statements of account of the church to CAC adding that defaulting churches risk being fined. Shelleh however counselled that churches should do more of self-regulation. “If we refuse to self-regulate as churches within the Body of Christ, then the government will enforce it on us, and it may not be a beautiful thing at such moments.”
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