Financial management practices and performance of Zakat institutions in Malaysia

Anuar, Fatimah Sakeenah and Mohd Alwi, Norhayati and Mohd Ariffin, Noraini (2019) Financial management practices and performance of Zakat institutions in Malaysia. IPN Journal of Research and Practice in Public Sector Accounting and Management, 9 (1). pp. 1-26. ISSN 2180-4508 E-ISSN 2682-9347

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Abstract

In Malaysia, critics have raised concerns over mismanagement and goal achievement in zakat institutions. In the light of this, zakat institutions have responded to these concerns by adopting greater transparency to show their accountability. This study examines the current financial management practices and performance in zakat institutions. Six elements of the Financial Management Accountability Index (FMAI), i.e. organisational management, budget, receipts, expenditures, assets and reporting, were used as a benchmark. The study also attempts to find a relationship between financial management practices and financial performance. It employed the census method where all 14 zakat institutions were enumerated, and a sample of 140 employees and 140 customers responded to performance questionnaires. Empirical data were collected mainly through three sets of questionnaires. The data were analysed using descriptive analysis and bivariate correlation. The findings show that receipts, disbursements and asset management are the most crucial areas reflecting a ‘good’ level of practice by zakat institutions. The results also show that there is a positive relationship between financial management and financial performance. This study is significant as it highlights areas for improvement and hence spurs the institutions to achieve their goal. The results may guide zakat institutions on the means to adopt greater transparency and accountability to the public in future.

Item Type:	Article (Journal)
Additional Information:	3574/78548
Uncontrolled Keywords:	zakat, financial management, accountability, performance.
Subjects:	BPH Islamic Economics BPH Islamic Economics > BPH531 Zakat H Social Sciences > HB Economic Theory > HB126.4 Islamic Economics H Social Sciences > HF Commerce > HF5001 Business. Business Administration > HF5601 Accounting. Bookkeeping
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences Kulliyyah of Economics and Management Sciences > Department of Accounting
Depositing User:	Dr Norhayati Mohd Alwi
Date Deposited:	18 Feb 2020 10:48
Last Modified:	28 Feb 2020 09:52
URI:	http://irep.iium.edu.my/id/eprint/78548

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