ASSESSING MOSQUE FINANCIAL EFFICIENCY THROUGH DATA ENVELOPMENT ANALYSIS

Nuzul Akhtar Baharudin; Hazriah Hasan; Nor Fadilah Bahari

doi:10.53840/ijiefer235

Authors

Nuzul Akhtar Baharudin Department of Business and Accounting, Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, 16100 Kota Bharu, Kelantan, Malaysia.
Hazriah Hasan Department of Business and Accounting, Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, 16100 Kota Bharu, Kelantan, Malaysia.
Nor Fadilah Bahari Department of Economics and Finance, Faculty of Economics, Accountancy and Management, Universiti Islam Selangor, Bandar Seri Putra, 43000 Kajang, Selangor, Malaysia.

DOI:

https://doi.org/10.53840/ijiefer235

Keywords:

Data Envelopment Analysis, Financial Efficiency, Fund Management, Mosque, Returns to Scale

Abstract

Although the economic role of mosques is increasing, the financial performance and utilization of mosque funds remain underexplored. This study addresses this gap by examining the financial efficiency of the Masjid Bandar Seri Putra over a five-year period, from 2020 to 2024, using Data Envelopment Analysis (DEA). This study considers each year as a decision-making unit (DMU). It employs an input and output orientations approach in both the CRS and VRS models. This mosque was selected due to its significant role as both a center of worship and a center of social, educational, and community development. The mosque's financial reports were used as the basis for the study, encompassing general funds and specific funds as inputs, while outputs comprised administrative expenses and society contributions/programs. The findings of the analysis indicate that under the CRS model, the mosque achieved full efficiency in 2020 and 2023, while inefficiency was observed in 2021, 2022, and 2024. Conversely, the VRS model indicates that the mosque is at full technical efficiency throughout the study period. Scale analysis revealed that inefficiency arises from operational scale issues, with specific years demonstrating increasing returns to scale (IRS) and decreasing returns to scale (DRS). The years 2020 and 2023 are recognized as benchmarks for enhancing financial strategies in future years. This study provides a theoretical contribution to the literature, specifically in mosque fund management, by providing empirical evidence on financial efficiency issues that have been typically overlooked. The study’s findings can assist mosque administration and religious authorities in formulating more effective financial strategies to maximize social benefits for the community.

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