Charity Employee Pay questions

[CharityFlower]

A question about charity payroll for anyone who has experience running a charity.

Setting up a new charity and looking to employ a new CEO once we are established. The plan is the charity will hopefully build so that we can gradually start to employ further staff, but initially the first and sole staff member / employee will be the CEO who will run the charity day to day. We (the trustees) will have agreed the starting salary for the CEO.

I have scrutinised the CC guidance on payroll and employment law but one thing I'm still not clear on is about managing the payments of the CEO's salary. This will be via an external Accountant & Bookkeeper who will run the payroll as well as the annual accounts. Presumably it is appropriate for the CEO to liaise directly with the Accountant on the management of the payroll as part5 of their day-to-day running of the organisation- e.g. filing charity payslips and liaising with the accountant on the numbers, and managing the bank account payments as long as it is according to the salary we have set?

bumping

Are you asking if it's ok for the CEO to effectively sign off their own payroll each month? The short answer would be yes but for example in the charity I'm involved in any significant paid overtime for the CEO would be signed off by the Chair. The Board also regularly see a financial report so keep an eye in that way too. Does that answer your question?

Thanks for your reply. Yes that's essentially my question. The CC are rightly strict about the due diligence surrounding the financial systems etc but there's no mention of the CEO managing the bank account / making such transactions on a daily basis. They mention that cheques require two signatures but who uses cheques these days!

If you're setting up a new charity your financial controls in the constitution should take account of modern banking practices so like you say the 2 signatures on a cheque is fairly irrelevant. You can/should also have policies in place with additional financial controls eg setting out how regularly the treasurer sees bank statements etc. As policies can easily be reviewed later on I would start with more stringent requirements and then decide later if it's ok to relax them.