Does being a bank account signatory make me responsible for finances of a charity ?

Charityworker

I work as the part time manager for a failing charity. It's a community cafe/charity shop/drop in centre for people with mild to moderate learning difficulties. When I started working for the charity it just had a small drop in advice centre and always made ends meet. A new committee took over 3 years ago who decided to open this big centre and since then they have never broken even. About 10 years ago someone gave the charity £100,000 in a will. There was £70,000 of that left when I started working there almost 6 years ago. Weve had the centre 3 years now and the committee have got through £50,000. We need £11,000 in the bank as "shut down costs" so basically we have roughly 10 months left before it has to close. I've tried telling them this but they are the most useless unknowledgeable committee I have ever come across in my 20 years of charity management. My knowledge and experience counts for nothing.

So basically id like to know if you know me being a bank signatory on the account makes me financially responsible along with the trustees. And as the paid employee should I be a bank signatory in the first place? I can't find a definite answer for either on the net. I asked the charity commission and they told me to look in the contitution. It doesn't mention anything about banks in our constitution. Thanks.

jobbingmusician

As I understand it, being a signatory does not carry any financial responsibility for the charity with it. The trustees, and the trustees alone, are responsible for the liabilities of the charity (to a very limited extent, if the charity is a ltd. co.)

Of course employees should be bank signatories, or the affairs of the charity would simply grind to a halt! (Or at least, they would here, if we had to bother trustees every time we wanted a small cheque signed). Ideally you should have financial regulations which state who can authorise various levels of expenditure - you might want a trustee's approval to buy a new house, but not a new stapler.....

(I'm in the same position as you, BTW, and am confident that I am not liable. You can insure yourself further by ensuring that records of what you have told trustees about the finances are in writing, and keeping a copy somewhere safe!)

toxi

Hi Charityworker

I'm the finance manager at a large international charity. With regards to being a paid employee and a bank signatory, there is no issue at all. It would be very difficult to run an organisation if you couldn't have employees as signatories!

With regards to liabilities - as suggested by the Charity Commission, this will ultimately come down to your governing document. You've mentioned a committee as well as trustees, so I'm not clear exactly what type of document you have. I have experience only with trust deeds, so can't comment on committees.

If you have a trust deed that nominates a certain number of trustees, then they have the ultimate responsibility for the management of the organisation. They will only have a problem if they are found to have mismanaged the organisation, resulting in some sort of liability though - simply running out of funding is no-one's fault necessarily, so just because a charity goes out of business does not mean anyone is to blame, or that anyone will be held responsible for anything.

Do you hold trustee meetings where you report figures to the board? If so, I would ensure that you present your findings, calculations and recommendation(s) clearly on a paper tabled at the next meeting, and ensure that any discussion regarding the continuance or cessation plan is clearly minuted. If the trustees decide to continue operating, that is their decision and they will be the ones held accountable if they've acted improperly.

Just to repeat that the above is in relation to charities that have a trust deed and a board of trustees as the governing body. Your governing document may not refer to bank signatories as such, but it will clearly state who is responsible for the overall operation. Being a bank signatory will not make you liable in or of itself - there would only be an issue if you were also a trustee (in which case you couldn't be an employee), or if you were making fraudulent transactions (but that's a whole other issue).

Hope that helps.
T

Charityworker

Thanks for your replies. That is a load off my mind.

agrinnall

So have you sorted out taking your holidays now?

Charityworker

No I'm still being told I can't have any time off. I've been allowed to book a day in December but that's in the next holiday year.

specialboy

You need to assert your rights and tell them that you are having your holiday no matter what, what have you got to lose?

Charityworker

specialboy wrote: »

You need to assert your rights and tell them that you are having your holiday no matter what, what have you got to lose?

Um, my job, quickly followed by my house!

getmore4less

The jobs gone anyway.

Find another part time job, then stop the voluntary time.

what are they going to do if they sack you?

Charityworker

I've been looking for any part time job for over a year now. But had no luck.

getmore4less

Focus on what the issue is with that.

you say the charity sector is dubious because of where you work can you volunteer for a different one that employs to get a foot in.