Managing Risks & Dealing with a Crisis

Managing Risks & Dealing with a Crisis

  • Are you running out of money to pay staff?
  • Do you know furlough is coming to an end and the September will be the last?
  • Do you know that you could be personally responsible for these liabilities?

Staff Salaries

As has always been the case, boards or committees need to plan well in advance and understand how they are paying staff salaries.  Know your salary costs, frequency of payments and if you are a GCVS Payroll customer ensure that there are sufficient funds in your account for the payroll to run.

Running Out of Money or Other Crisis

If you suspect that your organisation is running out of money, do not ignore this, but act now. However difficult it might be, it is essential that if you suspect the organisation may be insolvent, you must not continue operations. There are important steps to take:

  1. For GCVS payroll clients, keep in touch with the GCVS payroll team, letting them know what is going on
  2. The board should assess the position of the organisation.  We have a GCVS Assessment and Next Steps template which can help
  3. The board should consider any potential HR implications, eg payments for any potential notice periods, redundancies, holidays not taken etc. These are likely to be among the organisation’s largest liabilities, especially with long term staff, so if you are not sure how to calculate these, seek guidance:
    1. If you have an HR advisor, contact them to discuss any necessary actions
    2. Use this government guide for calculation of statutory redundancy payments and contact GCVS to discuss with our People & Safety Services Manager Natasha Gordon
  4. Make sure you know your group or organisation’s legal structure and consult your governing document regarding crisis, disposal of assets, closure etc should these be necessary. Note that being a charity is not a legal structure.  It is important to know your legal structure, because it impacts what happens if you should need to close, eg there are OSCR processes for SCIOs and charities.

Unincorporated Groups or Organisations

Most importantly if your group is unincorporated then there is no separate legal structure and the board or committee members become personally liable for any debts or liabilities the group has.  We would only advise groups to consider being unincorporated if they do not plan to rent or lease property, employ staff, or enter into contracts. Under these circumstances we highly recommend that groups consider converting to one of many other legal structures available.  If you are an unincorporated group or organisation who is employing long term staff, the board or committee are putting themselves at financial risk.  Further explanation is on our webpage.  GCVS Sector Development Officer can provide guidance on incorporation.

Job Retention Scheme

Many organisations in Glasgow’s voluntary sector have used the Job Retention Scheme (JRS – furlough), but this is planned to finish at the end of September 2021 and it is vitally important that boards and committees are prepared for what happens next.

It is important that organisations do not overclaim on the JRS and if they have, this must be repaid to HMRC. Our GCVS People & Safety Services Manager Natasha Gordon has prepared a brief for guidance and please note that September will be the last JRS claim so it is important that this is correct.

Act Now if you have Concerns

GCVS is here to help as much as we can, so please get in touch by emailing the following if you have concerns:

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