Q: I’m taking a monthlong sabbatical soon. The church has two payroll cycles to process and a quarterly withholding to file with the IRS. I am not supposed to come into work, but no one else knows how to do these tasks. In terms of compensation information, the only individuals who know who gets paid what (besides me) are church board members. And no one on staff seems willing to cover these tasks. How can these tasks get done?
A: CPA Tim Samuel, a longtime Church Law & Tax editorial advisor, offers this advice:
I would encourage the board to revisit the assumption that payroll can only be handled by one person based on the idea of keeping compensation information confidential.
But, this is a significant internal control concern. When only one person has access to payroll, the organization becomes vulnerable to errors, fraud, and operational disruption. Every church should have at least one trained backup person or an outside professional who can step in when needed.
Confidentiality is important, but it should not prevent proper oversight and cross-training. Payroll companies, bookkeepers, accountants, finance staff, and other designated leaders routinely handle compensation information as part of their responsibilities.
For this sabbatical, I would recommend one of several practical options:
• Train a trusted staff member before the sabbatical begins.
• Delegate the responsibility to the treasurer, finance committee chair, or another authorized board member.
• Engage an outside CPA, bookkeeper, or payroll specialist for the month.
• Work with your payroll provider to identify a temporary administrator who can process payroll and submit the required filings.
• Create written procedures and a payroll calendar so another individual can follow the process while you are away.
A sabbatical often reveals where an organization has become too dependent on one individual. In this case, the church has identified an opportunity to strengthen its internal controls, reduce fraud risk, and ensure critical financial functions can continue even when a key employee is unavailable.