CFG opposes the proposal in the new Sorp that charities ought to be required to disclose the job title and salary of the highest earner within their accounts.

The umbrella body has published its response to the consultation on the draft Sorp today, and broadly welcomes the new modular format, describing it as easier to use than the current model.  However, it has recommended changes to the proposals on legacies, performance reporting and salary disclosures.

CFG wants to maintain the option to apply the FRSSE (Financial Reporting Standard for Smaller Entities) and to cover it in the new Sorp. To remove this option would present unnecessary burden to small charities likely to follow the FRSSE for the time being, it said.

It also criticised the guidance on performance reporting as “far too complex and prescriptive” and has suggested alternative wording to make it simpler.

And it has recommended that larger charities be encouraged to explain their remuneration policy in their trustees’ annual report but disagreed with the idea to require charities to disclose the job title and pay of the highest-paid employee.

It said the current approach, where charities list the numbers of staff earning over £60,000 within £10,000 bands, is much more useful. Rui Domingues, chair of CFG’s technical accounting forum and director of finance and ICT at Friends of the Elderly, said: “Ideas included disclosing the job title and salary for the highest earner in the charity, something many do already. It’s important that charities are transparent on expenditure but it is critical that such disclosure are not put in place as a kneejerk reaction and are researched so as to ensure genuine improvement in decision-making and transparency.

“We have suggested strengthening current requirements to disclose the numbers of staff within income bands, and explaining of the remuneration policy in the annual report in order to improve understanding of staff costs.”

CFG also recommends reducing the explanation provided on mixed-motive investments, and that the Sorp should refer only to normal investment and programme-related investment (PRI), with the social investment module focusing on the treatment of PRI.

And it rejects the proposals to require grantmakers to list all grants made in the notes to the accounts.

The Sorp consultation closes today.