A Charity Commission statutory inquiry has discovered "mismanagement or misconduct" at the Wimbledon and Putney Commons Conservators, which might have lost out on £1.5m after trustees failed to follow charity law.
The commission has used its powers to direct trustees at the south London charity to establish whether it made a loss when in 2010 it sold to Wandsworth Council the rights to a strip of land, which it would use as access to the site of the former Putney Hospital. It had already told the trustees to work this out in October last year.
The charity, which maintains the 1,140 acres of common land on behalf of the public, granted rights known as an easement to the council so the latter could build an access road across Putney Common in 2010. The easement cost the council £350,000 and the deal was completed in 2014.
Under the Charities Act 2011, easements are considered under the same provisions as land sales, which means the charity was legally obliged to get a qualified surveyors’ report, which it failed to do.
Last year, three trustees who had joined the charity after the easement was granted commissioned a retrospective survey that estimated the easement was worth £1.9m, as reported by Third Sector.
The retrospective survey was disputed by other board members, and in October last year the commission gave the trustees an action plan with instructions to commission a second survey to work out if there had been a loss. The trustees have so far failed to do this.
The commission opened a statutory inquiry on 18 August and, in a statement published today, said it would investigate the administration, governance and management of the charity with specific regard to the issues arising from the granting of the easement.
In a legally binding order issued to trustees yesterday, seen by Third Sector, the commission said it was "satisfied that there is or has been misconduct or mismanagement in the administration of the charity and it is necessary or desirable to act for the purpose of protecting the property of the charity".
The direction ordered trustees to appoint and instruct a surveyor to carry out a retrospective valuation of the easement, as well as agreeing a date for the survey to be completed – 13 October.
In a statement published today, the commission said it had "serious concerns" that trustees had not yet complied with the action plan.
"The commission is also concerned that the trustees may not be able to agree a way forward due to an ongoing dispute within the trustee body and that potential conflicts of interest may impact some trustees’ decision-making," the statement said.
Three of the charity’s existing trustees were in post at the time the easement was granted.
The commission’s statement said it had further concerns there might be a continuing risk to charitable property.
As reported by Third Sector this month, the trustees have asked the law firm Charles Russell Speechlys to produce a shortlist of potential surveyors, at a cost of £26,000, according to a well-placed source. They have rejected an offer by Montagu Evans, which conducted the original, disputed survey, to re-evaluate the site, instead opting to commission new surveyors. This might cost up to £60,000, although the charity itself would not confirm these figures.
The charity did not respond to Third Sector's request for comment.