The Charity Commission has opened a statutory inquiry into and frozen the bank account of a Yorkshire-based housing charity after discovering its annual returns did not match the amount of money passing through the account.
The commission said in a statement published today that it had received a tip-off and as a result had uncovered "serious regulatory concerns" in the financial management of the Cowesby Trust.
According to the charity’s annual return, it had an income of £2,700 and spending of £8,400 for the year to December 31 2015. But when the commission examined the charity’s bank account, it found "a disparity" between these figures and the amount that had actually flowed through the account, the statement said.
Large sums of money had also been paid to the charity’s sole trustee, listed on the commission website as Hugh Morgan-Williams, and to an unconnected company, the commission said.
The regulator said it had frozen the charity’s accounts to protect its funds, preventing the trustee from parting with the charity’s property without permission from the commission.
The regulator also found that the charity, which provides accommodation and grants to in-need residents of the parish of Cowesby in North Yorkshire, was operating in breach of its governing documents by having only one trustee.
"This gives rise to serious concerns about the legitimacy of the trustee decision-making and whether charitable property has misapplied for non-charitable purposes," the commission statement said.
The inquiry will examine the charity’s financial controls and the management and application of its funds, property and assets, as well as its governance and whether there has been any misconduct or mismanagement.
The commission said it would also investigate whether the charity’s objects were being met and if it was operating for the public benefit.
Third Sector was unable to contact Morgan-Williams for comment.