A charity that runs a mosque and education centre in West Yorkshire has been criticised for its governance and financial controls after a Charity Commission inquiry.
The Al-Hassan Education Centre, based in Leeds, was originally investigated by the Charity Commission after it failed to submit its accounts for the year to 31 March 2014 by the deadline of 31 January 2015, which was the third time in three years the charity had failed to submit its accounts on time.
A statutory inquiry was opened by the commission on 25 February 2015. The charity’s trustees were asked to resubmit the annual report and accounts for 2012 and 2013 because they "lacked details" and did not meet Statement of Recommended Practice requirements.
The report says the trustees failed to resubmit the redrafted accounts before the commission’s deadline, which the charity said was because the charity’s accountant was unable to compile its accounts on time.
Further redrafts of the charity’s accounts were still deemed inadequate, the inquiry report says.
The commission also found a significant amount of cash being transferred into and out of the charity’s bank account, which prompted concerns about the financial management of the charity.
The inquiry also identified wider governance issues, including a failure to hold an annual general meeting since July 2013, a lack of policies for loans and money laundering, failure to hold two trustee meetings a year and a failure to review policies, such as its counter-terrorism policy.
The inquiry report says: "The inquiry considered that the trustees had placed charitable funds at risk by not being able to properly account for funds received and expended by the charity and, as a result, the trustees had failed in their duty to protect their charity’s assets.
"The inquiry was also not satisfied that the trustees had acted in the best interests of their charity by not only putting the charity’s funds at risk, but due to the weaknesses in the charity’s internal controls and governance."
The charity has been ordered to address its governance deficiencies by 30 June and resubmit the four sets of accounts for between 2011/12 and 2014/15, the inquiry report says.
Carl Mehta, head of investigations and enforcement operations at the Charity Commission, said: "The trustees in this case failed to take basic steps to ensure that the charity’s funds were able to be accounted for. This is simply not acceptable and I expect the trustees to take measures to speedily correct this.
"For many faith groups, collecting funds in cash is likely to be a regular occurrence as part of worship or devotion. Charities must ensure that they have in place effective and proper financial controls to ensure those funds are safeguarded."
The charity did not respond to a request for comment.