The Christian charity Brotherhood of the Cross and Star was blocked by its bank from using its account because of a dispute about who its trustees were, according to a report by the Charity Commission.
The report, published today, says the charity failed to pay a £385,000 debt to Liverpool City Council because it could not access the account.
The charity’s objects are to advance Christianity by training "ministers of religion, Christian teachers, missionaries, evangelists and other Christian workers" and to relieve poverty. It had an income of £153,715 and expenditure of £260,698 in 2010/11, according to figures on the commission’s website.
The regulator’s report says Liverpool City Council sought to wind the charity up in 2008 because of the unpaid debt, which was owed for repairs to one of its places of worship. The bank had blocked the charity from accessing its account because it could not determine who the trustees were, the report says.
It says the Charity Commission met two groups of people, both claiming to be the charity’s trustees, and concluded that it had been operating without any validly appointed trustees.
According to the report, the charity’s accounts had not been properly prepared. It says the individuals in day-to-day control of the charity "had not met their responsibilities for many years, failing to address the upkeep of the charity’s buildings or the proper access to its funds". This caused the charity to pay more in interest to the council than it would otherwise have done, the report says.
The Charity Commission opened a statutory inquiry into the charity in January 2009 and appointed an interim manager, who took control of its accounts and paid the debt to the council.
The report says 20 trustees have now been elected to govern the charity, which has also agreed an action plan to make sure its accounts are prepared correctly.
The Brotherhood of the Cross and Star did not respond to a request by Third Sector to comment on the case.