Care charity loaned £170,000 to a director, who was allowed to write cheques to himself

Charity Commission investigation finds that Broad View Care let its director of nursing care live rent-free in its property

Charity Commission
Charity Commission

The charity Broad View Care loaned more than £173,000 to one of its directors, allowed him to write charity cheques to himself and let him live rent-free in one of its properties, an investigation by the Charity Commission has found.

The charity ran five care homes and a daycare facility in Coventry, but in 2007 ceased all of these operations. In September 2010, the charity opened a holiday home in Devon, which provides breaks for people with mental illness and learning difficulties.

The regulator began an investigation into the charity in November 2007 when following up progress made in a previous inquiry.

The report of the latest inquiry says that between February 2007 and January 2008 the charity spent about £100,000, but no direct charitable activity took place.

It says that once the charity decided to relocate to Devon, its director of nursing care, who is no longer employed by the charity and is not named in the report, moved to the county. The charity gave him a loan of £173,936.47 with which he bought a property in Devon, it says.

The report says the charity also allowed him to live rent-free in one of its properties while he arranged the move, paid his relocation costs and gave him £550 a month towards his housing costs from August 2007 to April 2008, when he moved to temporary accommodation in Devon. During this period the charity had not set up any charitable activity in Devon, the report says.

The charity, says the report, allowed the director of nursing care to hold the charity’s paying-in books, cheque books and bank cards, and to be a signatory to the charity’s account even after his employment with the charity ended in April 2008. He was also allowed to sign charity cheques to himself, it says.

The charity’s funds were also used to buy a car for Philip Orton, who was its director of finance at the time, according to the regulator.

Orton told Third Sector that the car, worth about £10,000, had been bought because the charity owed him money in unpaid wages.

Asked why the charity had decided to move to Devon, he said: "From our perceptions and contacts there, this was an area of the country where there was the potential for developing services."

Orton said he was no longer employed by the charity but was planning to move to Devon. "It’s a part of the country that I would like to live in," he said. "I’m aware that people might think that because Devon is such a beautiful place, our primary motivation for moving the charity might be because we wanted to live there. But that was never the case." 

Asked about the £173,000 loan, he said: "It was clear that the money was going to be repaid with interest. The trustees thought this was in the best interests of the charity. However, with hindsight, they accept that they were wrong to make the loan."

Orton said the sum represented "a large proportion" of the charity’s funds but had now been repaid in full, with interest.

He acknowledged that there was a potential conflict of interest because one of the charity’s trustees was the niece of the director of nursing care. "I don’t think the conflict necessarily manifested itself to the detriment of the charity, but I think the Charity Commission did," he said.

"The trustees have taken the Charity Commission’s concerns on board. From now on they are going to make sure they don’t repeat some of the decisions that they shouldn’t have made."

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