The Charity Commission found serious governance and financial failings at a now defunct charity whose chair was unable to adequately account for more than £14,000 of cash withdrawals from the organisation’s bank account.
The regulator has published a report on its inquiry into Redaid, which was registered with the commission in 2005 with the object of providing aid to people around the world who have been affected by disasters.
The report says the regulator opened an inquiry into the charity in December 2011 after its trustees failed to comply with an action plan drawn up by the commission to address concerns with a lack of satisfactory financial records and a lack of charitable activity.
The charity, which was removed from the register of charities just days after the inquiry was opened, had been the subject of a regulatory compliance case that was opened in June 2009.
The report on the inquiry says the commission found "little evidence to suggest that anyone other than the chair had made decisions in relation to the governance and management of the charity".
It says the chair, who is not named in the report, was the only trustee to attend a meeting with the commission and told the regulator the other trustees had been appointed only because the charity needed three trustees to function.
The report says the chair told the inquiry that trustees did not claim expenses and were not paid. However, it says, the charity’s bank statements showed four cash withdrawals totalling £14,500 and the chair could not provide written proof of where the money had gone.
He said the money had been used to research and develop a charity loan scheme called Re-Give, but "was unable to provide invoices and gave unsatisfactory and/or confused reasons for this, explaining that the work was arranged informally and was not invoice-based", the report says.
Trustees were also unable to provide satisfactory evidence of adequate financial controls at the charity, the report says, and did not properly segregate charitable funds from other funds.
The chair told the inquiry that he had kept about £1,000 of charitable funds in a personal bank account, the report says.
The regulator found that the final accounts submitted by the charity, which had an annual income of between £7,000 and £9,500 between 2006 and 2009, showed the balance on the charity’s bank account to be zero after its remaining funds had been donated to another charity.
But the commission found the charity actually had a remaining balance of £10,535. The regulator used its powers to freeze the account to ensure that sum was correctly dealt with under charity law.
The report says the case was referred to the police, but a spokesman for the regulator said today that it followed the case up during the inquiry and was "not made aware of any police investigation".
The inquiry was closed in September 2014. Asked why it had taken the commission more than two years since the closure of the inquiry to publish its report, the commission spokesman said the regulator would not want to prejudice any potential police investigation and the case was low risk because the charity had been removed from the register.