The Charity Commission has launched a statutory inquiry into a charity that was unable to explain how it had spent £70,000 of charitable funds.
In a statement made today, the commission said that in January it made a monitoring visit to the Islamic faith and poverty relief charity Peacetrail, which supports women and children who face financial hardship in the UK and abroad, after it failed to submit its annual accounts.
The regulator said the visit revealed the charity was unable to provide records of how it had spent £70,000 and identified concerns about the charity’s use of a non-charitable company’s bank account and how these funds were being spent and accounted for.
It also identified poor financial management, which the commission said was putting the charity’s property at risk, poor governance and a lack of monitoring of the charity’s partners.
As a result of the visit, the commission opened an inquiry on 31 March and has banned the charity from carrying out any transactions or payments without prior written approval.
The regulator’s statement said: "The commission considers the concerns it has identified to be so serious that it opened a statutory inquiry and directed the trustees to provide information including the charity’s activities, financial controls and an explanation as to the trustees’ continued failure to file the charity’s statutory annual returns."
According to the charity’s entry on the Charity Commission’s online register, it was registered in November 2013 but has not yet filed any accounts. It documents for the year to the end of April 2014 are more than 400 days overdue, the commission’s website shows.
The regulator’s inquiry will examine the trustees’ administration, governance and management of the charity, financial controls and management of the charity, and whether its funds have been properly spent and can be accounted for.
Its statement said: "The inquiry will also take steps as appropriate to safeguard and retrieve any funds which cannot be accounted for as applied for exclusively charitable purposes."
A spokesman for the charity said its paperwork was behind schedule because it had grown quickly.
"We are working with the Charity Commission to resolve all outstanding matters," he said. "We hope that everything will be satisfactorily resolved."