Charity Commission criticises African Aids Action over personal expenses

Charity's trustee hits back after regulator finds funds were used to buy clothing and a trip on the London Eye

The Charity Commission has criticised African Aids Action for using charitable funds to pay a string of personal expenses, including more than £800 on clothing and a trip on the London Eye.

The regulator today published the result of its long-running inquiry into the charity, which was set up to build a pharmaceutical plant in Africa to produce cheap Aids drugs.

The inquiry opened in August 2008 following a complaint alleging that money raised by the charity had been used for the benefit of the family of Eyob Ghebre-Sellassie, the organisation’s chair and founder.

It found that in July 2008, money from the charity’s account was used by the chair to buy clothing, with payments on a debit card of £817.97 and £57.

Bank statements for the charity showed that funds had been used for a number of other expenses, including £29.99 at The Perfume Shop and £16.98 at Sports World. The charity’s money was also spent at McDonald’s restaurants, the Odeon cinema chain and the London Eye, it says.

The trustees explained that the clothing bill was for two suits that Ghebre-Sellassie would wear in a TV documentary.

"The purchase of suits for a trustee, even for use on charity business, is not a proper expense for a charity to pay," the report says.

Ghebre-Sellassie said none of his expenses were personal and said that every company has expenses.

The inquiry states it was told that some payments were made for food, clothing and other benefits for people living with HIV, but trustees could not produce any evidence.

The report states that it understands AAA is a small charity and "dependent on the goodwill and personal contributions of the individuals acting as trustees".

The inquiry also found a number of inaccuracies in various annual accounts that were filed with the commission, including inconsistencies with the income reflected in the charity’s bank statements and those that were filed with the commission.

Both the report and Ghebre-Sellassie said the charity’s accountant disagreed with the commission on a number of points about the revised accounts that the charity was asked to produce.

The inquiry also found that until August 2009, Ghebre-Sellassie was the only trustee whose appointment was registered at Companies House.

The charity’s governing document requires there be a minimum of two trustees, a requirement that the charity met during the inquiry. 

The report sets out steps for trustees to follow to ensure they are complying with legal duties, such as ensuring all financial records are kept in good order.

Ghebre-Sellassie told Third Sector he would not need to follow the plan because the charity already did all the things it set out.

He said he would sue the commission for "deliberate negligence, defamation, discrimination, blackmail and mental torture".

"The fact that so much taxpayers’ money has been wasted on investigating such a small charity is a complete joke," he said.

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