The Charity Commission has concluded that there was no evidence of misuse of funds at the Hindu charity Sivayogam, which was prohibited from making any payments of more than £500 without the commission’s consent for more than two years while an inquiry into its activities took place.
But in its report on its investigation of the charity, published yesterday, the commission says it lacked adequate due diligence and monitoring procedures to protect grants it made to overseas organisations from being abused, and created an unnecessary risk by leaving high sums of cash on charity premises.
The commission launched the investigation into Sivayogam in March 2007 after receiving a complaint that grants made by the charity to organisations based in Sri Lanka had been given to the terrorist group the Tamil Tigers.
The investigation looked at a number of other concerns, including allegations that the charity did not have adequate monitoring procedures to prevent its funds from being misused and that trustees kept unacceptably large sums of cash on charity premises.
It also examined claims that interest-free loans from trustees and devotees of the charity were not properly managed and that one of its trustees, Nagendram Seevaratnam, was not suitable for the post because he had been a senior member of the Tamil Tigers before 1991.
From the opening of the inquiry in March 2007 until June 2009, the charity was not permitted to make any payments to international projects, any payments worth more than £500 or any transactions approved by Seevaratnam, without the commission’s consent. During this period, the charity’s trustees made more than 400 applications for approval to make payments.
In its report, the commission says the charity lacked adequate due diligence and monitoring procedures to protect grants it made to overseas organisations from being abused, and created an unnecessary risk by leaving high sums of cash on charity premises. But it says there was no evidence that the charity’s funds were abused.
The commission removed Seevaratnam as a trustee of the charity in March 2008 but he was reinstated after the charity tribunal quashed the commission’s order in October 2009. Seevaratnam has since resigned from the charity because his 15-year term as a trustee has expired.