The Charity Commission opened 13 investigations into charities with similarities to the tax avoidance vehicle the Cup Trust, according to Tackling Abuse and Mismanagement, its report on its regulatory casework for the year to March 2013.
"Following concerns raised about the case of the Cup Trust, we searched the register for charities whose accounts had characteristics similar to those present in the Cup Trust’s accounts – namely, low charitable expenditure as a proportion of total income; a high cost of generating voluntary income as a percentage of the voluntary income generated; a corporate trustee registered outside the UK; and an income of more than £500,000," the regulator says in the report.
It reviewed the accounts of 190 charities, identified 17 charities to look into further and opened 13 cases, of which three have been closed.
The Cup Trust raised £176m in donations, claimed £46m in tax relief, but spent just £55,000 on charitable activities over two years. The regulator has been heavily criticised for failing to take firm action against the charity and for being slow to recognise the seriousness of the case by MPs and the National Audit Office.
The report shows that the total number of cases the commission opened exceeded the number it closed during the year.
Over the year, it opened 15 statutory inquiries into serious misconduct or mismanagement and closed five. In total, 37 cases were ongoing. In addition, it opened 1,513 operational compliance cases – a less serious form of investigation – and completed 1,232.
The report says that fraud, financial abuse and financial mismanagement featured in nearly 80 per cent of all statutory inquiries and operational compliance cases completed during the year, and in 23 of the 29 investigations carried out by its investigations and enforcement function, which deals with its most serious cases.
In previous years, the commission has published casework data under the name Back on Track. The figures published this year show a slight fall in the number of serious incidents reported, from 1,027 in last year’s report, to 971 this year.
Sam Younger, chief executive of the commission, said the commission was getting tougher on non-compliance and abuse.
"By taking a tougher approach to non-compliance in charities and using our powers more frequently in cases which are the most serious, we can protect charity funds at risk and ensure we are better able to identify and deal with individuals who negligently or deliberately abuse charities," he said. "Those serious cases must be a top priority for us as regulator, as they are most damaging to the public trust and confidence on which all charities rely."