The Charity Commission has opened a statutory inquiry into a charity that provides vocational education after the regulator uncovered an accounting discrepancy of about £1m.
The regulator said that in July 2013 it opened an operational compliance case into the Birmingham-based Bietec Learning and Development Training Centre, which has the object of advancing the education of the public, in particular by the provision of vocational education. The regulator's move comes after an Ofsted inspection of educational activities linked to the charity.
The commission said it used its powers to obtain copies of the charity’s bank accounts, which showed it had an income of more than £1.1m over the financial years ending 2009 to 2013 – but the charity’s annual returns reported income of only £162,000 over the same period.
The regulator said it had also identified "close links and transactions between the charity and a commercial company, connected to the charity’s trustees, which raised concerns about the independence of the charity and whether conflicts of interest had been managed properly".
The commission said the statutory inquiry, which was opened on 8 July, had been made public only now because it had had to examine financial records before informing the trustees that an inquiry had been opened.
It said the inquiry would look at the administration and financial management of the charity by trustees, whether the charity was being used for private benefit and transactions between the charity and the commercial company, including whether conflicts of interest had been properly managed.
Third Sector reported in June that an appeal by Bietec trustee Ruby Bano Khan had been struck out after she failed to respond to the tribunal.
Khan, one of three trustees of the charity, according to its entry on the Charity Commission’s online register, filed an appeal with the tribunal on 25 February but did not take part in a telephone hearing on 22 May. The appeal was struck out on 9 June.
"The tribunal considers that the appellant has failed to cooperate with the tribunal to such an extent that the tribunal cannot deal with these proceedings fairly and justly," the tribunal ruling said.
The charity has filed either its accounts or annual return late in each of the past five years. Its annual return for 2009 was filed 630 days after the deadline.