The Charity Commission has opened a statutory inquiry into a Hartlepool residents association that lost an employment tribunal hearing earlier this year.
Manor Residents Association provides courses, advice and children’s services to benefit the residents of Owton Manor in Hartlepool.
In April, an employment tribunal ordered the charity to pay £8,800 to a former cleaner, Lynda Gooding, after it failed to pay her the minimum wage and repeatedly did not pay her on time.
But the charity did not comply with the employment tribunal’s ruling. And in August, it was unsuccessful in an attempt to suspend a bailiff order that Gooding had raised in an attempt to recover the funds.
The commission first contacted the trustees in May after the employment tribunal ruling against the charity raised regulatory issues.
In October, detectives from Cleveland Police’s economic crimes unit arrested two of the charity’s employees for conspiracy to steal and false accounting.
The inquiry, which opened on 18 October, will examine various regulatory concerns, including alleged risk to the charity’s assets, alleged mismanagement or misconduct by trustees, alleged financial mismanagement and whether the trustees have discharged their legal duties as charity trustees.
While the inquiry continues, trustees cannot make payments from the charity’s bank accounts or dispose of property without the commission’s consent.
The commission said in a statement that it had been engaging with the charity since May but trustees had been "unable to allay its concerns".
Third Sector contacted Manor Residents Association but was told that no one was available for comment.