The Charity Commission has suspended an investigation into the respite care charity Tertia Trust after three local councillors stepped in to run it as trustees.
The charity, based on a 6.8-acre site in Grimsby, north-east Lincolnshire, comprises holiday bungalows, dining facilities and grounds, which have been used to provide holidays for disabled and disadvantaged children since it opened in 1987. But the buildings and grounds fell into disrepair and last year it was unable to host any young people because of its dilapidated state.
The Charity Commission wrote to trustees in November and said it was opening an investigation into the financial controls and lack of charitable activity at Tertia Trust.
Shortly after the letter was received, all three of its trustees resigned from the charity and were replaced by three councillors from North East Lincolnshire Council.
One of these, the council's leader Chris Shaw, told Third Sector he and his colleagues had since secured local authority funding of £65,000 to help bring the site back into use. But he said that so far they were prevented from using the money because the ex-trustees were blocking access to the charity’s bank account.
"It was obvious when we took over that the site had had no investment for a number of years and it is now in a parlous state," said Shaw. "We’re trying to get the buildings sorted out but the ex-trustees seem loath to hand over the bank account."
The money is being held by the council until the issue can be resolved.
Another issue that Shaw said he wanted resolved is the eviction of the former chairman, Kerry Wright, who, according to Shaw, is living on the site in a caravan.
Shaw said that when he and his fellow trustees stepped in, the charity had no money and outstanding bills of £2,000, which he and his colleagues have paid for themselves.
He said the site needed investment "in excess of £80,000" to bring it back into use, which will come from the local authority grant, with the shortfall to be paid by the site’s landlord.
The trustees hope to bring part of the site back into use by June, with the remainder taking around two years.
They said they will make it sustainable by asking local authorities from the surrounding area to pay for its use as a respite care holiday facility.
The Charity Commission said it wrote to the Tertia Trust in November, requesting financial records from the charity.
"We were advised that several trustees had resigned and the new trustees responded positively to our challenges and our request for information," a spokeswoman for the regulator said. "They were also able to inform the commission of the steps they were taking to improve the governance and financial management of the charity. We are satisfied there is no basis for the commission to take further action at this time but we will be monitoring the charity."
Shaw said he had received a letter from the Charity Commission on Monday morning, advising him that the regulator was suspending its investigation.The ex-trustees could not be reached for comment on Monday morning.