Charity Commission uses powers to ban a person from trusteeship

In a statutory inquiry report, the regulator says there was serious misconduct and mismanagement at the Catalyst Trust, which could not account for spending of £60,000

Charity Commission
Charity Commission

The Charity Commission has banned someone from being a charity trustee after the charity they ran incurred unexplained spending of £60,000.

The regulator says in a statutory inquiry report published today that it found serious misconduct and mismanagement at the Catalyst Trust, which was registered with the commission in 2008 with objects of making grants or loans to other charities or to fund building projects that are likely to create employment opportunities.

The commission started looking into the charity in 2013 after receiving a complaint that it was directing rental payments from a property belonging to the charity to a third party.

This led to the commission identifying further regulatory concerns about the management and administration of the charity and potential risks to its property.

The regulator found that the charity was being run and managed by one of its three trustees and the other two board members had little involvement.

The inquiry found the charity had an income of about £71,000 between 2009 and 2013 and incurred about £60,000 of unexplained spending.

"The charity’s income, which included loans from individuals and companies connected to the principal trustee, was predominantly applied in furtherance of a non-charitable software project which involved a number of different companies which were also connected to the principal trustee," the report says.

The software project involved companies connected to the principal trustee, the regulator found. The inquiry established that the vast majority of the charity’s expenditure from 2009 to 2013 was not spent in furtherance of the charity’s objects, according to the report.

"An analysis of the charity’s accounts for this period showed direct charitable expenditure of £2,217 out of a total income of approximately £71k.

"However, the inquiry established that a significant proportion of this, £2,050, was provided to a private company. The inquiry found that this payment was not in furtherance of the charity’s objects and that the charity was not being operated for charitable purposes for the public benefit."

The regulator concluded that the principal trustee was primarily responsible for the misconduct and mismanagement it had identified and made a removal order in March 2016, disqualifying this person from acting as a charity trustee.

The remaining trustees subsequently decided in November to wind up the charity, and its remaining assets were transferred to a charity with similar purposes.

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