The Charity Commission will not seek repayment of about £125,000 in unauthorised payments made to two trustees of an animal charity, after concluding that the payments were made in good faith and at market rate.
The commission today published an operational compliance report on Kent-based Tag Pet Rescue. The charity, which had an income of £193,949 in 2012/13, registered with the commission in 2005, having been formed in 1999. It operates three charity shops and an animal sanctuary on a farm, its website says.
In April, the commission received a complaint alleging that unauthorised payments were being made to its trustees. The commission found that the charity’s founders, both trustees, had received payments totalling about £125,000 between 2005 and 2012, and that two trustees had been paid as employees since 1999. The charity’s accounts for the year to 31 March 2013 show it had five staff and paid two of its trustees a total of £38,480 out of £228,000 of spending.
The charity’s governing document "prohibited trustees from receiving any remuneration from the charity but did give a power to employ one trustee", the commission’s report says. The commission concluded that these were "unauthorised payments", it says.
"Further correspondence with the charity revealed that the two trustees had set up and run the charity on a voluntary basis," the report says. "However, as the charity grew it began to require considerable time commitment, for which the founders were then paid."
The commission confirmed that the two trustees receiving the payments were not involved in the decision and concluded that the payments were made "in good faith", in particular because "the level of pay was set with consideration to the pay of comparable roles at other organisations".
In July, the commission gave the charity an action plan. By the end of August, the charity had complied. "They concluded that the payments to the trustees had benefited the charity, amended the governing document to give the trustees the power to employ two of the board and had shared with us a copy of their conflict of interest policy," the report says.
The charity had not been able to respond to a request for comment by the time Third Sector published this story.