A local authority is to review its system of payments to the voluntary sector after a charity it funded was found to be making unauthorised payments to staff.
Harrow Council in north-west London suspended funding to the Harrow Association of Voluntary Services after it emerged that its former chief executive, Julia Smith, received £30,000 in bonuses and payments not approved by trustees.
The scandal, which was the subject of an investigation by the auditors PwC, has prompted the council’s overview and scrutiny committee to consider ways of improving its funding arrangements with the sector as a whole.
A review group will make recommendations about the mechanisms the council has in place to monitor the use of public funds within voluntary organisations "to ensure there is sufficient transparency, probity, organisational accountability and quality assurance".
The review will also consider the council’s role in ensuring the charities it funds have good governance and the extent to which the council should help the voluntary sector access governance support.
The review should be completed by Christmas and a report published on 27 January.
A council spokesman said the investigation into the Harrow Association of Voluntary Services, which has a new interim chief executive and new board members, had prompted it to "look at how we fund the voluntary sector" and to make sure voluntary organisations "have correct systems in place".
Richard Coe, interim chief executive of the Harrow Association of Voluntary Services, said it would offer its full cooperation to the review.
He said his organisation had set up a new finance subcommittee to oversee finance.