A Charity Commission inquiry has found that former trustees of a community charity committed misconduct by allowing the charity’s bank account to be used by an unrelated external project and by being unable to account for £130,000 of income.
The regulator has today published its report into the Manchester-based My Community UK, which has objects of relieving poverty, advancing education and promoting good health to people in need, in particular to those in the Muslim community.
The report says that concerns about unauthorised private benefit and failures to manage conflicts of interest at the charity were first raised with the regulator in December 2012.
After the regulator paid the charity two visits in 2013, it opened a statutory inquiry into it in February 2014.
Today’s report says that the inquiry concluded that there had been "misconduct or mismanagement in the charity on the part of the original trustees" – referring to the three trustees of the charity when it was registered in 2010, none of whom remain on its board.
In particular, one of the former trustees had allowed the charity’s bank account to be used by the Ikhlas Coalition Project, a fundraising appeal for a coalition of five charities, which My Community UK's trustees said were "unrelated to the charity’s own charitable activities".
The inquiry also looked at payments made by the charity to connected parties for computer software and support services. The report says the commission saw some evidence that this was provided, but adds that it was "difficult to assess whether the sums paid were reasonable and these provided value for money". It says the payments were made "in breach of the charity’s governing document due to conflicts of interest" and without the relevant authorisation from the commission or any evidence of these being managed.
But the report also says that the current trustees of the charity "have improved in this area".
The report adds: "The original trustees had failed to account adequately for the charity’s past income and expenditure. In particular, there was around £130,000 of income unaccounted for, for the financial year ended April 2011. The inquiry found that it was not possible, due to the lack of records, to determine how this was spent."
The report concludes: "The current trustees have taken steps to improve the governance and accountability of the charity. The commission has used its legal powers to require the current trustees to consider, take legal advice and any appropriate steps to recover funds from the former trustee."
It was not immediately possible to contact the charity for comment, although its chair said at the time the inquiry was announced that the charity would be cooperating with it and that its trustees and management welcomed "the opportunity to strengthen and improve their systems and processes".