Military charity 'reconstructed' after regulator's inquiry and police investigation

The Veterans Charity was the subject of a Charity Commission statutory inquiry into its fundraising practices and financial controls

A military charity has been reconstructed after a Charity Commission inquiry and a police investigation into concerns about the charity’s fundraising practices and financial controls, the regulator has said.

The Veterans Charity became the subject of a statutory inquiry in April 2015 after people connected to the charity, including its chief executive, were arrested by British Transport Police.

A court case involving the charity’s chief executive ended in April 2018 because of a lack of evidence, and no evidence of misappropriation was found by the commission’s inquiry, according to a report released by the regulator yesterday.

The commission’s inquiry was predated by a regulatory compliance case, which was opened in October 2014, on the charity’s governance, fundraising activities, trustee remuneration and the use of funds "for purposes which were not permitted by the governing document".

The commission said this led to it uncovering serious weaknesses in the charity’s governance and management after it was discovered that there were no written policies and procedures in place, including any about financial controls or fundraising activities.

A financial controls policy was introduced by the charity in January 2015, the commission said.

In February 2015, the police told the commission that the trustee responsible for the charity’s fundraising activities had been arrested, along with the chief executive and two volunteer fundraisers.

The arrests were made in connection with concerns about fundraising activity, the commission’s report said, which included collectors operating alone, a failure to maintain accurate records, public fundraising collections using unsealed and un-numbered buckets and the banking of collected funds into the personal account of the trustee, with a cheque then issued to the charity.

This led to the statutory inquiry, which focused on the administration, governance and management of the charity by its trustees and whether charity funds had been misappropriated or misapplied.

The charity’s bank account was also frozen until February 2016, the commission said.

The inquiry concluded that there was mismanagement of the charity and the charity was restructured with the help of two volunteers – a charity lawyer and a director of another military charity – as an alternative to employing an interim manager, the report said.

Two new trustees were appointed, including a new chair of the charity.

The trustee investigated by the police resigned, the commission said, but later rejoined the charity after the commission decided the original trustees’ involvement in the charity was appropriate.

The inquiry’s findings were delayed due to the police investigation and the later criminal trial involving the charity’s chief executive, the commission said.

The commission’s report said that the trial’s outcome "provided the trustees with the necessary assurance that it is appropriate for the chief executive to continue his role at the charity".

Other issues were also addressed, such as amending the charity’s governing document, new fundraising and governance policies and the removal of the chief executive’s name as a signatory to the charity’s bank account.

A review in August 2016 of the charity’s books and records found "significant improvement", the commission said.

In a statement, Vaughan Kent-Payne, chair of the Veterans Charity, said the commission had inspected the new procedures at the charity in August 2016 and "found them to be entirely satisfactory".

He said that there had been no further regulatory contact since 2016.

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