The Office of the Scottish Charity Regulator has criticised a Scottish NHS charity for making a £2.7m grant to its local health board, but stopped short of taking enforcement action against the charity, a report from the regulator says.
The regulator opened an inquiry into the Tayside NHS Board Endowment Fund on 4 April 2018 after media reports said it had made grants of £2.7m to NHS Tayside’s health board for IT projects the health board had already paid for.
The money has since been repaid by NHS Tayside.
The report from the OSCR, published on Friday, says that although the charity’s decision-making and governance were poor, the regulator was satisfied that the charitable assets were used only for charitable purposes.
The charity did not "sufficiently recognise its duty to consider separately and distinctly the interests of the charity" when deciding to provide the funding to the health board, the report adds.
The process by which the grant was made was also "rushed to meet the needs of a third party" and reflected poor governance practices at the charity, it says.
Independent legal advice should have been sought by the charity, the report says, and it should not have relied on in-house NHS solicitors.
According to the report, trustees for the charity did not see the legal advice before making their decision to award the money to the health board.
The report says these failings amounted to mismanagement of the charity, but the regulator decided against taking enforcement action against the trustees and the charity.
The OSCR said the Scottish government should review laws governing NHS endowment funds, and it would also make recommendations for reform to the charity.
A spokeswoman for the endowment fund said the charity accepted the OSCR’s findings and was taking steps to improve its governance.
"It is extremely important that the business of the fund is completely transparent and the public can see exactly where their donations are going," the spokeswoman said.
"All of the board of trustees’ meetings are in public and we would invite people to come along and see how donations and other funds are used."
A statement from NHS Tayside said: "The board of NHS Tayside took an early decision in 2018/19 to repay the money transferred in 2014 when the new chairman of the board took up his post in April 2018. The money has now been paid back to the fund."