The Charity Commission has frozen the bank accounts of an educational charity after finding that most of its income was being withdrawn in cash.
Grove Mountain, which had an income of £88,360 and expenditure of £88,122 in the year to 1 April 2016, was registered with the commission in July 2015 to provide books to the Caribbean for educational purposes.
The regulator said in a statement today that it had opened a statutory inquiry into the charity after concerns about its finances were raised by a third party.
The statement said an examination of the charity’s 2015/16 accounts showed the majority of its income was withdrawn in cash and "there was a pattern of large cash withdrawals being made shortly after donations or identical amounts had been deposited".
The statement said: "This raises regulatory concerns for the commission regarding the charity’s financial controls and whether the cash withdrawals have been spent on meeting the charity’s objects."
The charity’s accounts for the year to April 2016, published on the commission’s website, mainly consist of what appears to be a bank statement listing transactions relating to the charity from May 2016.
These include a number of cash withdrawals of up to £6,000 each and "travel/meeting expense" for sums spent at retailers including Sports Direct and TK Maxx.
A note from the independent examiner that was filed with the accounts says the charity could produce account transactions only from 1 April 2016 onwards because its bank account had been closed and it had no access to the information for the correct period.
The commission said its inquiry would examine issues including whether the charity had been operating for exclusively charitable purposes and whether its funds had been properly spent.
Third Sector was unable to contact anyone from the charity for comment on Thursday morning. Its website was unreachable and neither the telephone number for the charity nor the contact email listed on the Charity Commission’s website appeared to be in operation.