The Charity Commission has launched a statutory inquiry into a Welsh community regeneration charity after £90,000 of the charity’s funds went missing following a theft.
NSA Afan, based in Port Talbot, south Wales, contacted the regulator in May 2016 to report a theft at the charity, "with £90,000 of the charity’s funds unaccounted for", according to the commission.
The charity, which provides community learning and employability schemes in Neath and Port Talbot, had an income of £1.5m and spending of £1.6m in the year to 31 March 2016.
After the serious incident report was submitted, the commission opened a monitoring case to oversee the charity’s response.
In a statement published today, the commission said the monitoring case had prompted "serious concerns about the charity’s governance and internal controls and the apparent failure of the trustees to remedy these issues, placing the charity’s property and its operations at risk".
Because of these concerns, the commission opened a statutory inquiry in February this year.
The inquiry will examine the charity’s financial controls, its management and application of charitable funds and assets, its governance and whether the charity’s decision-making processes are adequate, especially for handling conflicts of interest.
It will also examine whether the trustees have acted prudently and exercised reasonable care in respect of the day-to-day running of the charity, according to the commission.
In January, the Welsh government suspended funding to the charity amid allegations of the misuse of public funds.
NSA Afan was due to receive £526,800 in grant funding to deliver the Welsh government’s Communities First programme in Sandfields and Aberavon up to 31 March, but was told on 12 December the funding had been suspended with effect from 1 December, leaving the charity concerned about its future viability.
Ian Isaac, chief executive of NSA Afan, told Third Sector that 12 members of its staff had now been transferred to the local authority because the charity was unable to continue running some of its services without the funding. He said it had been able to continue providing other services out of its own income.
Today the commission said it had been liaising closely with the Welsh government, which it said also had concerns about the governance of the charity.
Isaac described the commission’s concerns about the charity’s governance as "sweeping allegations without evidence", but said the charity was cooperating fully with the inquiry.
In January, South Wales Police said a 35-year-old woman from the Port Talbot area was arrested on suspicion of theft on 11 August 2016 after a complaint was made by NSA Afan, and had been bailed while the police investigation continued.
Today a police spokesman said: "South Wales Police is continuing to investigate and it would be inappropriate to comment any further at this stage."