Regulator opens fresh inquiries into five 'double defaulters'

The Charity Commission has announced the news after running an investigation into 80 charities that filed to submit accounts at least twice in the past five years

The Charity Commission revealed today that it had opened statutory inquiries into five organisations after carrying out an investigation into charities that failed to submit their annual accounts, reports or returns at least twice in the past five years.

The Moss Side and Hulme Community Development Trust in Greater Manchester, the Dorset Attention Deficit Hyperactivity Disorder Support Group, The Great Generation in London, Cymmer Workmen's Hall and Institute in Rhondda Cynon Taf and King’s Church Brentwood in Essex are all subject to action.

They are named in the regulator's statement of results of its class inquiry work into so-called "double defaulters".

Targeting charities with last-known annual incomes of more than £110,000, the commission discovered 80 double defaulters for the period between April 2017 and March 2018.

Twenty-eight submitted documents during the pre-inquiry stage; 24 were found to have ceased to exist and 28 were subject to the class inquiry.

Of those 28 involved in the class inquiry, further action is being taken against five.

The inquiry, according to the commission, discovered "there were no properly appointed trustees managing the charity" at the King's Church Brentwood and more than £50,000 of funds held in the charity’s account "were vulnerable to fraud or theft".

The commission used its legal powers to restrict use of the charity's account.

At Cymmer Workmen's Hall and Institute, the inquiry "identified issues regarding substantial levels of non-primary purpose trading that the charity had undertaken; accounts not prepared to the required standards; and there appeared to be only one active trustee operating the charity".

Three charities that supplied annual documents during the class inquiry subsequently defaulted on submitting annual accounts, the regulator said.

They were the Moss Side and Hulme Community Development Trust, the Dorset Attention Deficit/Hyperactivity Disorder Support Group and The Great Generation.

A commission spokeswoman said it had opened statutory inquiries into all five charities.

She added: "Further information, setting out the scope of these inquiries, will be published on our website in due course."

The spokeswoman said that Kings Church Brentwood was no longer operating.

"We have taken action to safeguard more than £50,000 of funds held in the charity’s account, and are currently considering the most appropriate use for these funds," she said.

The commission exercised its legal powers 39 times as part of the class inquiry to obtain bank records and financial information, and 44 times to direct trustees to complete missing annual documents, as well as restricting King's Church Brentwood's bank account.

It said its actions accounted for £25m of charitable income.

The commission’s statement of results says: "Persistent defaulting, particularly when the trustees have previously been provided with regulatory advice and guidance on their duties, is regarded by the commission as serious mismanagement and/or misconduct, which may be a symptom of broader issues in a charity."

Harvey Grenville, head of investigations and enforcement at the commission, said in a statement: "The public deserve to be able to understand how their donations are being spent and see clearly that they go towards their intended causes.

"Too many trustees are still failing to file on time or properly notify us when a charity has been wound up.

"This report should serve as a reminder to other trustees that failure to comply with these duties is regarded as mismanagement by the commission and can result in regulatory action against a charity or its trustees.

"Trustees who persistently breach this duty and are unwilling to mend their ways face the very real threat of removal or disqualification."

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