The Charity Commission opened a statutory inquiry into a London-based aid charity after one of its trustees was stopped while trying to leave the UK with more than £3,500 of charitable funds.
A statement from the regulator today said port officers seized the money from a trustee of Save the Needy Worldwide in July 2016 under the Proceeds of Crime Act because they were not satisfied the money was intended for legitimate purposes.
The commission has also restricted access to the bank accounts of the charity, which operates in eastern Europe, Nigeria, Pakistan, the occupied Palestinian territories and Turkey, and has purposes including poverty and disaster relief.
The regulator had previously carried out a compliance visit to the charity in July 2015 and had issued an action plan after discovering poor financial management and no evidence that the charity’s funds had been spent on its purposes, the regulator said.
Trustees were issued with an action plan to resolve the issues and the commission was due to revisit the charity next month.
But after police informed the commission of the seizure, the commission obtained the charity’s bank statements and found a high number of cash withdrawals, the statement said.
"The commission has serious concerns about these withdrawals and whether funds withdrawn can be accounted for," the statement said.
It said the regulator’s inquiry, which was opened on 13 October, would investigate the charity’s management and financial controls and whether its funds had been spent exclusively on charitable purposes.
After the money was seized, Bedfordshire Magistrates’ Court gave police permission to hold on to the funds while they investigated.
The commission said it was concerned the money could be lost to the charity if it was ordered to forfeit it.
A spokesman for the charity declined to comment.