The Charity Commission advised the Cabinet Office of its concerns about Kids Company weeks before the government department gave the charity its final payment of £3m at the end of July, according to the regulator’s director of investigations, monitoring and enforcement.
Michelle Russell told MPs during an evidence session for the Public Administration and Constitutional Affairs Committee yesterday that the commission was in almost daily contact with the Cabinet Office in July about its concerns with the now defunct children’s charity, but the government still went ahead with its £3m grant to the charity.
She said that much of the communication took the form of emails between officials.
Russell said the commission first made contact with the Cabinet Office at the start of July when it was reported in the media that Camila Batmangelidjh, then chief executive of Kids Company, would be resigning. She said that later in July it told the Cabinet Office that allegations had been made about financial mismanagement at the charity.
"In July we were in almost daily contact with the Cabinet Office as things were unfolding," Russell said. "I'm pretty sure that it was on the same day as we met three ex-employees of the organisation, who brought their concerns to us, that we flagged up to the Cabinet Office that it needed to be aware that these allegations were being made."
Correspondence published by the Cabinet Office in July showed that ministers decided to award the £3m grant to Kids Company despite warnings from senior civil servants at the department that the charity was unlikely to meet the government’s conditions for the funding.
Russell also told MPs yesterday that the Charity Commission had met Kids Company representatives in March to discuss what she referred to as the "donor issue" as well as funding issues at the charity and reports of staff leaving the organisation.
She said the commission met representatives of the charity again in June, when the regulator was told there was a plan in place and new trustees were due to start at the charity.
Chris Wormald, permanent secretary at the Department for Education, told MPs on the Public Accounts Committee on Monday that Kids Company had not been given special treatment when it was handed £46m of public money over 15 years.
The Charity Commission’s statutory inquiry into the charity, announced in August, continues.