The Charity Commission has concluded a monitoring case on the volunteering charity Volunteering Matters, which was opened after a media report said the charity had experienced a fall in staff numbers of a third.
The media report, published in the sector press last August, said that the charity, which was previously called Community Service Volunteers, had a significantly reduced staff and that a large pension scheme deficit had led to a reserves deficit of £5.8m.
In its case report, the commission praises the charity for its effective response to its financial troubles. It says it opened the monitoring case last October in light of the heightened public concern at the time about the viability of some household-name charities.
The report says that the defined-benefit pension scheme, which was the main factor contributing to the charity’s reserves deficit, has now been closed to new entrants and future accruals and that the trustees believe the charity has done all that it can to mitigate this risk.
The report says that the loss of a £1.2m central government grant contributed to the charity’s financial difficulties.
But after a meeting with the trustees the commission concluded that "it was clear that the trustees of the charity had taken significant positive steps over the last two years to protect the charity’s assets and to improve the charity’s financial stability".
A transformation plan was put in place to build up the charities reserves and the trustees took professional financial advice and regularly reviewed the charity’s finances, the report says.
The charity also brought its operations under a single management team, sold a number of buildings and reviewed its fixed assets.
The report concludes that the charity’s trustees "have done the right thing to react quickly to signs of financial distress and put measures in place to mitigate risks and improve the long-term financial stability of the charity".
It notes that Volunteering Matters created an income generation and business development team to obtain new funding for projects and ensure they are effectively managed, and that a finance committee will report regularly to trustees. The charity has also recruited several new trustees with strong financial backgrounds, the report says.
According to the Charity Commission website, Volunteering Matters’ accounts for the year to March 2015 showed an income of £7.1m against expenditure of almost £6.3m, with total liabilities of £12.4m.
The charity currently employs about 200 people, compared with 314 in the year to July 2014, according to its accounts. A spokeswoman for Volunteering Matters said the reduction was largely due to the closure of the charity’s learning department.
Oonagh Aitken, chief executive of Volunteering Matters, said in a statement: "Having gone through a well-documented period of transformation, we were confident in our ability to answer the areas of concern. We are happy that this report recognises the significant positive steps put in place to improve our future financial sustainability. We continue to focus on strong governance, trustee accountability and strengthening our organisation to do our work ahead."