A trustee of the Northampton-based children’s cancer charity the NC TLC Trust was paid a salary for acting as chief executive even though this was prohibited in the charity’s governing document, according to the Charity Commission.
A report on the regulator’s operational compliance case, published today, says it opened the case after a staff member and a volunteer complained that one of the charity’s founding trustees was using its funds for personal benefit.
The NC TLC Trust’s objects include supporting children with cancer and their families. It had an income of £85,000 in 2013.
According to the commission’s report, it found that there were only two trustees at the charity and they were husband and wife. The report says this was despite them having being advised, when they applied to register their charitable company, that they would not be able to manage conflicts of interest if they did not appoint more trustees.
The report says one of the founder trustees was discovered to be claiming a salary for acting as chief executive, even though the charity’s governing document prohibited trustees from benefiting in this way. The commission found that there was no record of the charity seeking consent to remove the prohibition of trustees taking salaries, and there had not been an open and fair competition for the chief executive role.
Responding to the report, Kevin Smith, chairman of NC TLC, said his wife, Janet Walker-Smith, resigned as a trustee in June 2013 and did not start taking a salary for the chief executive role until October that year. She stopped taking a salary in January 2014 and became a volunteer, he said, and the money was now being paid back to the charity.
The report says there were concerns about the charity’s governance and financial controls. Cash collected in boxes was not counted and recorded properly, it says, and there were no controls on the claiming of expenses or on managing conflicts of interests. "We were concerned that the trustees were not aware of the charity’s governing document or their duties as trustees," says the report.
The report says the charity initially appeared to cooperate with the commission; two new trustees were appointed and one of the original trustees resigned. But subsequently one of the new trustees also resigned, alleging that the trustee who had resigned before him was continuing to make decisions.
The commission responded by drawing up an action plan for the trustees with deadlines by which governance improvements needed to be made. But the charity failed to meet two deadlines, so the commission re-issued the action plan. "This was not complied with and the commission was left with no evidence that the charity would be administered correctly," says the report.
The commission closed the case after the trustees said they were actively recruiting new trustees and complying with the original action plan. They have been told they have until August to do this and that the commission will continue to monitor the situation during this period.
Smith said in a statement: "We were initially very concerned that the report was to be published, but fundamentally the allegations have been disproved and what remains are improvements that we can make to help our charity be more efficient in its operations. It’s important for us to assure the many people who support us that we have continued to support the families who rely on us throughout the Charity Commission operation and we have used funds donated to us in a responsible way."
The charity said that it had appointed three new trustees and they were confident that the action plan would be concluded within the agreed deadline.