The historic scientific organisation, which runs a popular annual Christmas lecture series, used £3,202,748 in breach of the terms on which the funds were held.
The institution decided in 2006 to carry out a £22m redevelopment of its buildings. The project overran by five months and faced a funding shortfall because of the charity’s failure to meet fundraising targets.
In December 2008, the charity’s accountants told the commission that the organisation had used some money to meet additional project costs in breach of the terms on which the funds were held. The charity had not sought the commission’s authorisation to spend the funds in this way.
The report notes that the charity’s trustee body agreed a repayment schedule to reinstate the misapplied funds, and says the regulator does not intend to take further action on the basis that the charity is taking steps to ensure more robust financial controls are put in place.
The report says the charity had also failed to manage a conflict of interest that arose when it rented office space in its premises to a company managed by a member of the charity’s trustee body.
A spokeswoman for the Royal Institution said the management and trustees had worked hard over the past two years, with the commission’s assistance, to address and resolve the issues in the report.
The charity had already put in place a "comprehensive set of conflict-of-interest procedures and policies" and taken measures to ensure "strong and sustainable governance" over all its operations, she added.