Keep Scotland Beautiful has been criticised by the Office of the Scottish Charity Regulator after the wife of its chief executive was given a senior job at the environmental charity that was not advertised externally.
The OSCR told the charity that its process for appointing Derek Robertson’s wife, Catherine Gee, on a temporary contract was not "seen to be fair and above board".
Gee was appointed head of corporate services at the charity in January 2012 and had previously worked for the charity on a fixed-term contract as change manager from September 2011 until she was appointed to the new role.
But the corporate services position was not advertised externally and Gee was the only applicant.
In response to a complaint, the OSCR said that although it found no evidence of misconduct, it did identify a number of failings in Gee’s appointment.
"We consider that restricting the recruitment process to internal candidates only could be considered to be a failure in that process, given the personal relationship that exists between the chief executive and the sole applicant for the post," the regulator said.
"It is clear that, with the benefit of hindsight, the charity could have conducted a more open and transparent exercise regarding the recruitment of both senior management posts but, in particular, the recruitment of the head of corporate service.
"From an external point of view, the process was not seen to be fair and above board, as the press attention to the issue made abundantly clear with accusations of cronyism and nepotism," said the OSCR.
In March 2011, Robertson was hired as chief executive at the charity, which employs about 50 staff and had an annual income of £10.4m in 2012.
John Wilson MSP, a critic of the original appointment, said the regulator had recognised the public perception that the appointment of Gee was flawed.
"I still regard the way in which this appointment took place as meeting the criteria defined as nepotism," he told Third Sector.
In a statement, John Frater, the charity's company secretary, said the OSCR had informed Keep Scotland Beautiful that there was no evidence that the charity had acted outside of the law.
"The OSCR also made some recommendations for the future, which KSB has welcomed and is actioning," he said.