The Charity Commission has told the trustees of a Somali charity in south Wales to look into recovering expenses paid to the organisation's former chair, who was an undischarged bankrupt.
The Somali Progressive Association, whose income in 2007/08 was just over £200,000, runs a drop-in advice centre for Somalis in Cardiff. The commission opened an inquiry in September 2008 amid concerns the chair's financial status could endanger its funds. Undischarged bankrupts are disqualified by law from acting as trustees.
The inquiry, which ran until May, concluded that the organisation's other trustees had not been aware of the financial situation of their chair, who has not been named and who resigned shortly after the inquiry was opened. They also admitted they had not been aware of their obligation to make sure undischarged bankrupts did not serve on the charity's board.
The inquiry also found that the trustees had paid themselves fixed annual amounts to cover their expenses, ranging from £1,700 in 2004/05 to £2,281 in 2006/07. The commission said such fixed fees amounted to trustee payment, which was forbidden by the charity's constitution.
It also said the trustees should "take steps to consider recovery" of the expenses paid to the disqualified chair. The commission's inquiry report says the regulator will consider using its own powers to recover the funds if the trustees decide not to proceed.
The trustees have also been given six months to address a number of other failings in the charity's accounting practices, including not properly documenting income and expenditure and allowing people to sign their own salary cheques.
Before the inquiry report was submitted, the police told the commission that they were still investigating whether the chair had committed an offence by acting as a trustee while an undischarged bankrupt.