The Charity Commission is looking into claims that a London poverty-relief charity spent £45,000 on legal fees arising from staff grievances, data protection issues and the unlawful suspension of a trustee.
A spokeswoman for the commission confirmed that the regulator was seeking more information about allegations relating to financial governance at the Uxbridge United Welfare Trusts, which runs almshouses and makes grants in the London borough of Hillingdon.
The charity, which was founded early in the 17th century, had an income of £530,000 in 2008 and spent £365,000. Its most recent accounts, available on the commission's website, show that in 2007 it had reserves of nearly £2m.
A source close to the charity told Third Sector the complaints had been made against a backdrop of tensions in the charity, including at board level. The source said the root of the problem was the suspension by the board of one of its trustees in 2007. After receiving complaints, the commission wrote to tell the trustees they had gone beyond their powers. It advised them to seek mediation to resolve their conflicts.
The source said trustees used £45,000 of charity funds on legal advice relating to this and other grievances, including a breach of the Data Protection Act when medical information about a trustee was distributed to all of the charity's staff. The decision to seek legal advice was made without reference to the board, according to the source.
The charity's 2007 accounts show that it spent nearly £10,000 on "legal and professional fees", out of a total of £60,000 spent on administration and staff costs.
Other allegations the commission is examining include one that the charity provided holidays and outings for its staff and trustees and their friends and families, according to the source.
The source said the complaints indicated a charity "where conflicts of interest are not properly managed, where important decisions are made outside meetings and where trustee meetings are dominated by the chair".
The source said many board members were pensioners, unaware of modern legal requirements. The charity's website says one of the 11 trustees, Lewis Pond, was appointed in 1953. Four are appointed by Hillingdon Council.
Repeated requests for comment were not answered by the charity.