Trustees banned after using charitable funds to go on holiday

A married couple have been disqualified from acting as trustees for seven years after the Charity Commission found they had spent charitable funds on a holiday and could not account for more than £300,000 of charitable money.

The pair, who were the only trustees of Chichester and District Dog Rescue Society, had also spent £1,456 of charity funds on a decorative log burner for the charity property they were living in rent-free, even though the property already had central heating, according to the regulator’s statutory inquiry report, published yesterday.

The regulator opened an inquiry in September 2017 after an independent examiner raised concerns about discrepancies in the bookkeeping at the charity, which rescues, looks after and rehomes stray dogs in Hampshire and West Sussex.

In October 2016, the inquiry found, one of the trustees went on holiday with family members using the charity’s funds. During the holiday money was withdrawn from the charity’s account, but neither trustee was able to explain how the money was used.

The commission found that between 11 October 2013 and 24 May 2017 £316,120 had been withdrawn, in cash, from the charity’s bank account, but there was no evidence to show what it had been used for and the trustees were unable to say.

The charity also asked for £100 or £150 rehoming donations from people who wanted to adopt dogs – but even though the charity claimed to have rehomed at least 100 dogs, there was no record of any of the money going through the charity.

The charity credit card had also been used frequently despite both trustees denying using it, the commission said.

The trustees’ mismanagement of the charity left it on the brink of closure, the commission report says, but it was saved by a substantial legacy gift during the course of the inquiry.

The two trustees, who and have not been named by the commission, and their family members lived rent-free in a property owned by the charity, which the commission said was an unauthorised benefit in breach of their trustee duties.

The commission said the fact that the only two trustees of the charity were a married couple meant "it would have been impossible to manage conflicts of interest when making some decisions", including the choice to buy the log burner with charity funds.

The trustees were both disqualified for seven years in September 2019. Although the commission's report says opening restitution proceedings against them would not be proportionate, it adds that the new trustees could try to recover the money if circumstances changed in the future.

"The commission has concluded that there had been serious mismanagement and/or misconduct in the charity’s governance, management and administration by the former trustees," the report says.

"The new chairman and current trustee board have co-operated fully with the commission and during the course of the inquiry have requested guidance and advice from the commission relating to a significant number of matters."

It said the charity was now operating effectively.

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