Trustee Misconduct Found by UK Charity Regulator

A four year investigation by the UK charity regulator has found serious failings in the administration and governance of a UK charity working in international emergency relief, including misconduct by the then trustees and thousands of pounds of charitable funds being misused.

The UK Charity Commission has published a report on its inquiry into Helping Hands for the Needy. The charity was registered in 2002 and predominantly ran overseas health care and emergency relief projects. The charity is now in liquidation.

The Commission said it opened a statutory inquiry into the charity in August 2010 and immediately suspended one of the trustees, who was also the acting CEO.

“He subsequently resigned before the commission could remove him permanently from his position as a trustee. The commission also took steps to restrict the charity’s bank accounts, so that trustees could not withdraw funds without the commission’s consent,” the Commission report said.

The Inquiry found that the then trustees did not maintain proper financial controls over income and expenditure, keep proper records or produce annual financial accounts for the charity.

“This lack of adequate governance and management of the charity meant that the then trustees failed to safeguard the charity’s funds which led to thousands of pounds of charitable funds being misused.

“One of the then trustees received unauthorised payments from the charity, in breach of trust, and in addition many of these payments were not legitimate payments for the charity to make. This included payments for parking and speeding fines, and for building work on the then trustee’s private residence. One of the then trustees disputes the commission’s findings and conclusions.”

The commission concluded that there had been serious failings in the administration and governance of the charity, which amounted to misconduct by the charity’s then trustees.

In March 2011, the charity was placed into voluntary liquidation by the trustees.

“The liquidator has started legal action to recover funds from one of the charity’s trustees, and this process is still continuing,”, the Commission report said.

Two trustees were also disqualified as company directors.

Michelle Russell, Director of Investigations, Monitoring and Enforcement at the commission, said: “Our investigators in this case uncovered numerous and significant payments and benefits to one of the then trustees, who had sole control of the charity’s bank account and was responsible for the day to day management of the charity.

“Payments such as parking fines and paying for building work on a trustee’s private residence were clearly not legitimate or appropriate payments for a charity to make.

“All trustees must take an active role and responsibility for ensuring charity funds are spent properly. It is absolutely vital that robust financial controls and procedures are in place and implemented.

“This includes ensuring there are audit trails for decisions, keeping accounting and financial records for both the receipt and use of funds, and that payments to trustees are well documented, under transparent procedures that deal with conflicts of interest.

“This is another case where our powers were not adequate as the individual concerned resigned before we were able to remove him from his position.”