The Charity Commission has published a report involving over 30 charities it investigated after the Big Lottery Fund raised concerns about their grant applications.

During its investigation the Commission removed a number of individuals as charity trustees and several former trustees have since been convicted of fraud and theft offences.

The Big Lottery Fund first contacted the Commission, and the police, with its concerns in September 2004.

The police investigation focused on suspected criminal activity by individuals.

The Commission’s regulatory interest was in the operation of the charities concerned and the protection of charitable funds.

The Commission’s inquiries looked at each charity on a case-by-case basis to establish whether regulatory action was required to protect each charity and its funds.

In relation to some of the charities the Commission was able to resolve the regulatory concerns identified shortly after the initial Inquiry was opened by providing them with regulatory advice and guidance.

The Commission’s full findings regarding the other 12 charities are set out in the report.

The Commission found evidence of mismanagement across these charities, including, in a number of instances, financial mismanagement and unmanaged conflicts of interests.

During the course of its investigation the Commission acted to protect charitable funds it considered to be at risk.

It used its powers to freeze the charities’ bank accounts and only authorised payments if it was satisfied these were for legitimate charitable expenditure.

The Commission also removed four individuals as trustees from four different charities.

These individuals are now disqualified from holding this position in any other charity.

The Commission’s investigation was put on hold between June 2006 and September 2010 to avoid prejudicing the police’s criminal investigation and subsequent prosecutions.

Nine individuals identified in the report, who were involved in 10 different charities, were either found guilty of or pleaded guilty to fraud and theft related offences in 2009-2010.

Following the conclusion of the criminal investigation the charities which had ceased to operate were removed by the Commission from the Register of Charities. The Commission used its powers to transfer the charities’ remaining funds to other charities, so they could be used for charitable purposes.

The Commission’s report on its inquiries highlights charity trustees’ legal duty to ensure a charity’s funds are applied solely and reasonably for the furtherance of its objects.

Importantly, trustees must also be able to demonstrate this by keeping accounting records and an adequate audit trail.

Share Story: