Charity's pastor spent thousands on personal expenses and overseas trips

A Charity Commission investigation has found that a charity's pastor racked up thousands of pounds worth of bills on expenses including “unauthorised overseas trips”.

The regulator found “little evidence as to the charitable purpose” of the overseas trips led by the now defunct charity Rhema Church’s former pastor Martin Phelps, who has been banned from senior charity roles for ten years.

Approximately £95,000 of charitable funds were spent on the trips, to Italy, Austria, France and Greece

In addition, the Croydon based charity allowed its funds to be used for “day to day living expenses”, including on food, domestic purchases, medical bills, vets’ bills, and gym memberships “all of which appeared to be of a personal nature”.

It emerged that cheques totalling £300,000 were paid to Phelps by the charity, which was removed from the register in June last year.

Of this £225,000 of charity funds were transferred to the pastor’s bank account to reduce his monthly mortgage payments, and then later transferred back to the charity.

“No guarantee had been obtained or security measures put in place prior to transferring the significant sum, placing the funds at considerable risk,” warned the regulator.

It is also critical of a lack of written expenses policy at the charity “which was inappropriate given the volume, amounts and nature of expenses that were being incurred and processed”.

During its investigation the regulator froze the charity’s bank accounts and appointed interim managers to oversee its work and address issues.

The Commission concluded that the charity’s trustees “had failed to fulfil their duties to protect the charity and its assets and failed to demonstrate any effective oversight of senior staff”.

It also emerged that most of the charity’s spending had been incorrectly recorded and lacked sufficient information it was being used for charitable purposes. This left it facing an additional tax bill of more than half a million pounds.

The charity, which was set up in 1999 to tackle poverty and provide education services, had also failed to submit its accounts on time for five consecutive years.

Interim managers were able to recover £136,760 in funds after the charity was closed, which have been distributed to three nearby charities with similar purposes.

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