Children’s charity shut down amid financial concerns

The Charity Commission has removed a children’s charity from its register amid concerns over unexplained spending and late filing of accounts.

The regulator launched an investigation in February 2017 into Believe in Magic over the late submission of the charity’s accounts.

The came after the trustees failed to make themselves available to the Commission for a meeting to discuss the charities administration and finances.

The regulator was concerned over the late filing of accounts and frequent cash withdrawals mixing charity and personal funds.

This made “it impossible to establish whether all of the cash withdrawn and/or transferred had been used within the charity’s objects”, according to the Commission.

Believe in Magic was removed from the register last month following the regulator’s investigation.

“The inquiry found the trustees’ collective failure to comply with statutory filing requirements was misconduct and/or mismanagement by the trustees in the administration of the charity,” said the regulator.

According to Charity Commission records the charity was set up in 2012 to support children and young people suffering from serious or terminal illness and their families and carers. Much of its funding was generated through online fundraising platforms.

The regulator found that the charity’s trustees “failed to comply with their statutory filing duty” because its accounts for the financial year ending 4 November 2014 were submitted 60 days late and its annual return for the same period was 49 days late.

The charity then failed to file accounts for the financial year ending 4 November, 2015, despite analysis of its banking information revealing its income was £445,367 and it had spent £393,907.

“When the accounts were submitted, 215 days late, they had not been independently examined,” the regulator found.

The Commission has still not received an annual return for the charity for the year ending 4 November 2016.

“Trustees are expected to co-operate with statutory inquiries and comply with the Commission’s directions to provide information,” found the regulator.

“The inquiry found that a collective failure by the trustees to fully cooperate and engage with the inquiry prevented a full and timely investigation of whether, and to what extent, the charity was operating in furtherance of its charitable objects and for the public benefit.”

Police were alerted by the Commission, due to large unexplained cash withdrawals made.However, no further action was taken following a criminal investigation that found insufficient evidence.

The Charity Commission added: “The Commission does not investigate crime and does not have prosecuting powers. The unexplained expenditure of charity funds was reported to the police, who undertook a criminal investigation but, due to insufficient evidence, did not proceed further.”

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