A homelessness charity that "consistently and repeatedly" failed to report on its finances was effectively run by one trustee for several years, a Charity Commission probe has found.

An investigation into Gifting Humanity was launched by the regulator after the charity became subject to its double defaulter class inquiry for those that fail to submit financial information for two or more years.

The regulator details that the Leicester based charity failed to submit returns for the financial years ending April 2019 through to 2022, even by an extended deadline agreed with the Commission.

Among concerns was confusion over responsibility for submitting accounts. One trustee told the regulator in December that accounts had not been handed in as the trustee who dealt with its financial records had left and that they were unable to take over this task as their personal circumstances had changed.

“A volunteer had been helping to compile the accounts, but they had not been able to finish them,” found the regulator.

The charity then failed to hire an accountant as requested to compile its outstanding accounts, and this professional expertise was only brought in following the launch of the regulator’s investigation and on a voluntary basis.

“The inquiry found the charity was not keeping or maintaining proper financial records,” said the regulator.

“For instance, the charity did not record its receipts and payments, and the accountant had to rely on bank statements, receipt books, and other information to prepare its overdue accounts.”

In reaching a decision that there was misconduct or mismanagement by trustees in the administration of the charity the regulator found Gifting Humanity “had a lack of policies covering expenses, cash handling, and use of charity funds overseas, which may have contributed to the difficulty in preparing the accounting information”.

Insufficient number of trustees

Further concerns were raised that the charity did not have enough trustees, as two of its three trustees had left without formally resigning.

This effectively left just one trustee to manage the charity for several years.

The charity has since submitted all its outstanding accounts and has a minimum number of three trustees in place. The regulator also points out that there is no evidence that its funds were used for any purpose other than to benefit the charity.

Its latest submitted accounts showed its income was £332,166 and it spent £295,242 for the financial year ending April 2024.

The regulator warns the sector that “an effective charity is run by a properly appointed, clearly identifiable board or trustee body with at least the minimum number of trustees, as required by its governing document”.

It adds: “Holding the position of trustee in name but failing to fulfil the legal duties and responsibilities of a trustee may amount to misconduct and mismanagement in the administration of a charity.”

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