A Charity Commission investigation has highlighted a raft of failures by trustees at the Coventry City of Culture Trust, the charity set up to oversee the city’s successful bid for the award five years ago and to run events over the following two years.

Inadequate budgeting and financial planning by trustees during the Covid pandemic and their failure to scrutinise the charity’s financial sustainability were among concerns raised by the regulator.

It is also concerned that trustees failed to make the Commission aware of financial risks and the loss of key funding “in a timely manner”.

Despite the failures highlighted, the regulator notes there is no evidence that charity money was misused or payments were made to connected parties.

The Commission’s probe was launched after being informed the charity was no longer financially viable and trustees were looking to put it into administration.

A disagreement among trustees was also highlighted, with two resigning after objecting to the charity’s securing of a £1m loan from Coventry City Council in 2022.

The regulator notes that the charity “may have been insolvent prior to entering into the loan” with the local authority “and there were doubts about the charity’s ability to repay the funds in full”.

“Many will rightly feel frustration and disappointment about the way in which the legacy of Coventry’s time as City of Culture was managed by the charity,” said the Commission’s head of regulatory compliance Tracey Rollock.

“We are critical of the trustees for their failure to effectively oversee the charity’s finances, notably the decision, late in the day, to secure a loan which the charity was unable to repay.

“Trustees are stewards of their charity’s money – in this case public money – and in this case, the trustees’ stewardship fell short.”

She added: “We accept that the COVID-19 pandemic had a detrimental impact on the charity, and it is important to be clear that we found no evidence of misuse of charitable funds for personal gain.

“But our findings in this case are serious, and should serve as a reminder to other trustees of the vital importance of financial diligence and care”.

The regulator has confirmed that the charity has been removed from the register following its liquidation.

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