Poverty relief charity Iraqi Welfare Association (IWA) is under investigation by the Charity Commission over its “high risk methods to transfer and spend funds”.

The regulator has opened a statutory inquiry in to the charity, which works to relieve poverty in the Iraqi community, and is also concerned about “possible unmanaged conflicts of interest”.

A key concern is that the charity has been moving funds overseas using a ‘Hawala’ informal transfer system.

In addition, the charity’s director was found to be “using his personal bank account to make payments on behalf of the charity”.

It is also looking into failures to file its accounts on time and whether it has been acting outside of its charitable remit.

The charity failed to file accounts on time for four consecutive years between 2019 and 2022, according to the regulator.

“The Commission started proactively engaging with the IWA to assess how the charity was managing risks associated with working in Iraq,” said the regulator.

“Iraq is deemed a ‘high-risk’ country by the Foreign, Commonwealth and Development Office. Its engagement continued due to the charity’s failure to submit accounts for four consecutive years.”

The regulator added; “Using a personal bank account and transfer methods outside the formal banking system poses a risk to possible loss or misuse of funds.

“The inquiry will also investigate potential conflicts of interest regarding decisions around salary payments and a contract with a connected private company.”

The charity also provides classes and training within the Iraqi community on health and wellbeing issues.

The charity’s financial reporting is now up to date. Its accounts for the year ending July 2023 show its income was £792,830 and it spent £809,950.

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