Animal charity guilty of mismanagement and misconduct, inquiry concludes

The Retreat Animal Rescue’s former trustee board was guilty of mismanagement and misconduct, a Charity Commission inquiry has found.

The Charity Commission found a number of problems at the organisation, including failure to manage conflicts of interest, insufficient numbers of trustees and unauthorised remuneration.

It found that The Retreat Animal Rescue was paying a trustee (Trustee B) for working at the charity’s café, for which they were paid £2,925.

The investigation said: “Trustee B stated he was unaware of the clauses in the governing document prohibiting any payment to trustees without prior approval from the Commission and has since repaid the monies he received in breach of trust. However, the repayment of the funds does not negate that the payments were unauthorised and should not have been made.”

The charity came under investigation after coming under the double defaulting class inquiry after missing its statutory filing obligations in 2016 and 2017. The financial information was subsequently submitted, but the charity again failed to file the financial information for the year ended 26 August 2018 on time.

It also found that from September 2015 to 1 April 2020, it was without the required number of trustees.

Conflict of interest

The charity further failed to manage conflicts of interest, it was revealed, such as taking out a loan from an individual known to two of the trustees.

A 25-year lease was also granted to the trustees, despite them being unable to validly decide to enter into the lease, due to a failure to meet the required number of trustees.

In addition to this, both parties to the lease were the same people. The landlords were both of the charity trustees and they are also named on the lease as the tenants.

“It is not legally possible to enter into a contract with yourself, consequently, the inquiry found that there are significant doubts about whether the lease is legally valid,” the inquiry said.

It also found that no discussions were recorded in relation to the deliberations that were undertaken regarding the donation and subsequent lease.

Action taken

As a result of the inquiry, a new trustee board has been implemented and the is now more aware of its duties, the commission’s filing requirements in respect of financial information, and the provisions of the charity’s governing document, the regulator said.

“The new trustee board has taken steps to implement an Action Plan issued under section 15 of the Act on 31 March 2021. The latest set of financial information was filed on time, monies received in breach of trust were repaid (and no additional unauthorised trustee payments made) and internal financial processes strengthened.

“Steps have been taken by the current trustee board to review the lease as stipulated in the Action Plan, and a monitoring case has been opened to ensure the lease is regularised in the best interests of the charity.”

The Retreat Animal Rescue have been contacted for comment.

To read the full report, visit: https://www.gov.uk/government/publications/charity-inquiry-the-retreat-animal-rescue/charity-inquiry-the-retreat-animal-rescue

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