The regulator has opened a statutory investigation into a charity after one of its trustees was convicted for laundering the proceeds of crime through the organisation.

The Charity Commission said in addition to the fraud conviction, a review of Urban Relief’s finances revealed reported income and expenditure did not match the amount of funds that flowed through the charity’s bank account.

Urban Relief, registered charity number 1114537, has objects to relieve poverty and financial hardship among West African people by providing food, clothing, housing and other services.

The commission said the inquiry is examining a number of issues of “serious regulatory” concern around the administration and financial management of the charity. Matters under examination include whether charitable funds have been misapplied for non-charitable purposes and whether trustees are able to properly account for the charity’s income and expenditure.

The inquiry will look at whether trustees have fulfilled their legal duties and responsibilities to safeguard the charity’s property and assets, including whether they have correctly exercised their legal duty of prudence.

Governance, management and administration at the charity will be examined, and whether the charity’s decision making processes are adequate. Financial controls, management and application of charitable funds will come under scrutiny and the regulator will examine whether there has been any misconduct and/or mismanagement by the trustees.

The inquiry will also consider whether remedial regulatory action is necessary.

The commission stressed that opening an inquiry is not in itself a finding of wrong doing. Inquiries examine issues in detail and investigate and establish the facts so the regulator can establish whether there has been misconduct and mismanagement; establish the extent of the risk to the charity’s property, beneficiaries or work; and decide what action needs to be taken to resolve the serious concerns, using legal powers if necessary.

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