Regulator investigates connected charities over financial mismanagement

The Charity Commission has opened an inquiry into two connected charities following concerns about ‘financial irregularities’.

The two charities involved are Idaara Maarif-E-Islam, which aims to advance and preserve Islam, and The Voice of Truth, which prior to its closure, sought to promote the benefit of community and the Shia Muslim faith.

According to the regulator, it has “concerns about financial irregularities” linked to Gift Aid claims involving both charities, as well as concerns around inconsistencies between the income and expenditure reported in the accounts for The Voice of Truth for the year ending 31 March 2016.

The Charity Commission said its records show “significant connections” between the two charities as “substantial” payments between the two were evident from charity bank statements.

It also found at least one trustee of Idaara Maarif-E-Islam has also served as a trustee for The Voice of Truth.

The Commission also expressed concerns about payments made by The Voice of Truth to individuals and a company who may be connected to the charity.

The regulators inquiry will now seek to establish if the close relationship between both charities has been in the best interest of both organisations, and if any conflicts of interest have been adequately managed by the trustees.

As part of its inquiry, the regulator will examine the following:

• The administration, governance and management of the charities with specific regard to the extent to which trustees have:
• Responsibly managed the charities’ resources and financial affairs, in particular the adequacy of the charities’ financial controls.
• Managed any conflicts of interest or loyalty arising between Idaara Maarif-E-Islam and The Voice of Truth and individuals connected to both charities, and ensured that any transactions between the two charities have served the charities’ best interest.
• Adequately managed risks to the charities, their property and reputation.
• Maintained an accurate record of the identity of the trustees on the register of charities.
• The extent to which any weaknesses in the management and administration of the charities identified by the inquiry were a result of misconduct and/or mismanagement by the trustees.

With specific regard to trustees of The Voice of Truth, the inquiry will also examine the extent to which they have:

• Ensured that the submission of accounting and returns information comply with statutory requirements.
• Prudently managed Gift Aid claims.
• Adequately processed sensitive data such as the personal details of individuals collected directly by Idaara Maarif-E-Islam or received from third parties pursuant to the relevant legislation at the time.
• Properly authorised and monitored payments to connected persons and/or companies.

And, with regards to the trustees of Idaara Maarif-E-Islam, the extent to which they have:

• Adequately protected sensitive data such as personal details of donors pursuant to the relevant legislation at the time.

The Voice of Truth was removed from the charity register in January 2018, after the inquiry found that it had ceased to operate.

The Commission’s investigation continues.

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