A London-based aid charity has been removed from the register and trustees disqualified after two statutory inquiries found it could not account for around £2.8m worth of goods shipped to Syria, among a catalogue of other financial concerns
The Charity Commission’s investigations into Aid Convoy found ‘serious failures’ of due diligence and governance put the charity’s property at undue risk.
This included repeated non-compliance with legal duties to file accounts, and significant underreporting of the charity’s income.
False or misleading information was provided in an annual return filed for the financial year ending 1 April 2017, which stated that the charity did not operate outside of England and Wales. However the key achievements reported in the accounts for the same period relates to activity overseas, providing aid to an area between Turkey and Syria.
In addition, the Commission’s report into its investigations highlights inconsistencies in the accounts filed for the financial year ended 1 April 2018. These stated that the charity generated £321,071 of income during the year, including both direct transfers into the charity’s account and cash donations.
However, the trustees also stated that the charity had sent ‘40ft. containers of essential aid from new and used clothes to tinned food, medical equipment etc. delivered to Northern Syria at the average value around £25,000 each’.
The Commission said it is not known at present how many containers were sent during this reporting period and the value of the donated goods was not included in the charity’s reported income as is required by the charity statement of recommended practice (SORP).
This means that the charity’s income was seriously under reported and the true level of income may have required an audit which did not take place.
During the 2017 financial year, the trustees advised that the charity sent 48 containers to Northern Syria, valued at an average of £60,000 each as stated in the trustees annual report. The regulator said this means that £2.88m worth of goods was shipped within that reporting year that could not be appropriately accounted for.
The Commission first launched an inquiry into Aid Convoy in 2013 after the charity failed to account for half of its spending, and the charity’s cash was seized by police at UK borders.
The regulator found serious concerns about the charity’s financial management and took action to freeze the charity’s bank account. Further probes found severe weaknesses in the charity’s processes for ensuring monies and goods went to the people the charity was set up to help.
In 2016 the regulator issued an order directing the then trustees to take steps to improve the charity’s governance and financial management.
A second inquiry was opened in 2018 after the charity’s then trustees failed to comply with this order.
The second inquiry identified continued financial failings, and also found that the charity was handling donations of controlled substances, including morphine, without the required licence. These were collected in appeals for shipments to Syria but the trustees did not know what was included in containers and so could not account for the end use of donations or be sure that they did not fall into the hands of terrorist organisations.
The Commission’s concerns were further exacerbated when a former representative of the charity was deprived of his UK citizenship over connections to a proscribed terrorist organisation.
When told to review the charity’s relationship with this individual the trustees told the Commission ‘this is not a decision we are willing to rush into’, and the report is critical of their behaviour in maintaining an inappropriate relationship.
In 2018 The charity’s bank withdrew its services. The trustees failed to report this, and then acted in breach of the charity’s constitution by paying funds into trustees’ personal bank accounts.
Due to the levels of misconduct and/or mismanagement within the charity, the inquiry appointed Adam Stephens, partner at Smith and Williamson, as interim manager in November last year.
The trustees failed to cooperate with the interim manager, and, after concluding that the charity ‘had no viable future’, he transferred the remaining assets, including £12,218 of charitable funds to another charity before winding the charity up.
Aid Convoy was removed from the Register of Charities on 12 June. Two trustees, Muhammed Mumin and Asim Shafaq, were also disqualified from trusteeship and senior management functions for a period of eight years.
Tim Hopkins, assistant director of inquiries and investigations at the Charity Commission, said: ‘This case highlights the damaging effects of trustees failing to properly safeguard or protect a charity from associations with terrorism.
‘Ultimately the trustees did not honour the trust donors placed in them by giving generously to help people affected by the crisis in Syria.
‘Good governance is not a bureaucratic detail – it underpins the delivery of a charity’s purpose to the high standards required under charity law and which the public rightly expect.
‘The trustees failed to live up to those standards, committing repeated acts of mismanagement and misconduct, and aligning the charity to individuals whose past conduct posed a threat to their charity.’