Animal rescue charity investigated over accounting failings

The Charity Commission has opened a statutory inquiry into Action Aid for Animals, which operates in Croatia and Romania, over concerns about the charity’s governance and financial management

The regulator has been in discussions with the charity over the issues since 2012, and issued it with an action plan in November 2015. This included filing the charity’s accounts which have been overdue since 2013.

The trustees have subsequently failed to comply with the Commission’s action plan and the annual accounts remain outstanding. It has also been identified that the charity is not operating in accordance with its governing document and may be inquorate.

There will now be an inquiry to examine the financial controls, management and application of charitable funds, property and assets belonging to the charity; and the administration, governance, management and administration of the charity by the trustees, particularly whether the trustees have acted prudently and exercised reasonable care in respect of the day-to-day running of the charity.

In addition, the inquiry will look at whether there has been any misconduct and/or mismanagement by the trustees, and consider whether remedial regulatory action is necessary, and assess whether the charity’s objects are being met and the charity is operating for the public benefit.

The Commission has taken legal action to freeze the charity’s bank accounts. This prevents the trustees and the charity’s bankers from parting with any of the charity’s property without the permission of the commission. In addition, orders have also been issued which restrict the trustees and individuals acting as trustees of charity from entering into certain transactions relating to the charity’s operations overseas.

Action Aid for Animals filed its 2013 accounts in June 2016, when income was around £190,000. The independent examiner’s report states that ‘no opinion is given as to whether the accounts present a “true and fair view”', and issues a qualified opinion.

This states that ‘limited information and explanations’ were provided by the trustees. As no receipts have been provided, the accounts were based solely on information contained on the Cash Plus account and PayPal statements.

It says: ‘We have therefore been unable to verify any of the transactions to supporting documentation and confirm the income and expenditure analysis in the accounts or to confirm the completeness of income or expenditure included in the accounts.

‘We have also been unable to substantiate any of the information contained within the trustees report.’

In their report, the trustees made reference to the limited resources they had to handle accounts, and to paperwork which had been damaged while in storage.

The Commission says it will publish a report on its findings in due course. 

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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