Bristol charity criticised for £48k unauthorised payments
26 Sep 2019
A supported housing charity operating in Bristol has been sanctioned by the regulator over long-running financial management failings and unauthorised payments to trustees
26 Sep 2019
The Charity Commission has completed an inquiry into Bristol Sheltered Accommodation and Support (BSAS), which ran facilities for people with addiction and mental health issues, including accommodation at Wick House.
The report found a number of former trustees responsible for misconduct and mismanagement in the administration of the charity.
The Commission has issued the charity with an official warning to address past failings in its administration, and two of the charity’s former trustees have signed voluntary undertakings not to serve as trustees for a period variously of four and five years.
The Commission’s investigation found that, despite previous guidance on this matter, unauthorised payments amounting to over £48,000 in salary payments were made to two trustees between 2012 and 2015, in breach of the governing document.
One of the trustees concerned told the Commission that prior to making the payments, the charity was verbally advised by its previous accountant that they were permitted. However, this advice was not recorded and when contacted, the accountant confirmed that they had previously advised the charity to seek permission from the Commission in relation to related party transactions but could not corroborate if verbal advice was given to the extent the charity alleged.
In addition, the inquiry found that the trustees did not properly manage a conflict of interest and/or loyalty arising from the sale of one of its hostels. A former trustee (who is connected to another former trustee) was a director of a company that purchased the property of the charity’s hostel on 14 July 2015. The former trustee was both a director of the company that purchased the hostel and a trustee of the charity between 14 July 2015 and 1 September 2015 and for that period was also the charity’s landlord. An individual connected to both these former trustees was a second director at the company.
The Commission’s investigation highlighted previously significant weaknesses in the charity’s financial controls, which resulted in the charity’s accounts for 2014 and 2015 being qualified by the auditors.
While the inquiry found no evidence that charity funds were misapplied or misappropriated, these weaknesses, which were not addressed following regulatory advice and guidance by the Commission, were judged to amount to misconduct and mismanagement.
The inquiry concluded that the trustees, except for the new trustees appointed after March 2019, had failed to comply with their legal duties in respect of the administration, governance and management of the charity and this amounted to serious misconduct and/or mismanagement in the administration of the charity.
Five residents have died at Wick House since 2014. A recent inquest into the death of one of the residents heard in November 2018 did not find the charity responsible.
The Commission’s report was also critical of the trustees’ failure to report serious incidents to the Commission, despite repeated regulatory advice on their duties in this regard.
Examples included not notifying the regulator about the suspension, by Bristol City Council, of housing benefit payments for the residents at one of its facilities, or the fact that the landlord of that accommodation had given notice for the charity to vacate the premises, which were subsequently closed down.
The charity now has a new trustee board which has positively engaged with the inquiry. Only one of the trustees appointed before the opening of the inquiry remains acting.
Amy Spiller, head of investigations at the Commission, said: ‘It is clear from our investigation that this charity was mismanaged over a long period of time, and that its trustees repeatedly disregarded regulatory advice and were receiving unauthorised payments.
‘The trustees in this case could not show that they had taken these incidents seriously, and had not reported all of the deaths of the people in their care to the Commission. We are critical of their failures in this respect. All trustees, of all charities must uphold basic standards of conduct.’