Bristol housing charity underreported thousands in income

The trustees of a housing charity branded the ‘most prosecuted landlords in the UK’ have been found responsible for misconduct by the Charity Commission

The investigation identified high levels of underreported income at Alternative Housing, which has been removed from the register. The charity was set up to provide accommodation, support and care to those in need in Bristol.

The Commission opened an inquiry in July 2017 following the charity’s conviction in November 2016 for six breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006, which led to the charity being branded the ‘most prosecuted landlords in the UK’ by news articles.

The charity’s services and accommodation provided to residents were reported in news articles at the time to include issues such as no heating, no water, broken cookers and overflowing raw sewage.

In convicting the charity, the court ruled that Alternative Housing had not maintained firefighting equipment and fire alarms, and failed to ensure the internal structure of the property was maintained. It also failed to ensure the water supply and drainage system serving one property was kept in good, clean and working condition.

On opening the inquiry, the Commission found the charity looked like it had ceased to operate. The only person recorded as a trustee on the register at the time told the inquiry he had never been a trustee. None of the other trustees provided any information to the inquiry.

The charity failed to file accounts in accordance with charity law over several years.

An order on the charity’s bank account meant the Commission was able to determine that the charity reported their income as falling beneath the threshold of £25,000 for filing accounts with the Commission when, over several years, it had substantially exceeded this.

For the 2014/15 financial year the charity, in its annual return, reported its income was £10,000 and spending was £4,697, and for the 2015/16 financial year the figures were income of £7,980 and spending totalling £6,287.

However the Commission’s analysis of the charity’s bank statements revealed that the 2014/15 income was  £234,952 and spending was £228,165, while for the 2015/16 financial year the charity’s income was £268,693 and spending was £277,974.

The charity did not submit accounts or an annual return for the 2016 to 2017 financial year, but its bank statements showed income was £150,457 and spending was £148,624.

The inquiry also found there were links between trustees of the charity and the directors of companies the charity had paid significant charitable funds to, but the inquiry found no evidence to suggest apparent conflicts of interest, had been declared or managed appropriately.

For example, one signatory on the charity’s bank account was the sole director of a company that received £232,000 from the charity and owned a property, occupied by a relation, who was a former trustee of the charity.

Another of the charity bank account signatories, who was a former trustee, was the former director of a social housing lettings company. This person is one of the proprietors of the charity’s address. The other proprietor of the address is the sole director of the other company, which received £283,954 from the charity. This director gave the charity address as his company’s correspondence address. In addition, he and another trustee were the directors of another housing company.

The charity’s bank statements revealed that its main source of income, from 10 July 2013 to 15 February 2017 came from ‘Bristol Housing Benefits’ and during this period this totalled £443,401. During the same period the charity paid £566,462 to the companies.

The local authority told the inquiry it had serious concerns over the validity of the housing benefit being requested by the charity on behalf of tenants occupying the properties it managed. It therefore found the charity was not fit to receive housing benefit and stopped making payments.

The inquiry determined that the trustees had failed to ensure the charity could deliver suitable accommodation to its beneficiaries and the condition of the properties had placed people who needed support at significant risk of harm. This was mismanagement and/or misconduct by the trustees.

Amy Spiller, head of investigations team at the Charity Commission, said: ‘Charities exist to do good and ensuring beneficiaries are safe should be an absolute governance priority for all trustees. The trustees of Alternative Housing failed in this responsibility.

‘Instead, there are indications the trustees may have exploited their charitable status for financial gain – by paying significant funds to the companies connected to people at the charity whilst exposing beneficiaries to harm, and by failing to ensure the accommodation the charity managed was maintained.’

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