Charity Commission probe over charity's missing £345k

The Charity Commission has opened a statutory inquiry into Healthy Planet Foundation over concerns around a number of accounting and governance issues at the environmental charity, which reported causing the loss of £345,000

In September 2014 the commission opened an operational compliance case into the Healthy Planet Foundation, after the charity reported the loss of £345,000 as a consequence of alleged fraud to the regulator. The charity, whose aims include promoting the conservation, protection and improvement of the natural environment, also reported the alleged fraud to the police.

The Charity Commission now says the earlier compliance case has highlighted a number of wider regulatory concerns.

These include concerns about payments from the charity’s subsidiary company to companies linked to individuals connected with the charity, including trustees.

Other concerns included the charity’s involvement in rates relief schemes, which have resulted in the charity incurring losses following legal action taken by a local authority.

Healthy Planet Foundation is one of a number of charities known to have taken over empty high street retail premises under a deal whereby landlords, who benefit from the lower business rates charged to charities using unoccupied shops, pass over some of the savings to the charity to cover their costs.

The commission is also concerned that the charity has only two trustees, while the charity’s governing document requires that there be three trustees for quorate decision making.

The inquiry will look at the circumstances leading to the significant financial loss of charity funds via alleged criminal activity.

It will consider trustees’ decision making when entering the charity into rates relief schemes and circumstances leading to the significant financial loss as a result of legal action taken by a local authority.

It will also examine the trustees’ administration, governance and management of the charity, in particular around the business model of the charity and its subsidiary and the dealings of the latter with other companies, including the management of conflicts of interest that may arise.

The regulator stressed that opening an inquiry is not in itself a finding of wrongdoing. The purpose of an inquiry is to examine issues in detail and investigate and establish the facts so that the regulator can ascertain whether or not there has been misconduct or mismanagement and decide what action needs to be taken to resolve the serious concerns.

Healthy Planet Foundation’s main activity is recycling books to prevent them from going to landfill. According to its accounts lodged with the Charity Commission, its income has soared from £13,108 in 2009 to over £2m in 2014.

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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