Charity Commission removes trustees over financial mismanagement

The Charity Commission has removed all three trustees from the charity Didi New Organisation, after an inquiry found they had not kept sufficient accounting records to explain the charity’s transactions and activities, there were no internal financial controls in place and they were unable to evidence the proper end use of the charity’s funds

The charity, which was set up in December 2010, had objects to assist Kurdish people in need in Birmingham and work more broadly on preventing social exclusion of Kurdish people. It had three trustees with the chair of trustees being the main contact with the commission and who was of significant influence in the charity.

The commission opened its inquiry in January 2013 following a referral from the police about the charity’s chair of trustees who was stopped by police whilst carrying charitable funds in cash on his return to the UK.

This identified misconduct and mismanagement in the charity’s administration by the trustees which included failing to account for £14,080 of the charity’s funds paid to the charity’s chair of trustees, as well as other instances of financial mismanagement.

In addition, the commission claimed the trustees failed to exercise proper supervision and control and manage the charity’s resources responsibly by inappropriately permitting the charity’s website and events to be used as a platform for and to promote an individual who was designated by the United Nations Security Council for belonging to or association with Al-Qaida, a proscribed terrorist organisation.

As a result, in July 2015 the commission used its powers to remove all three individuals as trustees of the charity.  The charity had ceased to operate and was removed from the register in August 2015 as a result.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: ‘This case is a reminder to all charities of the basic need to keep records and audit trails to show that the charity’s money has been properly spent on furthering the charity’s purposes.

‘Our investigation also found that the chair of trustees exercised significant influence over directing the affairs of the charity. All decisions concerning a charity must be taken by the trustees collectively and in accordance with their governing document.

‘Trustees who simply defer to the opinions of a dominant trustee are not carrying out their duty to the charity and the commission considers this an example of poor governance and evidence of mismanagement within the administration of the charity.’

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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