Charity trustees censured for conflicts of interest

The regulator has censured a Yorkshire charity over unmanaged conflicts of interest, including payments to trustees, and unbalanced research

The Charity Commission has criticised the trustees of Just West Yorkshire, a charity set up to promote racial equality, after reports they produced did not appear to properly consider the charity’s purpose or the need for balance, and they failed to manage conflicts of interest.

After the regulator issued notice of its intention to issue an official warning over the trustees’ actions, but before it was able to complete this, the trustees closed the charity which is now not operating.

The Commission opened a compliance case to examine the administration of the charity after receiving complaints, particularly in relation to two publications, one about the government’s ‘prevent’ strategy, and the other criticising comments by a local MP.

The Commission was also critical of trustees’ failure to manage conflicts of interest, which saw two trustees receive unauthorised payments from the charity’s funds.

One trustee received £6,000 to work as a paid contractor on the Rethinking Prevent report. Investigators found no evidence that the individuals recused themselves from decision-making when their payment was discussed.

The commission also found the payment was unauthorised and that the then trustee received a private benefit as there was no ‘service level contract’ with the charity and it appears the legal requirements to authorise the payment were not met.

In addition, the trustees failed to submit trustees annual report, annual return and accounts to the commission within 10 months of the financial year end, 30 September 2018. The charity’s annual accounting documents were filed 24 days late for the financial year ending 30 September 2017.

As regards the two reports, the Commission was concerned by how research was conducted, flagging up a lack of transparency about the methods used to promote a survey, and the way in which participants were selected to participate in research.

Tim Hopkins, assistant director of investigations and inquiries at the Charity Commission said: ‘It is unacceptable that the trustees of this charity failed to fully discharge their legal duties in this way, resulting in unmanaged conflicts of interest and private benefit.

‘Charity trustees should honour their responsibility and legal duty to act in the best interests of their charity at all times. As shown here, failure to do so can cause irreparable damage to a charity.’

Charity case report: Just West Yorkshire

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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