Charity trustees spent £68K outside its remit

A Charity Commission inquiry has found that trustees of Aid and Peace Trust were responsible for misconduct and mismanagement, after they failed to show how charitable funds were used and acted outside the charity’s stated objects, and the charity has been removed from the register

The regulator opened a statutory inquiry due to concerns about the management of the charity and the ongoing risk to charitable funds. It had been set up in 2011 with the aim of advancing education in Bangladesh for young people who are socially or economically disadvantaged by providing or supporting practical and vocational training.

A books and records inspection and engagement with the trustees, found evidence of poor financial oversight, with no annual returns submitted to the Commission since 2013.

The charity’s total income for the financial years ending 2011 and 2012 was £58,970 and the total undocumented/unaccounted for expenditure over the same period was £49,771, equivalent to 84.4% of all expenditure over this period being absent from the charity’s books and records.

An annual return submitted on 25 June 2015 for the financial year ending 2013 stated the charity’s income at £10,237 and its expenditure at £16,048.

The trustees confirmed that the charity did not work with a partner charity or NGO in Bangladesh, rather it worked with a committee of supporters. They explained that funds were transferred into the private bank accounts of committee members in Bangladesh but were unable to show how much money had been sent in this way and were unable to give any assurances or provide documentation to demonstrate how those charitable funds were spent.

In addition, the inquiry found over £68,000 had been spent outside of the charity’s objects, including on a TV appeal, and to send money to a hospital near the Savar building collapse in Bangladesh.

The inquiry found that trustees had failed to manage and consider additional risks. There was no record of how the decision to organise the appeal was reached and no evidence that appropriate due diligence checks had been carried out on parties involved in the appeal, including a non-charitable political lobbying group.

The charity’s paid co-ordinator was also employed by the television company involved and was connected to the charity’s chairperson, yet there was no evidence to show that these potential conflicts of interests had been managed.

The inquiry secured a voluntary undertaking from all of the trustees that they would not act in the capacity of charity trustee for three years, after finding they were responsible for misconduct and mismanagement in the administration of the charity. The charity has been removed from the register.

Amy Spiller, head of investigations team at the Charity Commission said: ‘Being a trustee is an important responsibility, and one that must be taken seriously. By failing to safeguard charitable funds and properly govern the charity, the trustees of this charity put both its reputation and the public’s generous donations at risk.

‘It is right that they have been held to account, and that our intervention has ensured remaining funds could be properly accounted for and distributed to good causes.’

Charity Inquiry: Aid and Peace Trust is here

By Pat Sweet

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