Church charity trustees banned over £450k unauthorised payments
29 Nov 2019
The Charity Commission has disqualified the trustees of a London-based Christian charity after discovering unauthorised payments of over £450,000 and cash withdrawals of over £700,000
29 Nov 2019
The regulator’s investigation into Kingdom Life Ministries, which runs a church in Tottenham, north London, was opened after repeated failures to meet deadlines for filing accounts.
The trustees failed to file the accounting information for FYE 31 May 2016, FYE 31 May 2017 and FYE 31 May 2018 on time and in line with statutory requirements.
The Charity Commission said it found evidence of serious misconduct and/or mismanagement by the former trustees. It has disqualified the individuals after they resigned as trustees, holding them to account for financial mismanagement, governance failings, and non-compliance with the Commission.
The investigation found that all trustees received unauthorised payments from the charity between June 2013 and November 2018, totalling £456,853.
During an inspection of the charity’s records, investigators established that the three former trustees had decided their own weekly salary payments of £200, £200 and £90 respectively.
These payments were made in breach of the charity’s governing document, and continued even after formal regulatory advice instructing an end to these arrangements. A total of £28,971 was paid in the months following the inspection.
The former trustees claimed that other payments related to reimbursement of costs, but failed to provide sufficient information to evidence these. After being informed that the inquiry was closing, they did submit invoices relating to construction work, international flights and video production. However, analysis of the charity’s bank statements showed that the majority of payments made to the former trustees were round sums.
The charity’s bank statements show that cash withdrawals totalling £719,466 were made between 1 June 2013 and 16 August 2016. During the inspection, it was not possible to establish how the cash withdrawals were used in furtherance of the charity’s objects due to a lack of record keeping.
The former trustees stated that relevant records were available, however, failed to provide them. After being informed that the inquiry was closing, the former trustees submitted a list of estimated expenses, but these did not match the withdrawals.
In June 2018 an order was issued restricting financial transactions by the charity, but following the order the inquiry noticed a significant reduction of deposits into the charity’s bank account. The inquiry therefore issued a further order directing the former trustees to pay all existing charitable funds and future funds into the charity’s bank account. All three trustees resigned 12 days later.
The Commission said serious conflicts of interest also went unmanaged by the former trustees. Two were married, meaning that there was only one independent un-conflicted trustee.
Decisions were made without identifying, recording or managing conflicts, and the charity had no written policy or procedures to manage conflicts of interest. Over £38,000 was paid to individuals connected to the former trustees between December 2015 and May 2018.
The former trustees failed repeatedly to comply with legal requirements set by the Commission, including an official warning issued under section 75A of the Charities Act.
The inquiry has disqualified all three former trustees of Kingdom Life Ministries from serving as a trustee or senior manager of any charity in England and Wales, for a period of 10 years.
Amy Spiller, head of investigations team at the Charity Commission said: ‘We know that late filing of accounts can be an indicator of far more serious concerns within a charity: this inquiry has confirmed that, and brought to light some concerning patterns of mismanagement.
‘Charity trustees should carry out their duties with probity and care. They should be driven at all times by their charitable mission and purpose, and a desire to make things better for the community they serve.’
‘This was not the picture painted at Kingdom Life Ministries, and it’s right that those responsible have been held to account for their failings in the running of this charity.’
The inquiry has issued a further order requesting the new trustees to address outstanding issues with the charity’s accounts and financial management. They have already engaged positively with the inquiry.
Spiller said: ‘I hope and expect that the new trustees will be able to drive forward positive change at the charity, for the benefit of its congregation and people it helps.’