Lack of financial control sees charity dissolved

A Charity Commission inquiry into the Ghulam Mustafa Trust has found evidence of misconduct and mismanagement, including a lack of financial control, which mean the charity has now been dissolved

The inquiry was prompted by complaints about a video posted on the charity’s social media, which was removed following the Commission’s intervention. The posting of the video called into question whether the trustees were acting in accordance with charity law.

The charity’s objects were the prevention or relief of poverty or financial hardship in Pakistan.

In September 2015 the Commission issued the charity’s trustees with an action plan which included introducing social media and financial controls. The trustees did not comply with the action plan, so the Commission opened an inquiry to examine matters further.

The inquiry found there was misconduct and/or mismanagement in the administration of the charity as a result of failures on the part of the former trustees and in some instances as a direct result of the sole conduct of one trustee.

The trustees were unwilling or unable to properly administer their charity and failed to maintain accounting records. One trustee completed the majority of transactions, with little or no oversight by the other two.

The Commission found over £10,000 of the charity’s funds expended in Pakistan were not accounted for and while some expenditure was supported by invoices, often it was not clear how this expenditure related to the charity’s work.

The inquiry also found the trustees had conducted themselves below the standards expected of trustees and one trustee had created and/or posted offensive content on social media with no oversight by the others.

Collectively the trustees failed to comply with their legal duties under charity law and their charity’s governing document to produce their accounting returns within specified timeframes.

In April 2017 two of the charity’s original trustees resigned, leaving one remaining, who then appointed three new trustees to the charity. The original trustee was disqualified from serving as a charity trustee as a result of the findings of this inquiry.

The new trustees decided, in 2018, that the charity was no longer viable. The charity was removed from the register and dissolved on 28 February 2019.

Michelle Russell, director of investigations, monitoring and enforcement said: ‘The charity was also involved in couriering cash overseas, which is against Commission guidance. This practice is high risk and puts valuable charitable funds in jeopardy. In this instance, the trustees were unable to account for the charity’s expenditure.

‘Through their misconduct and mismanagement the trustees jeopardised the trust that donors placed in those responsible for the charity through their use of social media and their poor financial oversight.

‘The trustee responsible for creating and posting offensive material on the charity’s social media is now disqualified from acting as trustee.’

Charity Inquiry: Ghulam Mustafa Trust is here.

Report by Pat Sweet

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