£1.2m protected at charity which failed to file accounts

A Charity Commission inquiry into a Birmingham-based charity has resulted in £1.2m of charitable income being accounted for, after an investigation found that its former trustees repeatedly failed in their duties to administer and manage the charity, including failing to file annual accounts for several years

The inquiry into the Bethel United Church of Jesus Christ Apostolic UK was opened in March 2017 after the trustees repeatedly failed to submit mandatory annual financial information despite regulatory advice that was provided previously.

Set up in 1995, the charity aims to advance the Christian religion. It has been subject to previous regulatory engagement. This included a compliance case after a significant amount of funds were misappropriated by a then trustee, as well as the Commission’s double defaulters class inquiry in 2016 after former trustees failed to file the charity’s annual financial information for over five consecutive years.

The latest inquiry found the former trustees responsible for misconduct and mismanagement in the administration of the charity. This included a failure to manage the charity’s funds appropriately.

As well as defaulting on repayments on debts amounting to £1.2 m, the trustees failed to manage conflicts of interest in relation to transactions between the charity and a Birmingham based bakery where a former trustee was a majority stakeholder. During the financial year ending 2014 this resulted in a debt of £23,000 being owed to the charity. Those funds were subsequently repaid and the trustee involved resigned.

The former trustees also failed to fulfil a number of their legal duties. Despite receiving guidance on this from a previous inquiry, the trustees again failed to file the charity’s annual financial information on time. There was also an absence of a full board of trustees, as required in the charity’s governing document, to manage the charity effectively.

As a result, the Commission has issued an action plan to the charity’s new trustees setting out steps which the inquiry considered necessary in resolving the issues of concern.

The Commission will be monitoring the new trustees’ compliance with the plan, and says it will consider further enforcement action against the charity and/ or the new trustees should they not comply with the plan.

Harvey Grenville, head of investigations at the Charity Commission said: ‘It is unacceptable that this charity has repeatedly found itself subject to regulatory scrutiny. The former trustees failed to meet the expectations of the public and the charity’s beneficiaries in terms of transparency, accountability and the careful stewardship of charitable funds.

‘I expect the new board of trustees to continue making good progress, thereby returning the charity to a sounder footing.’

During the course of the investigation, one trustee passed away and one resigned. The remaining trustees were replaced by the current board of trustees who were appointed in December 2017.

Charity Inquiry: Bethel United Church of Jesus Christ Apostolic UK

Report by Pat Sweet

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