Regulator acts on £200k raised by unregistered charity

The Charity Commission has published a highly critical report on the activities of two people who raised around £200,000 for Rohingya refugees, after an inquiry found they could not show how all funds were used

Mohammed Hasnath and Ruksana Ali were the former trustees who operated two online fundraising platforms, creating a fund for Rohingya refugees. While they never registered the fund as a charity, its stated purpose made it charitable under the law.

The fundraising pages, on the portals Go Fund Me and You Caring, shared common written content which stated that the funds donated to and raised through them were charitable and intended to relieve the need and poverty of Rohingya Muslims.

The pages stated the funds were to be used for ‘charitable projects’ being conducted by the trustees, and there are numerous references to charitable projects, as well as the statement that the trustees were going to be ‘personally….distributing the funds and managing the charitable projects…’

In 2018, the Commission uncovered the fund, and discovered that its trustees were asking for donations to their personal bank accounts. Information on the platforms showed over £200,000 had been donated to the fund, well in excess of the amount at which a charity needs to be registered with the regulator.

The Commission opened a statutory inquiry. This found there were no governance or financial controls in place to protect and apply the funds raised.

Funds had been transferred into six personal bank accounts and a PayPal account, mixing it with personal money already in these accounts.

Some £68,748 of charitable funds could not be properly accounted for and was likely to have been used as non-charitable private expenditure by the former trustees, the inquiry found.

In addition, there was insufficient evidence of activity by the charitable fund.

The regulator said the former trustees’ failure to implement any governance or financial controls made it impossible for them to ensure that charitable funds were protected or applied and that this amounted to misconduct and/or mismanagement.

The Commission has removed both trustees from the fund and disqualified them from acting as trustees or holding a senior management function at a charity.

Steve Roake, head of compliance, visits and inspections at the Charity Commission, said: ‘Charities exist to improve lives and strengthen society, so it is vital that trustees fulfil their responsibility to act in the best interests of their charity at all times.

‘Instead, this inquiry uncovered misconduct by these trustees who likely allowed funds to go astray and demonstrated a disregard for the standards and behaviours expected of them. It’s right we’ve removed these individuals from acting as trustees.’

The Commission has transferred the remaining £196,528 raised by the fund to two registered charities that support Rohingya refugees.

Charity Inquiry: funds raised for the prevention and relief of poverty of Rohingya Refugees

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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