Regulator disbands charity for failing to protect funds
The charity Save the Needy Worldwide (SNW) has been dissolved, one trustee removed and another disqualified following a Charity Commission investigation which found the trustees had failed to protect funds and identified a series of failing amounting to serious misconduct and/or mismanagement
22 Feb 2019
The inquiry was prompted by proactive engagement by the Commission in 2015 to identify how the trustees of SNW were complying with their legal obligations given the charity was operating in high risk areas internationally. The charity’s objects were the relief of poverty and financial need, in particular for those affected by natural or other disasters overseas.
The Commission also identified that one of the charity’s trustees had been a trustee of another charity, Worldwide Ummah Aid (WUA), which is subject to an ongoing statutory inquiry.
However, in July 2016, the Commission was informed by Bedfordshire Police that a trustee of the charity had been stopped at Luton airport with £3,260, which was seized by the police under the Proceeds of Crime Act 2002. The Commission obtained further information about the charity’s finances and as a result of concerns opened an inquiry.
In order to protect SNW’s funds, the Commission made an order to restrict transactions and payments made by SNW’s trustees. The order prohibited certain cash collections and the withdrawal of charitable funds in cash from the SNW’s bank accounts.
The inquiry found that there was misconduct and/or mismanagement by all of the trustees in relation to the administration and management of SNW and that the charity’s property was placed at risk by the trustees who had failed to comply with the action plan or to supply information requested, were not sufficiently aware of what other trustees were doing, and placed the charity’s funds at risk and subsequently lost them as a result of the removed trustee’s conduct.
An analysis of the charity’s bank statements and other financial records from January 2015 to September 2016 showed that over £43,000 was withdrawn in cash from the bank account in which the charity’s funds were held.
During their interviews, two trustees both confirmed that they were unaware of the sums withdrawn in cash and how they were used, and said they deferred to the third trustee to manage the charity’s finances.
The inquiry raised concerns that the funds had been used to support a trustee’s lifestyle. There were also concerns about cash couriering of monies abroad.
The trustee who was stopped at the airport made representations that these funds were the property of the charity and intended to support a Syrian refugee school in Gaziantep, Turkey. Police reports claimed that the funds were concealed and that the trustee did not conduct himself in a transparent and open manner whilst questioned.
SNW has now been dissolved by the Commission and ceased to exist when it was removed from the Register of Charities on 15 February 2019.
Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: ‘Our inquiry found that the trustees of Save the Needy Worldwide were responsible for a series of failings at their charity amounting to serious misconduct and mismanagement. It’s therefore right that robust regulatory actions have been taken against those responsible.
‘The Commission strongly advises charities against the use of cash couriering as a method to transfer charitable cash due to the risks involved. The effects of a cash seizure include the charities’ beneficiaries losing out, an impact on the charities’ activities and the loss of donor money - including the permanent loss of funds. In this case these risks materialised and there was a loss to the charity.’
Report by Pat Sweet