Regulator halts charity fundraising over financial concerns

The Charity Commission has opened a statutory inquiry into a health charity, J.E.L.A Foundation, and restricted its bank and fundraising platform transactions over concerns about potential financial irregularities

The London-based charity has objects to improve the lives of people particularly, but not exclusively, living in Haiti and those of Haitian descent residing in the UK through the advancement of education and training and the promotion of good health.

Following scrutiny of the charity’s financial accounts, the Commission found a number of irregularities which raised serious concerns. These included a discrepancy in excess of £200,000 between what was declared in the charity’s annual returns for the last five years, and the bank transactions carried out during the same period.

In addition the Commission found repeated payments, several times a month over a number of years to a charity trustee, and also identified a pattern of donation payments totalling over £700,000 from individuals to the charity, including two trustees and a potentially connected party. This raises concern that there may have been misapplication of charity funds and possible personal benefit.

The Commission has issued an order restricting the charity’s access to its bank accounts and prohibited three major online fundraising platforms used by the charity from parting with funds without prior approval from the Commission.  It has also issued an additional order preventing trustees from undertaking further fundraising with alternative online platforms until further notice.

The Commission is also concerned that there are insufficient trustees to be compliant with the charity’s rules of governance; only four individuals are listed in the accounts, whilst the charity’s governing document requires a minimum of five trustees.

The inquiry will examine whether the financial controls of the charity are adequate and its funds have been properly expended and can be accounted for, and whether the trustees compliance with legal obligations for the content and preparation of the charity’s accounts and other information or returns is in line with the statutory requirements.

It will consider whether the charity has been operating for exclusively charitable purposes for the public benefit in furtherance of its charitable objects, and whether the trustees have complied with legal duties in respect of their administration, governance and management of the charity.

In addition, the regulator will look at whether the trustees may have knowingly or recklessly provided the Commission with information which is false or misleading.

It is the Commission’s policy, after it has concluded an inquiry, to publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were.

Report by Pat Sweet

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