Regulator highlights lack of financial controls at London charity
A Charity Commission inquiry into a South London charity, the Khatme Nubuwwat Centre (KNC), has found that the trustees are responsible for a series of failings amounting to misconduct and/or mismanagement, which include a lack of adequate financial controls or policies
21 Mar 2019
The inquiry was prompted by the Commission’s engagement with the charity’s trustees after a news article alleged the charity, then known as the Aalami Majlise Tahaffuze Khatme Nubuwwat, was displaying literature calling for the killing of members of the Ahmadi community.
As a result of this, the Commission found serious regulatory concerns in relation to the trustees’ administration and management of the charity. This included the trustees demonstrating behaviour which was unacceptable and fell below the standard expected of them.
The inquiry found that the charity had no framework or controls in place in relation to the distribution of literature or hosting of speakers at its premises.
The charity had also been associated with an organisation in Pakistan, which extended to bearing the same name and using the charity’s contact details on their materials. The inquiry was concerned by this association due to the Pakistani organisation’s alleged connections to terrorist and extremist groups as well as offensive material on its website relating to the Ahmadi community.
As a result of the Commission’s engagement, the trustees made improvements to the charity which include replacing a number of its trustees, implementing new policies, establishing a new governing document and taking measures to remove links to the Pakistani organisation of the same name.
As part of the investigation, the trustees provided a copy of their financial controls policy which was adopted in January 2017. The Charity Commission said this policy was not tailored to the charity and its activities and contained a number of inconsistencies and irrelevant provisions. The inquiry questioned if the trustees had read the policies prior to adopting them, as the inquiry was concerned that it appeared as though the policies had been adopted without review or consideration of them. The trustees were advised to immediately amend the policies to reflect the charity’s current practices and to submit an amended copy of the financial controls policy, which has been with a number of the identified anomalies removed.
The charity’s accounts and annual returns were filed late each year between 2013 and 2017, with delays of between 31 days and 109 days.
The Charity Commission said in its report that the trustees’ repeated failure to ensure the charity’s statutory accounts and annual returns were filed on time is a repeated pattern of behaviour and evidence of their misconduct and/or mismanagement in the administration of the charity. It also breached the charity’s new governing document which came into effect on 2 February 2018.
The inquiry acknowledges that the charity’s statutory accounts and annual return for FYE 31 August 2018 were filed on time on 1 February 2019.
In February 2019, the Commission used its regulatory powers to issue the charity’s trustees with an official warning due to their failure to ensure its accounts and annual documents were filed on time. This sets out that the trustees must take all reasonable steps to ensure future returns are submitted on time.
Michelle Russell, director of investigations, monitoring and enforcement, said: ‘As a result of our inquiry, the charity’s trustees have now taken steps to improve its governance. We expect the trustees to continue to protect the charity’s identity, and comply with charity law, so that the charity can have a positive impact on people’s lives.’
Report by Pat Sweet