Trustees removed after cash couriering at charity

The Charity Commission has dissolved a poverty aid charity after charitable funds were misused and cash was taken overseas, while trustees were using funds for personal expenses

Worldwide Ummah Aid (WUA), a charity which operated to relieve poverty in Eastern Europe and the Middle East and was set up in 2012, has been dissolved with two trustees (B and C) removed as trustees from the charity by the Commission and one removed (A) by fellow trustees, following an investigation by the Charity Commission.

The Commission first engaged with the charity after Trustee A was stopped by the police at Heathrow airport in 2014 carrying a significant amount of money in cash, purportedly for the charity. Trustee B, travelling on the same flight, appeared to have no knowledge of this. The Commission subsequently launched a statutory inquiry.

The inquiry found evidence of misconduct and/or mismanagement in the charity’s administration by the trustees. Trustee A was the sole signatory of the charity’s bank account for transactions up to £15,000 and bank statements showed money has been withdrawn in cash amounting to over half of the charity’s total income. Many of these transactions occurred in the days preceding a flight to Turkey by Trustee A.

During a books and records inspection at the charity’s premises on 25 November 2014, the inquiry analysed receipts and invoices which showed a lack of evidence of what the charity’s funds were actually spent on, in addition to a number of cash withdrawals amounting to £57,000 that were unaccounted for.

The Charity Commission investigation report stated: ‘Failure to maintain and preserve accounting records in respect of the charity’s income and expenditure is evidence of failure on the part of the trustees to comply with the record keeping requirements in sections 130 and131 of the Charities Act 2011 and clause 8.10 of the charity’s governing document.’

There was also evidence of poor financial management and governance in the charity, including:

  • money spent between August 2012 and March 2015 was not accounted for;
  • some invoices appeared for personal expenditure like a TV, DVD player and dental work; and
  • the charity was making loan repayments on a Mercedes car, owned by Trustee A.

Trustees B and C allowed large sums of money to be withdrawn and taken in cash overseas by Trustee A, with no due diligence or checks on the end use of the charity’s funds.

This resulted in Trustee A being removed from the charity by the other trustees, and subsequently automatically disqualified as a result of regulatory action in another statutory inquiry. The Commission used its powers to removed trustees B and C from serving as trustees.

Following an application for dissolution of the charity by the remaining trustees, WUA has been removed from the register, with its charitable funds redistributed to another charity.

Amy Spiller, head of investigations team at the Charity Commission, said: ‘The trustees of WUA were reckless with charitable funds and acted against Commission advice by carrying cash overseas. This practice is high risk and put valuable charitable funds in jeopardy.

‘Through their misconduct and mismanagement the trustees jeopardised the trust that donors placed in those responsible for the charity. It’s therefore right that the Commission acted to disqualify the trustees responsible.’

All charity trustees are under legal duties to safeguard their charity’s money and assets and to act prudently.

Charity Commission statement of inquiry report, WUA

Report by Sara White

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