Warning for charity trustee over governance failures

The Charity Commission has issued an official warning to a trustee of a Birmingham charity over concerns about governance failings, including late submission of its accounts, and the failure to implement an agreed business plan

Expectations (UK) provides social housing accommodation and assistance, and has been subject to a regulatory compliance case since August 2017 due to concerns about its governance and its viability.

It has failed to submit an annual return and accounts for the financial years ending March 2016 and March 2017, but its most recent return, for the year to March 2015, indicated an income of £3m.

Trustee Marc Blanchette has now been given an official warning after failing to cooperate with the Commission, and failing to comply with two formal action plans previously issued.

The Commission’s previous advice required the trustee to provide a business plan as evidence of its short and long term financial viability to provide the service and manage debts. Despite several requests, that plan was not provided until the Commission took steps to impose the official warning.

The regulator is also concerned about decision-making around an emergency loan provided by a company whose director is an associate of a former trustee. The decision to accept the loan was not documented, and so it is unclear whether the conflict of interest and/or loyalty was identified and properly managed.

As well as being in breach of its statutory duty to file an annual return and accounts for the financial years ending March 2016 and March 2017, the Commission said the charity had provided it with information that was inconsistent with that provided to another regulator also engaged with the charity.

The Commission said it is encouraged to see that steps have been taken to address its governance concerns, and that five new trustees have recently been appointed to the charity’s board.

Tracy Howarth, head of regulatory compliance at the Charity Commission said: ‘The public, and those that rely on the vital support of charities, expect high standards of integrity and accountability from those that run charities.

‘This trustee has failed to live up to those standards, exposing their charity to serious uncertainty and risk. This warning should serve as a reminder to all charity trustees that their work is of high importance, and that they will be held to account for compliance with their legal duties and regulatory advice.’

In issuing the warning, the Commission has set out action that should be taken to address its regulatory concerns, including carrying out a governance review, filing the outstanding accounts and submitting a business plan to the Commission. It says it expects the newly appointed trustees to address its concerns as a matter of priority.

Howarth said: ‘We want to see all charities thrive, so I welcome the arrival of new trustees at Expectations UK. This should signal a watershed moment for the charity, and I expect the new board to take swift steps towards tightening its governance and management. ‘Charity trustees should at all times consider the needs of their beneficiaries, and be driven by their charitable purpose and mission in everything they do.’

Official warning is here.

Report by Pat Sweet

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