The Charity Commission has today closed a statutory inquiry into a Christian charity where trustees were forced by the regulator to repay £100,000 to the charity.

The charity is continuing to operate.

The Commission closed the inquiry into the Life Changing Ministries Church South Cheshire Trust having found that the charity did not have “proper financial controls in place”, such as policies on expenses. The Commission found that the charity was relying on credit and loans to operate and charity funds were being banked in personal accounts.

The inquiry concluded that the trustees “did not understand, identify or properly manage the conflicts of interest”; however the trustees disagreed with this.

A statement from the trustees said: “The inquiry came about as a result of complaints coming in about us, we believe from a subversive group. We received texts from one of their representatives to 'destroy us through official channels'.
 
“Our charity is dedicated to uphold 'the Protestant reformed religion established by law', the religion the Monarch is on oath to uphold in her Coronation Oath.

"The charity fully supports the right of individuals to choose, but is concerned that there are those in society who look to destroy others of different viewpoints and that this can be done through the application of the 'letter of the law'."

It said that the trustees believe that the Commission has applied a “contextual application of law rather than concentrating on narrow areas that if not put in context can look negative”. They said that because of this the trustees have questioned the Commission’s findings and that “this will be the basis of an official complaint”.

The Commission opened an operational compliance case into the charity in February 2012 following a complaint from a member of the public that trustees were personally benefitting from the charity’s funds. When two requests for a meeting with the charity were denied the Commission opened a statutory inquiry in October 2012.

In engaging with the charity, the Commission discovered that a loft conversion at a property owned by two of the trustees had been paid for from the charity’s funds, and that a property owned by the charity was sold to a trustee.

The inquiry investigated concerns over the sale of the property, concluding that it was made privately and the charity was not legally involved; however profits from the sale were donated to the charity and gift aid was claimed on this.

The inquiry advised the trustees to consider obtaining independent professional advice as to whether gift aid was properly claimed, which they did.

The trustees stated that they “are willing to repay the gift aid, on condition it is found to be the legal requirement".

The Commission inquiry also investigated further payments including £95,000 to a private trading company registered under the charity’s name, which was found to have been made in error, and payments totalling £72,000 to two trustees who were married.

The charity said that the trustee payments were for expenses incurred in the running of the charity from their private residential property. The inquiry ruled that these payments did not comply with charity law and this figure, plus £28,000 for the converted loft, should be repaid to the charity. These repayments were made in November 2013.

The Charity Commission also ruled that there were issues with conflicts of interest, however trustees responded stating: “How can there be conflicts of interest when the trustees are giving in more than they are taking out?”

Following the closure of the inquiry, the Commission is satisfied that charitable funds are being used for charitable purposes, but the charity has been placed in monitoring so the Commission can “continue to check progress and compliance by the trustees”.

Commission opens operational compliance cases

This week the Charity commission also opened an operational compliance case report into Bethel United Church of Jesus Christ Apostolic UK following the sentencing of a bishop to two years in prison for fraud by false representation and theft of £190,000. This theft was reported by the charity to the Commission, however following further engagement with the charity it identified further governance issues.

The Commission has also opened a second statutory inquiry this week into Ethiopian Orthodox Tewahdo Church; St Mary of Debre Tsion, after closing the first inquiry into the charity in May following an appeal by the charity to the Charity Tribunal.

It was opened again in October to investigate concerns arising from a “long-running disagreement over the trusteeship and management of the charity”. The charity has also persistently failed to submit annual accounts and annual returns to the Commission on time.