The Charity Commission is “urgently assessing” a charity which recently closed due to lack of funding, following allegations that charity money was spent on first-class train travel and personal expenses.
Broken Rainbow, which was the country’s only domestic violence charity specifically for LGBT people, went into liquidation on 3 June. It had previously threatened that it was days from closure in April, but was saved after receiving a Home Office grant.
A whistleblower for the helpline and advice charity has disclosed a number of internal files to Buzzfeed News which outline spending of charitable money on first-class travel, luxury gifts and office expenses.
They also show that grants received from the Home Office and Comic Relief were spent within 24 hours of payment, and were often used to cover running costs such as new computers.
The charity had received repeated demands from HMRC for unpaid tax and national insurance from staff salaries. The whistle blower also revealed that at times that charity had as little as £6 in the bank.
Additionally, thousands of pounds were spent on legal fees following a bullying allegation by a member of staff.
Other purchases put through as staff expenses included bunches of flowers, sweets, and meals out at restaurants.
The Home Office has said it will continue funding the helpline service through another LGBT charity Galop.
Buzzfeed News spoke to a number of former employees of the charity, which had an income of just under £278,000 in the year-ending March 2015, who made allegations of serious financial mismanagement and a failure of oversight by both its trustees and the Home Office. It likened the charity to the now defunct Kids Company, which closed last year despite receiving multiple large grants from the Cabinet Office.
The Buzzfeed News investigation stated that the whistle blower reported the charity to the Charity Commission earlier this year for financial misconduct but never received a reply. The Charity Commission has said it did not receive his letter.
A Charity Commission spokesman said: “The Commission received a complaint last year about the governance of the charity and alleged unauthorised payment of trustees. The Commission opened a regulatory compliance case and wrote to the charity in order to seek clarity on these issues. In June this year, a further complaint was made to the Commission.
"The Commission is urgently assessing these more serious concerns in order to determine what regulatory action may be required. We are also in contact with Home Office and the Official Receiver. The Commission’s case is ongoing.
“The Commission has not been able to trace two complaints which are said to have been submitted to the Commission. We urge those who have attempted to contact the Commission to resubmit their concerns and any relevant evidence.
“It is not the Commission’s policy to provide regular updates or ongoing commentary to all complainants.”
A spokesperson from the Home Office said that it would work with the Charity Commission to “determine an appropriate course of action for investigating Broken Rainbow’s collapse”.
The charity has been contacted for comment.
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