Former trustees of a charity based in the Scottish Highlands did not understand they were acting as trustees, according to an inquiry report from Scotland’s charity regulator.
OSCR found that many former trustees of Dudgeon Park Community Centre, based in Brora, in the Scottish Highlands, had become involved in it as a result of their support for Brora Rangers football club.
The regulator found that the former trustees did not understand that they had legal duties as members of the charity’s board and that the football team’s social club had been licensed to serve alcohol, which OSCR does not consider a charitable activity.
OSCR found the former trustees did not fulfill their legal duties to act in the interests of the charity.
It also found they had given no consideration to operating the social club through a trading subsidiary company.
Money transferred during pandemic
The charity applied to OSCR for consent to dissolve, which was originally granted in February 2022, but the regulator received concerns that the application had been submitted by one trustee without the knowledge of other trustees.
It then prompted the regulator to open inquiries into the charity.
The regulator found that the charity had transferred cash to the football club, and that the charity had applied for and was given grants from Highland Council to support it through the Covid-19 pandemic.
Looking at the charity’s bank statements, OSCR found that it had transferred substantial sums to the football club during the pandemic.
The regulator contacted the former trustees, who gave conflicting reasons for the money the club had received including that it was for repair and refurbishment of the premises following flood damage and payment for rent arrears.
None of the annual accounts submitted by the charity to OSCR detail rent as expenditure, the regulator found, and there did not appear to have been a lease in place between the charity and the owner of the facility, the football club.
OSCR concluded that the operation of a social club licensed to serve alcohol is not a charitable activity, and there is no evidence of any other activities in furtherance of the charity’s charitable purposes.
The regulator stated: “It is neither necessary nor proportionate to take formal enforcement action in relation to the failure of the former charity trustees to meet their charity trustee duties.
“We have issued them with a letter explaining we would expect all of the former charity trustees to undertake some form of charity trustee training before considering any further appointments as charity trustees and have provided them with links to our guidance and good practice for charity trustees.”
The new trustees of the charity decided to cease the operation of the social club, and the football club took over the responsibility for the operation of it.
OSCR gave consent to wind up the charity in January 2023.
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