A Jewish educational charity is now operating with new management after the Charity Commission found “serious mismanagement” from its former trustees.
The commission said the Knightland Foundation is now back on a “stronger footing” with a new set of trustees after it found previous management failed “to identify and manage conflicts of interest”.
The regulator published its statutory inquiry decision on 15 November, which also states that there was a lack of transparency in how the charity was operated, particularly on decision-making when it came to financial transactions involving substantial amounts of charity funds.
These actions caused the charity’s funds to be at considerable risk, the regulator’s report states.
It found that when the charity needed to make large payments, the transactions were “routinely transferred” to a private company owned by one of its former trustees in order to take advantage of the company’s cheaper rates for transfer of funds.
This placed the charity’s fund at risk as it was no longer under the control of former trustees, the report stated.
The foundation also signed a £1.25m loan agreement with a subsidiary company that it was jointly owned by the charity and by one of its trustees with their position being the 50% shareholder in the subsidiary company, the report found.
The regulator concluded that former trustees had failed to identify and manage conflict of interest and continued to do so despite its imposition of an action plan in March 2017.
Series of investigations
The commission has been investigating the charity since 2016 on issues like finance and governance including its failure to submit account records for the year to 31 January 2015.
It appointed two interim managers to oversee the charity’s operation and management in 2021, to the exclusion of its previous trustees.
Five new trustees were appointed to the charity in April 2023, while on the same day, three of its former trustees resigned. The following day, the regulator suspended another former trustee as it continued its inquiry.
The latest report concludes that while there had been no misapplication of funds by former trustees, they had placed the charity’s funds at unnecessary risk and demonstrated “failure to identify and manage conflicts of interest and wholly inadequate record keeping”.
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