Trustees and former trustees have repaid nearly £1m to a grantmaking charity after receiving unauthorised payments, according to an inquiry report published this week.
This is the first time since at least April 2011 that the Commission has published an inquiry report without naming the charity.
The Commission said it has not named the charity involved because “it would be severely detrimental to the charity and its beneficiaries”.
Its usual policy after closing an inquiry is to publish a report naming the charity, to enable other charities to learn from the mistakes.
Inquiry details
The Commission opened an inquiry in February 2017 after the charities new solicitors asked permission for relief from liability for the unauthorised payments and permission to sell 99 per cent the shares in a subsidiary company.
It found that three trustees had received unauthorised payments totalling £650,000 for acting as consultants to its wholly owned subsidiary.
The inquiry found that the charity had not managed the conflict of interest and could not demonstrate that accurate records had been kept.
It said that trustees had made “honest mistakes” and that trustees have agreed to seek the recovery of the £650,000 and adopt a conflicts of interest policy. The money has now been repayed.
The Commission gave its consent for the charity to sell its shares in the subsidiary, resulting in a further £350,000 going to charity.
Harvey Grenville, head of investigations and enforcement at the Charity Commission, said: “Actively managing conflicts of interest is a fundamental principle of trustee decision making. We recognise that trustees are human beings who may make honest mistakes, but the bottom line is that you must always act in the best interests of your charity.
“Our intervention has allowed this charity to claw back a significant amount of money that can now go to charitable causes. I hope this will encourage other charities to be mindful of their duties and consult our guidance when making important decisions.”
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