Issues for the wider sector
The Commission found trustees’ misconduct and/or mismanagement caused significant financial losses, from which the charity was unable to recover. Mr Nathan Rahulan and Mrs Padma Rahulan had been trustees of the Hindu Community Society since it was registered in 2010. But they mismanaged the charity’s finances by obtaining finance to buy a property on terms the charity could not afford to repay, without consulting with the other trustees or seeking financial advice.
The issues for the wider sector section of the inquiry is to highlight the broader issues arising from the Inquiry that may have relevance for other charities.
These being that Charity trustees have a general duty to manage their charity’s resources responsibly, reasonably, and honestly. This means not exposing their charity’s assets, beneficiaries, or reputation to undue risk. It is about exercising sound judgement and then taking decisions that a reasonable body of trustees would do.
Trustees are collectively responsible for their charity and ultimately accountable for everything done by the charity and those representing the charity. Trustees must actively understand the risks to their charity and make sure those risks are properly managed; the higher the risk, the greater the expectation and the more oversight is needed.
The Commission has produced guidance to assist trustees in implementing robust internal financial controls that are appropriate to their charity.
This guidance, Internal Financial Controls for Charities (CC8) is available here.
Details of the inquiry can be found here: https://www.gov.uk/government/publications/charity-inquiry-hindu-community-society?
Including the press release.