In 2016 the Charity Commission opened a compliance case into the charity following receipt of an anonymous complaint which made allegations that a trustee was receiving personal benefit from the charity in the form of family holidays and designer handbags.
The charity inquiry found a number of issues, including the trustees expending funds renovating part of the school site to create a residential facility for respite care. This represented a breach of trust as this activity was not in furtherance of the charity’s objects at that time. The inquiry used its powers to appoint an interim manager and those action contributed to the improvement of the charity’s overall financial position. Putting the charity back on track ensuring that a school providing much needed education for children with special needs can now continue on a secure footing.
The wider learning for the sector identified through this charity inquiry, highlighted that :
- Trustees must use their charity’s funds and assets in furtherance of the charity’s purposes. This means ensuring the charity funds are used in accordance with the terms of the charity’s governing document and in accordance with the requirements of any contractual obligations.
- Trustees must ensure that their charity has adequate financial and administrative controls in place, and that the funds of their charity are applied for the benefit of the public for which it has been set up. This includes reporting sufficient information at trustee meetings to satisfy them that the controls are being properly implemented.
- Trustees have a legal duty to act in their charity’s best interests when making decisions as a trustee. Including making sure where a trustee has a personal or other interest, that a conflict of interest is managed appropriately. For example states that trustees cannot receive any benefit from their charity including in return for any service they provide to it, unless they have legal authority to do so.
- Charity trustees are responsible for the beneficiaries of the charity and must ensure that there are policies, processes and procedures in place to adequately ensure the safety, welfare and well-being of those beneficiaries. Charity trustees should take steps to regularly review, and if necessary, update any policies, processes and procedures.
Further details regarding the inquiry can be found here:
https://www.gov.uk/government/publications/charity-inquiry-hope-house-school-limited/charity-inquiry-hope-house-school-limited
If your charity would like any help with reviewing the wider learning in context to your charity’s circumstances, please get in touch via VAL’s helpline
https://valonline.org.uk/contact/