Charity inquiry – learnings for the wider charity sector

On 19 March 2021 the charity commission published its decision to the Charity Inquiry of the Orphan Relief Fund and Charitable Trust.

The charity was established to support young people suffering after the loss of one or more of their parents. It operated exclusively in Iraq.

A Charity Commission inquiry has found that over £1m in the Orphan Relief Fund and Charitable Trust’s funds could not be properly accounted for. The funds were claimed to have been sent to Iraq.

Five trustees have been removed or disqualified for their actions and the charity has been wound-up by Order of the Commission and removed from the register.

From a wider learning perspective the commission reminds us that trustees:

  • Are jointly and equally responsible for the management of their charity.  To be effective and to meet their statutory duties as charity trustees they must contribute to the management of the charity and ensure that it is managed in accordance with its governing document and general law.  They should be able to devote sufficient time to enable them to play a full role.
  • Must ensure that their charity has adequate financial controls in place. Charities are accountable to their donors, beneficiaries and the public. The Charity Commission has produced the Internal Financial Controls for Charities (CC8) guidance. Within the guidance, there is a self-check-list for trustees which enables trustees to evaluate their charity’s performance against the legal requirements and good practice recommendations set out in the guidance. The internal financial controls guidance can be accessed here:

Details of the inquiry, including the wider learning can be accessed here.

The charity commission’s press release explaining the rest of the inquiry can be accessed here.

Previously we reported on the new 5 minute guides and videos that the charity commission have produced, which highlights the importance of trustees refreshing their knowledge. Especially in context to managing the charity finances. The article can be accessed here:

Local charities may wish to share this update with their trustee board.