In a formal report, the Commission came to the conclusion that the trustees of a charity with its headquarters in Birmingham were guilty of misbehaviour and/or mismanagement over financial and governance oversights.
One Community Organization, a charity that was established in 2009, plans activities and educational programs for the deaf/blind and community of students with special needs.
According to the results of the investigation, the trustees decided that since the charity lacked a bank card, the chair of the board would make payments on the organization’s behalf using his personal account.
The chair, however, would make his or her own reimbursements without the oversight or consent of another trustee.
Due to the trustees’ inadequate record-keeping, the inquiry was unable to draw the conclusion that the funds were used only to further the charitable organization’s objectives because they were unable to offer evidence to support the reimbursement of the roughly £100,000 spent in this manner.
The charity’s statements for the fiscal years ending in December 2017 and 2018 also did not reflect any transactions the chair made on the organization’s behalf using his personal bank account.
This indicates that they overstated the charity’s income and expenses for both years by between £70,000 and £80,000.
The statutory investigation also discovered that the trustees lacked a fundamental comprehension of the charity’s bylaws and their responsibilities as trustees.
This led to a number of governance problems, such as the charity operating outside the boundaries specified in its governing instrument, failing to recognize or handle conflicts of interest, and making decisions without the necessary number of trustees.
In order to improve the charity’s overall governance and decision-making processes, the regulator gave the trustees an Action Plan.
This plan included updating the charity’s financial controls policy, becoming familiar with Commission guidance on conflicts of interest, and hiring a professional accountant to help with record keeping and accounting duties.
The Action Plan was afterwards carried out by the trustees.
Amy Spiller, the Commission’s Director of Investigations, said:
Due to the trustees’ mistakes in this instance, a sizeable sum of donated money was missing.
This is unacceptable and represents misbehaviour or poor management.
I’m hoping that because of the Commission’s involvement in this matter, the organization will now be able to fulfil its philanthropic objectives and enhance the lives of the individuals it was founded to help.