Official warning to Maidenhead charity over accounting failures

The Charity Commission has issued an official warning to the Islamic Trust (Maidenhead) after finding misconduct and mismanagement in the administration of the charity

The Commission opened an inquiry into the charity in April 2017 after its trustees failed to file its statutory returns for 2016 on time, despite having previously been part of the Commission’s class inquiry into double defaulters and providing assurances to the Commission that they would not default again.

Following action by the Commission, the charity submitted its accounts for the financial year ending 31 March 2016. The Commission’s accountant identified that they were deficient and did not comply with the requirements of the statement of recommended practice (SORP). Most notably the accounts failed to show restricted funds separately and wrongly categorised costs as governance whereas they were charitable or support costs.

Further investigation also found the charity had no records of the due diligence carried out in respect of its partners, including those who speak at the charity’s events.

While the mandate to the charity’s main bank account showed that there were four signatories to the account, only one was identified as a current serving trustee with the other three leaving the charity in 2014 and 2016 respectively. This contradicted the assurances given by the trustees that there were three trustees on the charity’s bank mandate.

No records were kept as to the location of the charity’s collection boxes in a number of shops in the Maidenhead area, and its donation page on its website did not provide the necessary information about its registration and other details.

The inquiry concluded that the trustees did not properly discharge their duties under charity law, and identified failures in governance, including not submitting SORP-compliant accounts.

The Commission has issued the charity with an official warning, setting out that the trustees must take all reasonable steps to ensure that future statutory returns are submitted on time.

Michelle Russell, the Charity Commission’s director of investigations, monitoring and enforcement said: ‘Keeping detailed financial records and filing accounts on time, in addition to being a legal requirement for charities with an annual income over £25,000, is crucial to being able to evidence your charity’s effectiveness to donors, beneficiaries and the regulator.

‘It’s also necessary to show that charitable funds are being spent on legitimate causes. In this case there were clear failings in the charity’s financial management and overall governance, despite receiving previous advice from the Commission as part of our double defaulters class inquiry.

‘The trustees also failed to keep records of their wider decision-making which meant they were unable to show that they acted reasonably, in the best interests of the charity and took advice where appropriate.’

Charity Inquiry: Islamic Trust (Maidenhead) is here.

Report by Pat Sweet

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