Press release

Class inquiry update: 4 new reports

Charity Commission publishes inquiry reports into double defaulting charities.

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The Charity Commission, the independent regulator of charities in England and Wales, has today published inquiry reports into four of the charities that were under investigation as part of the Commission’s class inquiry into double defaulting charities.

33 charities which have entered the class inquiry since September 2013 have now complied with their reporting obligations, and 4 of these are reported on today:

The regulator’s reports conclude that the charities’ trustees were in default of their legal obligations to file accounting information with the Commission, and this was mismanagement and misconduct in the administration of the Charity and a breach of trustees’ legal duties.

As part of the investigations, the Commission issued orders to obtain bank records and financial information for all four charities (see endnote 1). In addition, the regulator exercised its statutory power to direct the trustees of three of the charities to prepare and submit the missing information (see endnote 2), as well as providing regulatory advice and guidance about the trustees’ duties to file the Charity’s annual accounting information.

Once the charities’ missing documents were submitted, the accounts were referred for scrutiny by the Commission’s accountants and any issues arising have been or are being followed up separately.

The reports include the responses from the trustees of some of the charities about why the accounts were submitted late. Staff absences, public holidays and waiting for information from accountants were offered as the reasons. Even if reporting responsibilities are given to professional advisers, ensuring the accounts are submitted on time remains the legal duty of the charity trustees. Failure to submit annual documents when required to the Commission is a criminal offence and the regulator says that it amounts to mismanagement and/or misconduct in the administration of a charity.

The first phase of the inquiry, targeting ‘double defaulting’ charities with an income over £500,000, began on 20 September 2013, when the class inquiry opened. The Commission started the second phase on 11 November 2013, focusing on charities with a last known income of between £250,000 and £500,000. For the most recent phase in 2014 the Commission has continued to look at the higher income charities, with last reported incomes of £250,000 and above and the names of those charities which entered the inquiry in April and May 2014 (this financial year) are published today.

Michelle Russell, Head of Investigations and Enforcement at the Charity Commission, said:

These reports show that some charities are still ignoring their legal responsibilities and making excuses as to why their accounts are late. It is simply not good enough to blame public holidays, absences and delays from other people; charities have ten months to prepare the accounts and returns, get them approved and where necessary audited or examined. The responsibility rests with trustees to ensure they start the submission process early enough to ensure their accounts and returns are in before the deadline expires. Some trustees do not seem to be taking seriously enough their accountability to the charity’s donors, and the general public. Most charities get this right; those who do not are letting themselves, the public and the sector down.

It is difficult to understand why some charities take the duty to file with Companies House more seriously, though this may explained by the fact that Companies House can issue fines for late filing in some cases. But these charities in default should remember that there were just under 300,000 views of the Register of Charities in May 2014 alone. Members of the public are making checks on the charities they donate to, meaning that not only does non-compliance reflect badly on trustees; it may put people off donating.

As a result of the Commission’s class inquiry, 64 sets of accounts have been filed by those charities no longer part of it, resulting in over £42 million of charitable funds now being accounted for on the public register of charities.

The four inquiry reports today can be viewed on the Charity Commission website.

The Commission is also making public the names of the charities which entered the class inquiry in 2014, to date.


PR 53/14

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Notes to editors

  1. The Charity Commission is the independent regulator of charities in England and Wales.
  2. Our mission is to be the independent registrar and regulator of charities in England and Wales, acting in the public’s interest, to ensure that:
    • charities know what they have to do
    • the public know what charities do
    • charities are held to account


1 The Commission used its information gathering powers under section 52 of the Charities Act 2011 (‘the Act’) to order and obtain bank records and financial information.

2 The Commission exercised its powers under section 84 of the Act to direct trustees of Haringey Education Business Partnership Limited (1031725), First Asian Support Trust (FAST) Limited (1095379) and Sheffield Reclamation Limited (1025612) to prepare and complete the relevant missing annual accounts, reports and returns for the Charity and provide copies of these to the Commission.

Published 27 June 2014