The Charity Commission, the independent regulator of charities in England and Wales, has opened a new statutory inquiry into Rhema Church London (registered charity number 1075100). The charity’s objects include the advancement of the Christian religion. The inquiry opened on 3 August 2015 (see endnote 1).
The commission has been engaging with the charity as part of an operational compliance case since February 2015, after the charity’s auditor qualified its accounts for the year ended September 2013.The accounts and annual return were filed late and the auditor qualified the accounts on the basis that they had been unable to obtain sufficient audit evidence to quantify how much of the expenditure incurred on the charity’s credit cards of £203,707, and petty cash expenditure of £76,161, was incurred in accordance with the fulfilment of its objects. This included £86,055 relating to overseas development workshops. This raises regulatory concerns that charitable funds may have been misapplied.
Since then, the commission has been seeking to obtain information from the trustees to allay the concerns, including through an order made under section 52 of the Charities Act 2011, which the trustees only partially complied with during the operational compliance case.
The commission is also concerned by evidence it received in July 2015 which states that the trustees rejected the conclusion of the auditor’s report. This and the trustees’ failure to fully comply with the commission’s order raises further regulatory concerns for the commission.
The issues the inquiry will examine include:
- the administration, governance and management of the charity
- whether or not and to what extent there has been mismanagement and/or misconduct on the part of those acting in the administration and management of the charity
- whether the trustees are willing and able to take necessary action to rectify the problems within the charity
- the possible missappropriation and/or misapplication of the charity’s funds
- the charity’s financial controls and risk management policies
- the failure to comply with legal obligations in relation to the filing of the charity’s accounts and annual returns
In addition, the charity’s annual accounts for financial year ending 30 September 2014 are overdue and the annual return was filed 42 days late (see endnote 2).
The regulator stresses that opening an inquiry is not in itself a finding of wrongdoing. The purpose of an inquiry is to examine issues in detail and investigate and establish the facts so that the regulator can ascertain whether or not there has been misconduct or mismanagement; establish the extent of the risk to the charity’s property, beneficiaries or work; decide what action needs to be taken to resolve the serious concerns, if necessary using its investigative, protective and remedial powers to do so.
It is the commission’s policy, after it has concluded an inquiry, to publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were. Reports of previous inquiries by the commission are available on GOV.UK.
The charity’s details can be viewed on the commission’s online charity search tool.
Notes to editors
The Charity Commission is 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
- Section 46 of the Charities Act 2011 gives the commission the power to institute inquiries. The opening of an inquiry gives the commission access to a range of investigative, protective and remedial legal powers.
- Section 52 of the Charities Act 2011 gives the commission the power to call for documents.
- The commission’s decision to announce the opening of a statutory inquiry is based on whether it is in the public interest to do so and with consideration of our objective to increase public trust and confidence in charities.
The publication of this statement has been delayed as it was necessary for the inquiry to establish certain information with third parties.
Trustees of charities with an income of over £25,000 are under a legal duty as charity trustees to submit annual returns, annual reports and accounting documents to the commission within 10 months of their financial year end.