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This publication is available at https://www.gov.uk/government/publications/charity-commission-finds-prince-andrew-charitable-trust-trustees-breached-charity-law-over-payments-to-trustee/regulatory-compliance-case-prince-andrew-charitable-trust
Charity Commission finds Prince Andrew Charitable Trust trustees breached charity law over payments to trustee
£355,297 returned to the charity following charity watchdog’s intervention
The Charity Commission has identified, and resolved with the charity, financial concerns relating to the Prince Andrew Charitable Trust (290140), after it found the charity breached charity law.
As a result of this work, £355,297 has been returned to the charity, which will be redistributed towards causes in line with the charity’s purposes. The current trustees acted to rectify this matter once it was identified by the Commission.
The Prince Andrew Charitable Trust supported the Duke of York’s charitable work in the areas of education, entrepreneurship, science, technology and engineering.
The Commission identified concerns about a former trustee being paid by the charity’s 3 trading subsidiary companies as a director of those companies. The former trustee was an employee of the Duke of York’s Household and from April 2015 to January 2020 undertook work for the trading subsidiaries. The Duke of York’s Household was then reimbursed for a proportion of this employee’s time by the subsidiaries after the year end. These payments totalled £355,297.
Trustees cannot be paid to act as directors of a subsidiary company, unless there is authority from the charity’s governing document or the payments are authorised by the Commission or the court, none of which were in place at the charity.
Trustees also have a duty to act with reasonable care and skill, taking account of any special knowledge, skill or professional status. This board of trustees, which included a lawyer, was expected to have had the knowledge and experience to act in accordance with charity law.
This issue came to light after the charity reported to the Commission a potential reputational risk arising from significant media coverage of an interview with the Duke of York, broadcast by the BBC, in November 2019. The Commission found that resulting action taken by the charity and its subsidiaries was appropriate.
However, proactive examination of the charity’s accounts and records at the time identified other issues of concern that required further attention.
- the charity could not show that conflicts of interest relating to the payments received by a trustee were managed adequately at trustee meetings
- there was no standalone conflicts of interest policy at the charity for trustees to refer to
- open and fair competition was not conducted before the trustee was appointed to the roles at the charity’s subsidiaries
- no evidence was obtained to demonstrate that these payments to the trustee provided value for money for the charity
On the payment to a former trustee, as a result of the Commission’s work, the full amount has been paid to the charity by the Duke of York’s Household, which the charity disclosed in its 2019 accounts. The charity also confirmed it was taking steps to ensure conflicts are now properly managed.
The charity has notified the Commission of its intention to wind up. The remaining charitable funds will be distributed to other charities with similar objects and the charity will request to be removed from the register once this is complete.
Helen Earner, Director of Operations at the Charity Commission, said:
Charity is special – with unpaid trusteeship a defining characteristic of the sector. By allowing the payment of a trustee via its subsidiaries the Prince Andrew Charitable Trust breached charity law and by insufficiently managing the resulting conflict of interest from this payment the trustees did not demonstrate the behaviour expected of them.
We’re glad that concerns we identified are now resolved, after the charity acted quickly and efficiently to rectify these matters. The recovered funds will now go towards the causes intended, and we will continue to work with the trustees as they wind up the charity.
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