Decision

Charity Inquiry: double defaulter charities between April 2018 and March 2019

Published 16 October 2019

This decision was withdrawn on 18 January 2022

This Inquiry report has been archived as it is over 2 years old.

Background

All registered charities must provide information annually to the Charity Commission (‘the Commission’). The rules vary according to the charity’s size and structure. Registered charities with:

• income up to £10,000 should complete the relevant sections (income and expenditure) of the annual return
• income above £10,000, and all Charitable Incorporated Organisations (‘CIOs’), must prepare and file an annual return
• income above £25,000, and all CIOs, must also file copies of their trustees’ annual report and accounts

Find further information about preparing an annual return

There is public interest in the issue of charities’ non-submission of annual returns, reports and accounts (‘annual documents’), particularly where the non-compliance is over a long period of time. As a result, on 20 September 2013, the Commission opened a statutory class inquiry (‘the inquiry’) into charities that were in default of their statutory obligations to meet reporting requirements by failing to file their annual documents for two or more years in the last five years and met certain criteria, including that:

• the charities were recently (or in the case of charities that would become part of it in due course, would be) given final warnings to comply by a specified date
• on the first working day after the specified date the charities were still in default (partially or otherwise)

The inquiry periodically identifies and brings charities into it that meet the criteria and have a last known annual income over a certain threshold.

Pre-Inquiry stage

Work carried out at the pre-inquiry stage by the Commission includes issuing a final warning to charities that they will be placed into the inquiry if they fail to submit outstanding annual documents by a specified date. A number of charities proceed to submit their outstanding documents within the Commission’s deadline. The impact of the Commission’s work at the pre-inquiry stage during the reporting period was that over £37 million of charitable income in respect of 69 charities is now accounted for.

Issues under inquiry

The inquiry is confined to dealing with the charity trustees’ mismanagement and misconduct and remedying the non-compliance in connection with their failure to submit the required annual documents to the Commission within the statutory deadlines.

Misconduct includes any act (or failure to act) that the person committing it knew (or ought to have known) was criminal, unlawful or improper. Mismanagement includes any act (or failure to act) that may cause charitable resources to be misused or the people who benefit from the charity to be put at risk. A charity’s reputation may be regarded as property of the charity.

Findings

During the inquiry period (April 2018 – March 2019):

• 28 charities, listed in Annex A, submitted their outstanding annual documents and continue to operate as charities
• 28 charities, listed in Annex B, were found to have ceased to exist or do not operate and were therefore removed from the register of charities

This resulted in around £14.5 million of charitable income being accounted for.

More details about the charities listed in Annex A and B are available on the register of charities (‘the register’).

The Commission scrutinised the outstanding reports and accounts after they were submitted. Any regulatory issues arising from that scrutiny have been followed up with the respective charities separately.

Where the class inquiry identifies additional serious regulatory concerns these are referred for consideration under a separate statutory inquiry. Two charities under the class inquiry were referred to a separate inquiry during the reporting period:

Future Vision Consortium – 1152454

The charity failed to comply with its statutory accounting requirements, as it submitted accounting information for a different company instead of the charity’s information. A separate inquiry was opened on 14 August 2018.

See the published final report for Future Vision Consortium dated 16 August 2019 for further information.

Jalalabad Association – 1012090

The trustees had failed to submit the charity’s annual documents to the Commission for four consecutive accounting years. A separate inquiry was opened on 12 December 2018.

See the published press release for Jalalabad Association dated 8 January 2019 for further information. A final report is due to be published soon.

Conclusions

The trustees of the charities, listed in Annex A and B, were in default of their legal obligations to file their annual documents and keep their registered details up to date. The Commission regards this as mismanagement and/or misconduct in the administration of the charities.

As a result of the pre inquiry and inquiry work during the reporting period, the Commission ensured that those charities that continue to operate complied with their legal obligations to submit their annual documents. In total, £51,615,231 of charitable income is now accounted for (£37,125,755 at the pre-inquiry stage and £14,489,476 at the inquiry stage).

The Commission also arranged for 28 charities to be removed from the register which it considered had ceased to exist or did not operate.

Charities ceased to be part of the inquiry when they were no longer in default of their accounting obligations and filed the missing annual documents or the Commission was satisfied that they had ceased to exist or do not operate.

Regulatory action taken

The inquiry used the Commission’s information gathering powers 51 times under section 52 of the Charities Act 2011 (‘the Act’) to order and obtain bank records and financial information of the charities relating to the years with missing annual documents. These were used in connection with the Commission’s examination of the annual reports and accounts once they were received.

The inquiry exercised powers under section 84 of the Act 40 times to direct the trustees to prepare and complete the relevant missing annual documents for the charities and provide copies of these to the Commission. The Commission provided regulatory advice and guidance about the trustees’ duty to file the charities’ annual documents.

Issues for the wider sector

Failure to submit the annual documents to the Commission may be a criminal offence. The Commission also regards it as mismanagement and/or misconduct in the administration of the charity.

Providing timely, accurate and informative financial information that will help funders, donors, beneficiaries and others to understand the charity and its work will encourage trust and confidence in it.

Annex A

The following 28 charities submitted their outstanding annual documents and continue to operate as charities:

Bow Village Hall and Field: 1042466

Families Relief: 1037782

St Gregory’s Pre-School Ltd: 1124184

Hoddesdon (Community) Society of Performing Arts Ltd: 1131899

The William Heath Robinson Trust in Memory of Joan Brinsmead: 1011312

Noor El Islam Mosque: 701689

Alton Community Playschool: 1106438

Meenawala Charitable Foundation Limited: 1122455

Oxford University Boat Club Trust CIO: 1155662

Church of Christ The King, South East London: 294196

Plymouth Islamic Education Trust (PIETY): 1134986

The Eric Dando Trust: 1159605

Divine Solution Ministries: 1078438

Trimdon Station Recreation Ground: 1078669

The Italia Conti Academy Trust: 290261

Sikh Temple Trust, Nottingham: 512435

The Holy Angels Charitable Trust: 1115429

Central Jamia Mosque Rizvia: 1139907

The Isledon Community Nursery Trust: 1029478

Calder Kids Adventure Playground Association: 510711

The Wye Valley School Fund: 1067150

Happy Days Childcare: 1105598

International Anjuman-E-Khuddam-Ul-Sofia and Amir-E-Millat Trust Foundation: 1077431

Garston Animal Rescue: 701001

Stapleton House: 256170

Woodstock Girls School: 1070724

Kewford Eagles Football Club: 1154022

Belle Vue Community, Sports & Youth Centre Limited: 1099395

Annex B

The following 28 charities were found to have ceased to exist or do not operate and were therefore removed from the register of charities.

Challenge to Change: 1151046

Citizen Advocacy Trust Gloucestershire: 1041155

Northern Extreme Parks 1136884

East Barnwell & Abbey CIO: 1158614 (The Commission intends to dissolve the CIO charity after 3 months from the notice period, August 2019)

Swansea Community Chaplaincy Project: 1157744

Afro-Caribbean Project Oldham: 1064153

Ubah Education and Training Centre: 1146706

Swindon Racial Equality Council 900449

Owton Manor West Neighbourhood Watch & Residents Association: 1113663

Somaliland Birmingham Community: 1129846

Nine Acres Playgroup: 1024498

New Tidings Community Outreach Group: 1047733

Lumpy Hill Adventure Playground: 1129743

St Ursula’s Convent School, Wigton: 513330

Lancashire Family Mediation Service: 1041686

Hartlepool Advance: 1154345

Exeter Steiner School: 1070991

Disablement Information and Advice Line (Dial) Trafford: 516950

Deep Recording Trust: 1078495

Childrenplus: 1134689

Bethany Christian Community House Project: 1077364

The South Yorkshire Fire Service Historical Society: 515105

The Hampstead Garden Suburb Institute: 312951

Cyfle Cyntaf: 1112036

Nottingham Learning Trust: 1157528

Fabric-Forum for the Arts in Bradford Ltd: 1115616

Wigan Council for Voluntary Youth Service 1081178

Charles Benneh Ministries: 1108062