Decision

Charity Inquiry: double defaulter charities between April 2019 and March 2020

Published 6 July 2020

This decision was withdrawn on 13 July 2022

This Inquiry has been archived as it is over 2 years old.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 out more about preparing a charity 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. In order to ensure the inquiry’s strategy continued to be risk-based and proportionate, it was updated on 1 November 2019 to consider additional factors, when deciding which charities to bring into the inquiry.

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 £11 million of charitable income in respect of 49 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 2019 – March 2020):

• 77 charities, listed in Annex A, submitted their outstanding annual documents and continue to operate as charities. This resulted in over £35 million of charitable income being accounted for
• 26 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
• 5 charities under the class inquiry were referred to a separate inquiry during the reporting period

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

Any regulatory issues arising from the inquiry’s scrutiny of the annual documents received 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. The five charities that were referred to a separate inquiry during the reporting period are as follows:

The Jalloh Charitable Trust – 1145466

Regulatory concerns were identified regarding the administration of the charity following an examination of its accounts. A separate inquiry was opened on 21 May 2019.

See the published press release into The Jalloh Charitable Trust dated 27 June 2019 for further information.

Kinson Community Association – 215169

The charity failed to file accounting documents in accordance with statutory requirements for three consecutive years. A separate inquiry was opened on 19 September 2019.

See the published press release into Kinson Community Association dated 23 October 2019 for further information.

CWM Harry Land Trust Limited – 1100899

The charity failed to file accounting documents in accordance with statutory requirements for three consecutive years and concerns were raised over a number of related party transactions. A separate inquiry was opened on 19 September 2019.

See the published press release into CWM Harry Land Trust Limited dated 11 October 2019 for further information.

The Retreat Animal Rescue – 1105654

Regulatory concerns were identified regarding its financial operations and governance following an examination of the charity’s accounting documents. A separate inquiry was opened on 13 November 2019.

See the published press release into The Retreat Animal Rescue dated 19 December 2019 for further information.

The Barry Green Memorial Fund – 1000492

Regulatory concerns about the charity’s governance – in addition to the failure to file accounting documents in accordance with statutory requirements for two consecutive years – were identified, including potential unmanaged conflicts of interest and concerns over the charity’s financial management. A separate inquiry was opened on 4 March 2020.

See the published press release into The Barry Green Memorial Fund dated 1 May 2020 for further information.

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, a further £46,603,580 of charitable income is now accounted for (£11,593,931 at the pre-inquiry stage and £35,009,649 at the inquiry stage).

The Commission also arranged for 26 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 under section 52 of the Charities Act 2011 (‘the Act’) 61 times during the period 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 inquiry’s examination of the annual documents once they were received.

The inquiry exercised powers under section 84 of the Act 37 times during the period 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 77 charities submitted their outstanding annual documents and continue to operate as charities:

The Community of Grace: 519849

Al-Insan Foundation: 1122896

Oxwich and Penrice Youth Club: 524207

Salts Juniors Football Club: 1104548

Bethel Community College Limited: 1093154

Yetev Lev Youth Club: 295213

Regency Foundation Network: 1074588

Rookwood Foundation Ltd: 1116094

Maidenhead United Reformed Church Charity: 1147909

Lampeter Christian Centre Canolfan Gristnogol Llanbed: 1093291

The Ellis Foundation: 283715

Durham and Darlington Domestic Abuse Service: 1162337

West Cumbria Achievement Zone: 1125137

Re-Leased Properties: 1131254

Woodston Nursery: 1033699

Walton Youth Project: 1057446

Community Accountancy Self Help: 1091492

The Madina House Trust: 1082055

Lifecare UK: 1113964

The St Michael’s Community Centre: 287883

New Millside Pre-School: 1031538

The Vascular Surgery Research Fund: 516785

The Anne and John Walters Charitable Trust: 1040859

Congregation of The Canonesses Regular Hospitallers of The Mercy of Jesus of The Order of St Augustine at Waterloo: 232621

Scarborough And District Mencap: 240354

The Abbeyfield Scarborough Society Limited: 214679

The Abbeyfield Southport Society Limited: 502123

Sikh Arts and Cultural Association: 1099447

Bread of Heaven International Ministries: 1140887

Acorn2oak Preschool: 1029700

Pant Pandas Childcare Centre: 1022072

Compass Bridge Ltd: 1146917

Ladybarn Community Association: 700038

Hillel House (Manchester): 250760

Royal College of Defence Studies (RCDS) Officers’ Mess: 1129968

The Abbeyfield Bognor Regis Society Limited: 202045

Sywell and Overstone Pre-School: 1026325

Islamic Education Centre and Mosque: 1150827

Potters House Christian Fellowship UK Reading Church: 1127496

Little Learners, Woolwich: 1059358

Sikh Association Kingston: 286079

Shree Swaminarayan Satsang (S.S.S): 1092679

Caban Cegin: 1152087

The Buddhapadipa Temple Trust: 1142864

Artery – The Association for Research into Arterial Structure and Physiology: 1162426

The Egerton Road Trust: 1057841

The Silk Trust: 1089728

The Society of Clinical Perfusion Scientists of Great Britain and Ireland: 270473

Enfield and Cheshunt League of Hospital Friends: 262482

Gloucester United Schools: 311744

Jesus The Voice of Hope Global Ministries: 1143442

The Alamiyah Institute: 1108374

President of The Regimental Institute (PRI) Light Dragoons: 1140828

Stem Team East: 291332

Iqra Education Centre: 1136368

The Leon And Bertha Gradel Trust: 263745

Park Hall Community Association: 1058425

Reifer Memorial Limited: 1049361

Werneth Jamia Masjid: 1137058

Terrace Limited: 1068555

Animal Samaritans Midlands Trust: 1058312

Littlestones Pre School: 1027256

Mudita Trust: 1029665

Alderson Disabled Ex-Service Men’s Homes Trust: 216803

The Penywaun Enterprise Partnership: 1062754

Baldock Community Association: 279196

Christ Tabernacle - People Who Care: 1082153

Nomansland Sports Association: 285356

Guide Association Buckinghamshire: 308309

The Holy Pentecostal Church of Christ (Aladura) Trust: 1080893

Madni Muslim Community Centre Trust: 1155972

Albion Kids Show (Mobile Play in Hackney): 289755

Nottingham Trent Valley Methodist Circuit: 1139890

Cleveland Housing Trust Limited: 1059437

War Memorial Hall at Platt: 302897

Middle Wallop PRI: 1128744

Redhill Baptist Church: 1130958

Annex B

The following 26 were found to have ceased to operate and were therefore removed from the register of charities.

Redbridge Society for Mentally Handicapped Children and Adults: 243815

The Catholic Truth Society Welsh Province: 517983

RMIG Endowment Recreation: 1080237

Darton High School General Fund: 1062490

Coten End Playgroups: 1136227

Point Blank Theatre Company Ltd: 1073443

Sudan Organisation Against Torture: 1040432

The Association for the Development of the Arts in Northwich: 513298

St Antony’s Governor’s Maintenance Fund: 1105678

The Shechem House Trust: 288193

The Abbeyfield Bedford Society Limited: 265509

The Chris Jones Riders Fund: 1123403

Broughton Road Pre-School: 1035028

The York Association for the Care and Resettlement of Offenders: 500764

Kingmoor Oak Tree Club: 1086765

King’s Lynn Arts Centre Trust: 1142093

The Dorset Attention Deficit/Hyperactivity Disorder Support Group: 1067658

Stevenage and North Herts. Womens’ Resource Centre Group: 1052637

Cowgate Community Forum: 1099109

Ravenscourt: 1000296

Vital Regeneration: 1110882

Gateway 2 Recovery: 1161636

Touchstones12: 1097244

Association of Surgeons in Training: 274841

Central London Community Law Centre Limited: 299071

Vision Gospel & Educational Ministries Ltd: 1048065