Decision

Charity Inquiry: double defaulter charities between April 2022 and March 2023

Published 15 May 2023

Applies to England and Wales

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

For further information see the Commission’s guidance on how to prepare 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. 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. Following receipt of the final warning, a number of charities proceed to submit their outstanding annual 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 £23 million of charitable income in respect of 40 charities is now accounted for.

Issues under inquiry

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

Findings

During the inquiry period (April 2022 – March 2023):

• 30 charities, listed in Annex A, submitted their outstanding annual documents, and continue to operate as charities. This resulted in £12,442,735 million of charitable income being accounted for
• 15 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
• 6 charities under the class inquiry were referred to 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.

Charities identified with serious regulatory concerns

Where the class inquiry identifies additional serious regulatory concerns, these are referred for further consideration and investigation under a separate statutory inquiry. The 6 charities that were referred to separate inquiry during the reporting period are as follows:

Four Paws Animal Rescue (South Wales) – 1117893

The trustees failed to comply with statutory accounting obligations regarding submission of annual documents. These failures are symptomatic of wider administration and governance issues that may persist at the charity. A separate inquiry was opened on 28 September 2022. See the press release published 3 November 2022 for further information.

The British School of Alexandria – 1089630

The trustees failed to comply with statutory accounting obligations regarding submission of annual documents. These failures are symptomatic of wider administration and governance issues that may persist at the charity. A separate inquiry was opened on 20 September 2022. See the press release published 27 October 2022 for further information.

Children Care Centre – 1014813

The trustees failed to comply with statutory accounting obligations regarding submission of annual documents. These failures are symptomatic of wider administration and governance issues that may persist at the charity. A separate inquiry was opened on 8 June 2022. See the press release published 28 June 2022 for further information.

The Saint George Educational Trust – 1043158

Serious regulatory concerns were identified in relation to activities carried out by the charity that do not appear to further its religious purposes. A separate inquiry was opened on 7 October 2022. See the press release published 1 November 2022 for further information

Dudley Central Mosque and Muslim Community Centre – 1127373

The trustees failed to comply with statutory accounting obligations regarding submission of annual documents. These failures are symptomatic of wider administration and governance issues that may persist at the charity. A separate inquiry was opened on 1 July 2022. See the press release published 24 August 2022 for further information.

Middlesbrough Central Masjid and Community Centre – 1137935

The trustees failed to comply with statutory accounting obligations regarding submission of annual documents. These failures are symptomatic of wider administration and governance issues that may persist at the charity. A separate inquiry was opened on 13 December 2022. See the press release published 15 February 2023 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 misconduct and/or mismanagement in the administration of the charities.

As a result of its 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 £36,095,158 million of charitable income is now accounted for (£23,652,423 at the pre-inquiry stage and £12,442,735 at the inquiry stage).

The Commission also arranged for fifteen 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; or other concerns were identified, and those charities were considered for further investigation.

Regulatory action taken

The inquiry used the Commission’s information gathering powers under section 52 of the Act 78 times 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.

The inquiry exercised powers under section 84 of the Act 70 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 30 charities submitted their outstanding annual documents and continue to operate as charities:

Vvoosh Charitable Foundation – 1168935

Saving Macedonian Strays – 1170041

London Festival of Baroque Music – 1160689

Lambeth Circuit Methodist Church – 1175488

Hanfi Sunni Muslim Circle- Raza Masjid – 1138795

The Parochial Church Council of The Ecclesiastical Parish of Stoke Poges, Oxford Diocese – 1129125

The Parochial Church Council of The Ecclesiastical Parish of Radipole & Melcombe Regis, Weymouth – 1131695

Akshar Educational Trust – 1023731

Wat Buddharam (London) – 1109531

The Parochial Church Council of The Ecclesiastical Parish of St Clement, Urmston – 1131185

The Banbury Museum Trust – 1153109

All Nations, One Love – 1141308

Citizens House – 1153267

President Of the Regimental Institute (PRI) Light Dragoons – 1140828

Action For Community Limited – 1142398

The Parochial Church Council of The Ecclesiastical Parish of Dorking Saint Martin – 1133695

Somali Parent’s Initiative – 1131234

Stepping Stones of Chester – 1070081

Bentley Social Welfare Centre and Recreation Ground – 523492

Warwickshire Constabulary Benevolent Fund – 504560

Horsham Youth Centre – 305379

Sikh Association Kingston – 286079

The Baltic Exchange Charitable Society – 277093

Lazonby Village Hall – 1169785

Cambrian Education Trust – 1096941

Adelaide Litten Charitable Trust – 219512

Powell’s Educational Foundation – 311701

Alfred Henry Goode Will Trust – 1075885

Thorney Island Nursery – 1062766

Assemblies of the First Born – 1156317

Annex B

The following 15 charities were found to have ceased to operate and were therefore removed from the register of charities.

ADREF Ltd – 703130

A C O R D – 283302

Global Human Development Foundation – 1158660

Banjo Island Community and Sports Association – 1137767

Ehsane Al-Mahdi Charitable Trust – 1113228

Alderholt Sunbeams and Supertots – 1030009

One-2-One 2000 Limited – 1155910

Nanyuki Show Ground (NSG) Canteen/Bar – 1132302

Brixton & Streatham Circuit – 1152238

Cenchrea Homes Ltd – 1142152

Malling Windmill Nursery – 1072022

Royal Society for The Prevention of Cruelty to Animals Suffolk East Coast Branch – 206576

Refeeah Trust – 1169452 (the Commission intends to dissolve the CIO charity after 3 months from the notice period)

Mifal Tzedukas – 1173641 (the Commission intends to dissolve the CIO charity after 3 months from the notice period)

Birmingham Wheels – 701209 (charity is in liquidation and will be removed when the liquidation process is completed)