Decision

Charity Inquiry: double defaulter charities between April 2023 and March 2024

Published 7 June 2024

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 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, the Commission opened a statutory class inquiry (‘the inquiry’) under section 46 of the Charities Act 2011 (the ‘Act’) 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.

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 £31 million of charitable income in respect of 70 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 2023 to March 2024):

• 38 charities, listed in Annex A, submitted their outstanding annual documents, and continue to operate as charities - this resulted in £251,267,291 million of charitable income being accounted for
• 9 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
• 4 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 four charities that were referred to separate inquiry during the reporting period are as follows:

New Wineskins Charitable Trust - 1013750 and U-Turn Move On Homes - 1184318

These two charities are being treated together in a joint inquiry, as the charities are closely linked through their operation from the same premises, the sharing of some trustees and staff and similar additional regulatory concerns having been identified with them. The trustees failed to comply with statutory accounting obligations regarding submission of annual accounting documents, and to comply with the Charities Statement of Recommended Practice (SORP). These failures are symptomatic of wider administration and governance issues that have been identified at the charities. An inquiry was opened into the two charities, on 16 May 2023 and 9 November 2023, respectively. See the press release published on 3 July 2023 for further information.

The Queen Alexandra Cottage Homes - 209208

The trustees failed to comply with statutory accounting obligations regarding submission of annual accounting documents for the past four years. These failures are symptomatic of wider administration and governance issues that were identified at the charity. An inquiry was opened into the charity on 26 July 2023. See the press release published on 19 October 2023 for further information.

Devon Freewheelers - 1180264

The Commission identified inconsistencies in the charity’s accounts, and a number of related party transactions, following examination of its accounting documents. An inquiry was opened into the charity on 14 September 2023. See the press release published on 8 November 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 £282,640,926 million of charitable income is now accounted for (£31,373,635 at the pre-inquiry stage and £251,267,291 at the inquiry stage).

The Commission also arranged for nine 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 42 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 50 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, as well as supplemental advice and guidance as and when appropriate.

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 38 charities submitted their outstanding annual documents and continue to operate as charities:

God’s Church of Peace - 1022567

Carers Choice DGS - 1143325

Coniston Sports and Social Centre - 1121782

Oasis City Church - 1080646

Love Temple Christian Church (LTCC) - 1146397

Inspire Nottingham - 1129709

Sri Lankan Muslim Community of East London - 1131486

Werneth Jamia Masjid - 1137058

Congregation of Aden Jews in the United Kingdom - 252022

Baseera - 1144325

Dhamma Nikethanaya International Community Centre for Education Meditation Psychotherapy and Counselling - 1116187

Members Church of God International UK Chapter - 1120310

Ipswich and Suffolk Bangladeshi Muslim Community Centre and Mosque - 1104877

Levine Family Foundation - 1178749

The Spanish and Portuguese Jews Home for the Aged - 1162974

Telford Methodist Circuit - 1134372

St Mary and St Abraam Coptic Orthodox Church - 1003739

The Parochial Church Council of the Ecclesiastical Parish of Andrew’s Church of England, Starbeck in The Diocese of Ripon and Leeds - 1139696

Luton Tigers Limited - 1176801

The Maria Watt Birmingham Foundation for Childhood and Teenage Leukaemia - 1118733

The Montfort Missionary Society - 241963

Vibrance - 1152186

Didcot Partnership Schools’ Education Trust - 1161755

Becoming Visible Limited - 1117872

London International Model United Nations Foundation - 1159324

The University of Buckingham Foundation - 1094042

The University of Buckingham - 1141691

Veterans For Wildlife - 1167815

Shade - 1149699

Islamic Dawah Centre International - 1092139

Care International UK - 292506

Mecca Mosque - 515359

Chelsea Methodist Church and Pastoral Centre - 1140225

Stepping Stones Childcare (Cornwall) - 1154205

Karibu Education Centre Ltd - 1023182

Stanway Village Hall - 272860

The Frontline Club Charitable Trust - 1111898

Invicta East Kent Athletic Club - 1111561

Annex B

The following 9 charities were found to have ceased to operate and were therefore removed from the register of charities:

The Trust of Saint Michael The Archangel - 1050889

Stanley Hall - 239455

Longhill Ward Community Association - 1061036

Stoke College Educational Trust Ltd - 310487

League of Friends of London Road Community Hospital (Derby Hospitals NHS Foundation Trust) - 505089

St Augustine’s R C School Scarborough Fund - 1051579

Utsav Sangeet - 1137951

Red Row Welfare Ground - 1099539

Evelyn 190 Community Trust - 1049147