Decision

Charity Inquiry: Four Paws Animal Rescue (South Wales)

Published 26 August 2025

Applies to England and Wales

The Charity

Four Paws Animal Rescue (South Wales) (‘the charity’) was registered with the Commission on 08 February 2007. It was governed by a constitution adopted 4 December 2006. 

The charity’s objects were:

• for the benefit of the public to relieve the suffering of animals in need of care or attention and, in particular, to provide and maintain rescue homes or other facilities for the reception, care and treatment of such animals
• to provide care, protection and treatment for animals which are in need by reason of sickness, maltreatment or poor circumstance

The charity was removed from the register of charities on 05 November 2024 after it was wound up.

Background and Issues under Investigation

On 14 March 2022, because the charity had failed to submit the trustees’ annual report, accounts and annual return (‘accounting information’) to the Commission for the financial years ending (FYE) 31 December 2019 and 31 December 2020, the Commission placed the charity into a Double Defaulter Class Inquiry (‘class inquiry’).

The class inquiry is for those charities that are in default of their legal duty to file accounting information for two or more years in the last five years.

On 17 March 2022 the Commission issued an Order under section 84 of the Charities Act 2011 (‘the Act’) requiring the trustees to prepare and submit the outstanding accounting information for the FYE 31 December 2019 and FYE 31 December 2020 by 18 April 2022.

The charity failed to submit the required accounting information within the deadline set in the section 84 Order, despite repeated attempts to contact the trustees and request the submission of the information. Consequently, a decision was made to remove the charity from the class inquiry on 26 October 2022 as there were sufficient regulatory concerns to open a separate inquiry into the charity. 

On the 28 September 2022 the Commission opened a statutory inquiry (‘the inquiry’) into the charity under section 46 of the Act to examine:

• the extent to which the trustees are complying with their legal duties in respect of their administration, governance and management of the charity
• the extent to which any failings or weaknesses identified in the administration of the charity during the inquiry were a result of misconduct and/or mismanagement by the trustees
• failure to comply with their statutory reporting duties including the timely submission of the charity’s annual reports and accounts to the Commission
• failure to comply with an order of the Commission under section 84 of the Act

The Inquiry closed with the publication of this report.

Findings

The trustee’s compliance with their legal duties in respect of the administration, governance and management of the charity and the extent of failings and weaknesses at the charity.

Failure to comply with the charity’s governing document and charity law

The inquiry found that the trustees were operating the charity without the required number of trustees. The trustees were unaware of the provisions of the charity’s governing document and had not read the Commission’s guidance The essential trustee: what you need to know, what you need to do (CC3).

Article 16(5) of the charity’s Governing Document stipulates that there shall be not less than three trustees unless otherwise determined by a resolution of the charity in a general meeting.   

The Commission’s records show that since August 2019, the charity had only two trustees who are married to each other, following the resignation of another trustee.

The two remaining trustees advised the Commission that they had posted the need for additional trustees on Facebook but had failed to take any further substantive steps to remedy the issue of the trustee vacancy and appoint another trustee to allow the charity to operate in accordance with article 16(5) of its governing document.

This is a breach of the charity’s governing document, their trustee duties and responsibilities and is misconduct and/or mismanagement in the administration of the charity.

The trustees were asked how conflicts of interest were managed and advised that in such instances they would ask senior volunteers for input but that no minutes were made or retained for any meetings held. They were advised that a written policy regarding conflicts of interest should be set up to deal with this issue, but they failed to take the Commission’s advice on this matter.

The charity’s governing document (clause 23(3)) stipulates that the trustees must keep minutes of all meetings of the trustees and committees of trustees including the names of the trustees present; the decisions made at the meetings; and where appropriate the reasons for the decisions.   

The trustee’s failure to keep minutes of their meetings in accordance with the governing document is a breach of their trustee duties and is misconduct and/or mismanagement in the administration of the charity.

Failures to manage the charity’s resources responsibly

A review of the charity’s bank statements raised concerns regarding regular payments made to various organisations where it was not clear that they were made in furtherance of the charity’s objects.

The trustees were asked to provide various documents to clarify the purpose of the payments and why they constituted legitimate charitable expenditure. Although they submitted some documents, they were either unable or unwilling to provide the majority of the documents requested, despite repeated requests for the documents. This meant the Commission was unable to determine that all expenditures were made in furtherance of the charity’s objects.     

The Commission found that the trustees had been unaware of all the bank accounts held by the charity as accounts had been set up by their former treasurer and they were unable to access their online accounts. In addition, the charity’s banking mandates had not been amended following the resignation of their treasurer which meant that there was only one signatory for the charity.

The trustees were asked what the procedure for drawing cheques was. They advised that two signatories were necessary but that the former treasurer had pre-signed cheques which they had used as a method for paying large invoices.

The trustees were advised this practice was unacceptable as per 6.5 of Internal financial controls for charities (CC8), and the risks of fraud and financial mismanagement was explained to them.

Copies of cheques obtained by the inquiry indicated that pre-signed cheques had debited the charity’s account on/after the trustees had been told not to use pre-signed cheques on at least two occasions. This is mismanagement and/or misconduct in the administration of the charity, which is exacerbated by the fact that the trustees continued to do so after being told by the Commission not to continue this practice.

Failure to comply with statutory reporting duties including the timely submission of the charity’s annual reports and accounts to the Commission

The inquiry found that the trustees had consistently and repeatedly failed to meet the statutory reporting requirements for the charity, those being the obligation to prepare and submit an Annual Return, Annual Accounts and a Trustees Annual Report within ten months of the charity’s financial year end (‘FYE’). Charity trustees are under a legal duty to keep and maintain proper financial records and to ensure that their charity is accountable. This is also a requirement within the charity’s governing document.

The trustees advised that accounting information for the FYE 31 December 2019, FYE 31 December 2020 and FYE 31 December 2021 was not submitted to the Commission as neither of the trustees had the administrative skills to prepare accounts. The trustees were advised to instruct an accountant to undertake this task but failed to do so.   

Article 24 of the charity’s governing document stipulates that the trustees must comply with their obligations under the Charities Act 1993 (now under the Charities Act 2011) regarding the preparation of their accounting information and transmission to the Commission. To date, the Commission has not received the charity’s accounting information for FYE 31 December 2019, FYE 31 December 2020 and FYE 31 December 2021. This is a breach of article 24 of the Charity’s governing document.

In addition to the trustees advising they did not have the necessary skillset to prepare accounting information to submit the charity’s accounts for FYE December 2019 to FYE December 2022 (the Interim Manager was appointed 12 days before the deadline for FYE 31 December 2022 accounting information being due - for more information on the appointment of an interim manager see below) the trustees also advised that they had failed to keep all the necessary documents for this purpose and those retained were not filed adequately so could not be located when required.

The inquiry found that the trustees’ repeated failure to submit the charity’s accounting information to the Commission was a breach of the charity’s governing document and sections 163, 164, 169 of the Act. This was also misconduct and/or mismanagement in the administration of the charity.

Interim Manager

On 19 October 2023, the inquiry appointed Paul Barber of Begbies Traynor, as an Interim Manager (IM) under section 76(3)(g) of the Act to take over the management and administration of the charity and its property to the exclusion of the trustees.

The IM determined that it was appropriate to wind up the charity on the basis that it was not feasible or viable to address the significant underlying issues at the charity.

The IM oversaw the rehoming of the animals under the care of the charity and after the settling of all the charities costs and liabilities, the charity’s residual funds amounting to £18,262, were distributed to two charities with similar purposes.

The Commission thereby ensured that these funds were protected against the risks evident within the charity and secured a proper application of them for the purposes of the charity.

The IM determined that the trustees had not dealt with their responsibilities in respect to fundraising as there had been little or no fundraising efforts over the past few years which had caused the charity’s reserves to be depleted for their ongoing running costs.

The IM concluded that the charity should be wound up because it was no longer considered viable, particularly since the trustees did not appear to have the necessary levels of knowledge and competence to continue running the charity, had failed to keep proper accounting records and accounts had not been filed for some time.

The cost of the IM’s appointment, totalling £24,120.00 (inclusive of VAT and disbursements), was met from the charity’s funds.

Having completed the scope of their appointment, the IM was discharged on 06 November 2024 by an Order made under section 337(6) of the Act.

Conclusions

The Commission has concluded that the trustees were responsible for misconduct and/or mismanagement in the administration of the charity. The trustees were responsible for comprehensive failures in the charity’s governance and administration, including failures to prepare and submit financial information over a significant and prolonged period, failures to act in accordance with the charity’s governing document and failures to comply with an Order and advice of the Commission.

Whilst the charity did carry out its charitable purposes, providing help and care to animals in need, it is the Commission’s view that the trustees collectively failed to understand their legal duties as trustees and appreciate the importance of always acting in accordance with them.

Regulatory action taken

The inquiry exercised the Commission’s regulatory powers under sections 52 and 47 of the Act on multiple occasions to obtain further information and copy documents, including from the trustees and the charity’s banking providers.

On the 19 October 2023 the inquiry exercised its powers under section 76(3)(g) of the Act to appoint an IM to the exclusions of the trustees; subsequently on the 06 November 2024 an Order was issued under section 337(6) of the Act to discharge  this appointment when their duties had been completed.

Issues for the wider sector

The purpose of this section is to highlight the broader issues arising from the Inquiry that may have relevance for other charities. It is not intended as further comment on the charity in addition to the findings and conclusions set out in the earlier sections of this report but is included because of their wider applicability and interest to the charity sector.

Charity trustees are under a legal duty to submit annual returns, annual reports and accounting documents to the Commission as the regulator of charities depending upon the level of the charity’s income and type of charity. Failure to submit the required accounting information to the Commission is a criminal offence. The Commission also regards it as mismanagement and/or misconduct in the administration of a charity.

Charity trustees must comply with Orders and Directions of the Commission. In some circumstances it may be a criminal offence (or contempt of court) for a charity or a trustee to not comply with an Order or Direction of the Commission.

Conflicts of interest are more likely when there are only a small number of trustees on the board, when trustees are closely related, or when the charity has dealings with organisations in which the trustees have interests. It is vital that trustees avoid becoming involved in situations in which their personal interests may be seen to conflict with their duties as trustees. (Trustees have a legal duty only to act in the best interest of their charity). The trustees should put in place policies and procedures to identify and manage such conflict.

An effective charity is run by a properly appointed, clearly identifiable board or trustee body with at least the minimum number of trustees, as required by its governing document. Holding the position of trustee in name but failing to fulfil the legal duties and responsibilities of a trustee may amount to misconduct and mismanagement in the administration of a charity.