Decision

Gardens of Peace Muslim Cemetery Trust

Published 19 April 2017

This decision was withdrawn on 15 October 2019

Gardens of Peace Muslim Cemetery Trust: Inquiry report

Applies to England and Wales

• Publication for Northern Ireland
• Publication for Scotland

A statement of the results of the class inquiry into double defaulter charities in particular Gardens of Peace Muslim Cemetery Trust (former registered charity number 1072903) (‘the charity’).

Published on 19 April 2017.

The class inquiry

On 20 September 2013, the Charity Commission (‘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 2 or more years in the last 5 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 day after the specified date they were still in default (partially or otherwise)

At the point a charity met the criteria they would become part of the inquiry. Charities that have been identified for inclusion in the class inquiry have a last known annual income of at least £150,000.

The charity

Gardens of Peace Muslim Cemetery Trust was registered on 11 December 1998. It was an unincorporated charity governed by a declaration of trust dated 13 September 1998, as amended by a supplemental deed dated 8 December 1998.

The charity’s object was to promote the Islamic religion by maintaining land for the purpose of the burial of Muslims according to the principles of Islamic Sharia Law, as interpreted by the Ahlus Sunnah Wal Jamaa’ah.

The charity was removed from the register of charities on 15 March 2017 due to the fact that it had incorporated as a charitable company, and its activities are now being carried out by the charitable company, Gardens of Peace Muslim Cemetery, under charity registration number 1152922 (‘the company’).

More details about the charity are available on the register of charities (‘the register’).

Issues under investigation

The charity had failed to submit its annual accounts, reports and annual returns to the Commission for the financial years ending 31 December 2012, 2013, 2014 and 2015 within the statutory deadlines. During the whole period of default, the charity was sent various computer generated reminders from the Commission regarding the submission of their annual accounting documents. Although reminders were sent the charity remained in default of its obligations under the Charities Act 2011 (‘the act’).

In addition, a final warning letter was issued on the 30 January 2017 requesting that the missing documents be provided by 14 February 2017, and warning the charity that if it remained in default it would become part of the inquiry. The charity became part of the inquiry on 15 February 2017 because it failed to supply the outstanding annual accounting information.

The inquiry is confined to dealing with the trustees’ mismanagement and misconduct^{[footnote 1]} and remedying the non-compliance in connection with the annual accounting documents.

The charity’s trustees undertook to submit all outstanding accounting documents by 21 February 2017. In the event they submitted the documents on 18 February 2017.

A charity representative informed the Commission that delays were incurred in complying with their statutory accounting requirements due to management being diverted to a protracted planning enquiry in relation to a site that the charity had acquired, and a lack of staff resource to prepare the accounts, an issue which was later rectified after the trustees recruited a finance manager. This does not excuse the failure of the trustees to fulfil their statutory obligations.

When the charity’s missing documents were submitted, the accounts were referred for scrutiny by the Commission’s accountants. Any issues arising from that scrutiny will be followed up separately with the company.

Conclusions

The charity’s trustees were in default of their legal obligations to file accounting information with the Commission. This was mismanagement and misconduct in the administration of the charity and a breach of their legal duties.

As a result of the inquiry, the Commission ensured the charity complied with its legal obligations to submit their annual accounting information. £3,582,535 of charitable income was publicly accounted for.

The charity ceased to be part of the inquiry when it was no longer in default of its accounting obligations. This happened on 18 February 2017 when the charity filed the last missing documents.

On 12 March 2017 the charity submitted a dissolution form to the Commission and was removed from the register on 15 March 2017.

Regulatory action taken

The Commission provided regulatory advice and guidance about the trustees’ duty to file the charity’s annual accounting information, and also provided advice regarding the procedure for closing a charity on the register.

Issues for the wider sector

Trustees of charities with an income of over £25,000 are under a legal duty as charity trustees to submit annual returns, annual reports and accounting documents to the Commission as the regulator of charities. Even if the charity’s annual income is not greater than £25,000 trustees are under a legal duty to prepare annual accounts and reports and should be able to provide these on request. All charities with an income over £10,000 must submit an annual return.

Failure to submit accounts and accompanying documents to the Commission is a criminal offence. The Commission also regards it as mismanagement and misconduct in the administration of the charity.

It is important that the financial activities of charities are properly recorded and their financial governance is transparent. Charities are accountable to their donors, beneficiaries and the public. Donors to charity are entitled to have confidence that their money is going to legitimate causes and reaches the places that it is intended to. This is key to ensuring public trust and confidence in charities.

1. The terms misconduct and mismanagement are taken from section 76 of the act. Misconduct includes any act (or failure to act) in the administration of the charity which the person committing it knew (or ought to have known) was criminal, unlawful or improper. Mismanagement includes any act (or failure to act) in the administration of the charity that may result in significant charitable resources being misused or the people who benefit from the charity being put at risk. A charity’s reputation may be regarded as property of the charity. ↩