Decision

Statement of the results of a class inquiry

Published 9 September 2026

Applies to England and Wales

Background and Issues under Investigation

On 15 April 2025 the Charity Commission (‘the Commission’) opened a statutory class inquiry, under section 46 of the Charities Act 2011 (‘the Act’), into a group of charities where there was evidence that they were issuing or had issued cheques, which are then exchanged for cash.

Following an unannounced visit by HMRC in March 2023 to a company in Hackney, 105 charities were found to have cashed cheques with it to a value of £22 million between December 2021 and March 2023.

There was a regulatory concern that the cheques being issued were blank (signed but with the payee and amount left blank) or open cheques (signed and a value added but with the payee left blank). The issuing of either a blank cheque or an open cheque is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

The scope of the class inquiry is to examine the practice of issuing cheques, which are then exchanged for cash, and whether the trustees have and are complying with their legal duties and responsibilities to protect and account for charity property.

Charities are being entered into the class inquiry in tranches and charities are removed when the inquiry into it concludes.

This report summarises the findings and conclusions for the following charities which have been removed from the class inquiry between 12 February 2026 and 3 June 2026:

• The Z.S.V. Trust charity registration number 1063860
• Bnois Jerusalem Schools charity registration number 312568
• Forty Limited charity registration number 1039036
• Friends Of Yeshiva Daas Sholem Shotz registration number 1070789 – removed charity

Summary of findings, conclusions and regulatory action

The Z.S.V. Trust

The charity’s objects are:

The relief of poverty and such other charitable purposes as the trustees may from time to time in their discretion determine.

This charity was entered into the class inquiry on 31 July 2025 because evidence from HMRC suggested that during the period December 2021 and March 2023 the charity issued 48 cheques, totalling £76,835, which were exchanged for cash at a company in Hackney. The issuing of either a blank cheque or an open cheque is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

During the inquiry the trustees confirmed that they used to give beneficiaries open cheques, so the recipient could decide how to use the funds, in line with the charitable purpose that the grant was awarded.

During the inquiry the trustees explained that, in a limited number of cases, they had previously issued open cheques to beneficiaries where, in the trustees’ judgement, this was the most appropriate means of providing urgent financial assistance.

The trustees confirmed to the inquiry that they had made the decision to stop issuing cheques in this way before the Commission contacted them. The charity had also proactively strengthened their financial controls and added that “the payee’s name should be inscribed on the cheque before signature”, ensuring that issuing open cheques was no longer possible.

As part of the inquiry the charity’s grant making processes were also considered. The trustees provided details of the various ways in which the charity identifies and supports its beneficiaries. The Commission identified areas in which the charity could strengthen its grant making processes.

The Commission concluded that the charity was carrying out charitable activities in furtherance of its charitable objects. While the inquiry identified areas where governance procedures could be strengthened, it found no evidence that the charity’s funds had been misappropriated or used for non-charitable purposes.

The inquiry closed with the provision of regulatory advice and guidance, and an action plan issued under section 15(2) of the Act to improve the charity’s governance.

Bnois Jerusalem Schools

The charity’s objects are:

(a) To provide traditional religious Jewish education for girls. (b) To foster and encourage high spiritual values among the pupils. (c) In co-operation with parents, to provide pupils with a good upbringing as loyal citizens of Great Britain and steadfast religious jews. (d) To support, assist and co-operate with any organization as opportune, in every way for the benefit of the schools. (e) To further in every way the general aims.

This charity was entered into the class inquiry on 31 July 2025 because evidence from HMRC suggested that during the period December 2021 and March 2023 the charity issued 15 cheques, totalling £80,370, which were exchanged for cash at a company in Hackney. The issuing of either a blank cheque or an open cheque is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

During the inquiry it was confirmed that the charity did issue open cheques, most commonly to provide salary payments to the charity’s staff. It was clarified that this would mainly be in situations where the member of staff had a problem with their bank, or that they were overdrawn and they did not want to pay the funds into their bank account. The Commission does not consider that where an individual has a bank account in overdraft to be a justifiable reason to provide payment to individuals via an open cheque.

The Commission concluded that the charity was undertaking charitable activities in furtherance of its charitable objects but identified some governance areas where improvements could be made.

The inquiry closed with the provision of regulatory advice and guidance, and an action plan issued under section 15(2) of the Act to improve the charity’s governance.

Forty Limited

The charity’s objects are:

(1) The advancement of religion in accordance with the orthodox Jewish faith, (2) The relief of poverty, (3) Such other objects recognised by English law.

This charity was entered into the class inquiry on 31 July 2025 because evidence from HMRC suggested that during the period December 2021 and March 2023 the charity issued 19 cheques totalling £58,800, which were exchanged for cash at a company in Hackney. The issuing of either a blank cheque or an open cheque is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

During the inquiry the trustees explained that the cheques were used to support an overseas charity. They confirmed that the 19 cheques had been issued with the payee section knowingly left blank to allow the recipient to obtain cash in the UK before taking it overseas. The trustees further stated that the charity had no direct relationship with the entity where the cheques were cashed, and it was at the beneficiaries’ discretion how the cheques were cashed to obtain the required funds.

The trustees confirmed that this practice has ceased. The charity no longer issues cheques with blank payees, does not currently hold a cheque book, and has not used cheques for several years. All expenditure is now made via bank transfer, which was verified through a review of recent bank statements.

As part of the inquiry, the Commission also reviewed the charity’s current grant making processes. The trustees described how beneficiaries are identified, how need is assessed, and how the funds given are monitored, providing the inquiry with supporting documentation. The Commission found that processes relating to grant making could be strengthened.

The Commission concluded that the charity was carrying out activities in line with its charitable objectives and had not used cheques for charitable expenditure for several years. However, it identified certain areas of governance where improvements could be made.

The inquiry closed with the provision of regulatory advice and guidance, alongside an action plan issued under section 15(2) of the Act to improve the charity’s governance.

Friends Of Yeshiva Daas Sholem Shotz (removed charity)

The charity’s objects were:

(A) The advancement of the orthodox Jewish religion

(B) The advancement of orthodox Jewish religious education and education generally.

This charity was entered into the class inquiry on 31 July 2025 because evidence from HMRC suggested that during the period December 2021 and March 2023 the charity issued 66 cheques, totalling £261,330 which were exchanged for cash at a company in Hackney. The issuing of either a blank cheque or an open cheque is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

A new board of trustees was appointed in August 2024 (‘new trustees’) and following a meeting with the new trustees, it was confirmed that open cheques had been issued by the trustees who were in post at the relevant times (‘former trustees’).  In addition, the Commission had concerns whether the new trustees had fully understood their legal duties and responsibilities as trustees when they took over the charity’s operation in August 2024. During the inquiry, the new trustees provided meeting minutes to confirm their decision to wind up the charity. This was due to the administrative challenges which arose as a result of the charity’s former trustees not passing on the charity’s financial and administrative records when the new trustees were appointed. The charity was wound up by the new trustees, and it was removed from the register of charities on 20 January 2026.

Although the charity no longer exists, due to the concerns identified during the investigation the Commission issued regulatory advice and guidance under section 15(2) of the Act to ensure the new trustees understood their duties and responsibilities in any future trusteeship roles.

Issues for the wider sector

The purpose of this section is to highlight the broader issues arising from the inquiries that may have relevance for other charities. It is not intended as further comment on any of the charities 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.

Blank or open cheques

Charities should not issue blank or open cheques. To do so is misconduct and/or mismanagement in the administration of the charity. In most cases charities should use the regulated banking sector when transferring charitable funds. It is difficult to see, where regulated banking services are available, how trustees could show they discharged their legal duties if they do not use the regulated banking sector in order to secure or transfer the charity’s funds.

Policies and procedures

To be effective and to meet their statutory duties as charity trustees they must ensure that it is managed in accordance with its governing document and general law. All charities should have appropriately tailored internal policy documents which address the specific risks associated with the kind of activities that are undertaken.

Trustees should ensure that these policies are implemented and reviewed at appropriate junctures. A failure to implement and ensure compliance with internal policy documents could be evidence of misconduct and/or mismanagement in the administration of the charity and can put assets, beneficiaries and a charity’s reputation at risk. The Commission expects trustees to make conscientious and continuing efforts to ensure that they resolve the issues that have already been raised with them by the Commission. Where a previous commitment has been given, the Commission will view non-compliance as evidence of misconduct and/or mismanagement.

Charity trustees are legally responsible for ensuring the charity’s money is used properly for legitimate charitable purposes and safeguarded from loss. Trustees must always act to protect charity property. Ensuring strong financial management procedures and proper internal controls, and applying a common-sense approach, will help trustees meet their duties. They also need to promote the transparency and accountability of their charity, particularly as regards its finances, which is so important for public trust and confidence in charities.

Grant funding – Individual applications

Charities that regularly make grants should have appropriate systems and procedures in place, including a grant making policy, to:

• allow trustees to set priorities for funding (which they can change or depart from at their discretion - as long as this is recorded appropriately)
• require sufficient detail in the grant application, and monitoring procedures, to enable the trustees to identify and assess risks and make informed decisions
  • applicants should be asked to provide documentation that evidences the individual’s case of financial hardship
• ensure grants are authorised by the trustees, or within a framework of delegation that ensures appropriate oversight and scrutiny by the trustees

Grant funding – Using third parties

Trustees have a duty to ensure that their charity’s activities are completed in order to fulfil its purposes and for no other reason.  This includes grant making.  You must be able to show that any grants are clearly in line with your charity’s purposes.

If a charity uses a third party to make decisions and distribute grants on behalf of the charity, the trustees should put in place a written agreement. This should set out the criteria for applicants, details of what the charity expects applicants to provide and what the trustees expect the third party to report back. This should enable the trustees to check that the charity’s funds are being used only for the charity’s purposes and in accordance with the agreement. Depending on the value of the grant funding, the agreement might also include putting in place monitoring arrangements, which are proportionate to the value of the funding and assessment of any risk.

If a charity is to provide grant funding to a non-charitable organisation, then a suitable risk assessment should be carried out and the trustees will need to demonstrate how such a grant furthers the charity’s objects.