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Regulator inquiry finds financial misconduct in charity

Melanie May | 18 January 2016 | News

The Charity Commission has published the results of its inquiry into the now defunct charity Caring for Children in the Gambia, finding a case of financial mismanagement and misconduct.
The inquiry was launched in 2014 following the commission’s concerns surrounding the charity’s relationship with a non-charitable company that had been established with a similar name.
It found that the charity had failed to adequately maintain financial controls, to demonstrate that its expenditure was a proper application for the purposes of the charity or to separate the affairs of the charity from the affairs of the company.
The charity had been registered with the commission in February 2005 with the aim of advancing the education of children in the Gambia. A company with a similar name was then set up in 2008, with an attempt to register it with the commission in 2011as a replacement for the existing charity. However, the commission did not accept that the company was set up as a charity, and required further evidence before the registration application could be considered further.
Subsequent contact with the charity and the company did not ease the commission’s regulatory concerns and the inquiry into the charity was opened.
The company ceased trading shortly after the charity trustees were notified of the inquiry and the company was dissolved in 2015. The charity also ceased to operate and has been removed from the commission’s register. As a result, the commission has concluded that the risks of misuse or loss of charity funds through a lack of separation between the company and the charity have been addressed, and there is therefore no ongoing risk to charitable funds.
Carl Mehta, head of investigations and enforcement operations at the Charity Commission, said:

“Basic financial management is a core responsibility of trustees of charities, large and small.  Trustees must manage a charity’s resources properly and be able to show they have used them properly. This includes ensuring that their charity’s assets are only used to support or carry out charitable work.
Charities often work closely to good effect with other organisations, but they have to keep their affairs separate from them, especially when they are carrying out activities which are not charitable. Otherwise they risk making the charity vulnerable to abuse, and being in breach of their legal duties as charity trustees.”



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