Commission serves first ever official warning to local authority over charity mismanagement
Melanie May | 2 September 2024 | News
The Charity Commission has issued Calderdale Metropolitan Borough Council with its first ever official warning to a local authority after the council failed to comply with its duties as trustee of 13 charities.
Charities overseen by this council include the Bacup Road Recreational Ground, Tetley Memorial Park and Public Central Library.
According to the Charity Commission, Calderdale Metropolitan Borough Council has failed to file annual returns and accounts for all 13 charities, which have been overdue for several years. The official warning states that this, and the council’s failure to comply with an action plan the Commission issued to it in 2023, amounts to misconduct and/or mismanagement in the administration of the charities.
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The council must now file all outstanding accounts and also needs to:
- Implement processes to ensure all 13 charities are compliant with their accounting responsibilities going forward
- Provide up-to-date contact details for all charities
- Locate and identify all 13 charities on a local register containing details about the charities and their assets
- Hold regular trustee meetings, ensuring all councillors are aware of their duties and responsibilities – treating all charities as separate entities
- Review financial controls of all charities, taking steps to record and implement processes as well as provide evidence of this action to the Commission.
The Commission has warned that failure by the council to take remedial steps and any additional breach of duty may lead to further regulatory action.
Tracy Howarth, Assistant Director of Regulatory Services, at the Charity Commission said:
“All trustees have a responsibility to their charities and beneficiaries to ensure that their charities are well managed. This is a duty that is really important when vital community assets are in their care.
“In failing to file accounts or take action, even after we provided advice and gave support to comply with our instructions, Calderdale Council fell below the standard we, and the public, expect of trustees. In light of this we have now issued it with an Official Warning, which is the first time we’ve used this power with any council.
“All local authorities who serve as trustees should take note of our advice to ensure they understand what it means to be a trustee.”
The Commission’s Chief Executive David Holdsworth recently wrote to all local authorities warning them of the “significant administrative headaches” councils could face from any failure to correctly comply with their duties. In his letter, Holdsworth set out actions they can take to ensure compliance with their duties, including reviewing the regulator’s newly updated guidance for local authorities as charity trustees and supporting guide for councillors.
The letter also advised charities to keep a register of charitable assets and land held to help ensure any council correctly manages them in their capacity as a trustee, with the Commission stating that failing to correctly identify charitable assets could lead to the loss of public facilities that people rely on and, where charity law is not correctly followed, its intervention.
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.