The Commission has concluded that the initial trustees and former manager of a Birmingham rehabilitation charity failed to comply with their legal duties
An official inquiry has concluded that the initial trustees and former manager of a Birmingham rehabilitation charity failed to comply with their legal duties.
The Charity Commission has disqualified the former manager of the charity, Livingstone House Mother of the Harvest Ministries (1102286), and secured a voluntary undertaking from one of its former trustees that they will not act as a charity trustee or senior manager of a charity.
The Commission launched its statutory inquiry into the charity in July 2018, following repeated failures to submit accounting information. The regulator also had serious concerns about the management of the charity.
The charity’s purpose is to rehabilitate people with alcohol and drug addictions. It provides detoxification and care arrangements for men aged 18 to 65, using a Christian 12 step programme to encourage sober living.
The inquiry uncovered that there were serious issues in the financial management of the charity, including the repeated failure to submit accounting information correctly and on time. It was found that the former manager directly authorised their own salary, overtime and bonus payments from the charity’s bank account.
Investigators also found that the former trustee received unauthorised payments totalling £40,645, in breach of the charity’s governing document.
The charity also failed to manage conflicts of interest adequately and did not have a conflicts of interest policy in place. Analysis of the charity’s bank statements showed that the charity paid £295,688 to a company whose only directors are the former trustee and manager. Accounting records did not include sufficient evidence to support these payments and no contract for the provision of services between the charity and company could be provided. The inquiry also found, however, that the former trustee did not personally benefit from the payments made to the company, whilst they were a trustee. The services provided by the company have since been taken over by the charity and there is no ongoing relationship between the two.
The inquiry concluded that there had been misconduct and/or mismanagement in the administration of the charity. The Commission disqualified the former manager on 13 December 2019 and secured a voluntary undertaking from the former trustee on 24 August 2020. This means both are prevented from being a charity trustee or senior manager of a charity for a period of 4 and 6 years respectively.
Since its intervention, new trustees have been appointed and the regulator has seen significant positive steps towards improvement. It issued the charity with an action plan aimed at improving governance and financial management, which has been fully implemented.
Amy Spiller, Head of Investigations at the Charity Commission, said:
The public rightly expects those in charge of charities to steward and guard funds carefully, for the benefit of the people their charity helps. Managing conflicts of interest robustly is therefore vital for charities to inspire trust.
Charities that put their purpose at the core of all they do and underpin this with robust governance and the highest standards of conduct, will serve their beneficiaries better. I hope and expect that Livingstone House Mother of the Harvest Ministries will do this to continue driving forward positive change at the charity.