Charity Commission inquiry focuses on significance of Trustee responsibilities
Following the Charity Commission’s three year long inquiry into Care4Calais, which concluded in late August, it was found that the former trustees were responsible for numerous instances of misconduct and mismanagement. The Commission found that the charity lacked appropriate governance structures, had poor financial controls, and inadequately handled complaints, dating back a number of years.
In our blog, we detail the findings of the inquiry, highlighting the significance of Trustees’ responsibilities, and actions for current Trustees to take away to ensure they are meeting theirs.
Poor internal financial controls
The Charity Commission’s inquiry was critical of the charity’s financial management, and most notably, a lack of suitable internal financial controls. From October 2017 to August 2020, a now former trustee was reimbursed over £340,000 for charitable expenditure incurred to save the charity approximately £3,000 per year in foreign exchange fees.
Although the inquiry concluded that while no funds were misused or misappropriated for private benefit, the arrangement was inappropriate, and thus, put the charity’s funds at unnecessary risk.
Governance failings, poor compliant handling, and dispute
The inquiry also found that between 2020 and 2021, Care4Calais operated with two trustees, and therefore failing to maintain the minimum number of trustees specified in its governing document.
The charity’s handling of complaints was also called into question, as Care4Claais failed to demonstrate that complaints were handled in an impartial, fair, open or transparent manner, also failing to maintain records of investigations. On at least one occasion, and in breach of the charity’s policy, a trustee handled a complaint about another trustee to whom they were related, and failing to identify and manage the conflict of interest which occurred.
Charity structure and conflicts of interest
Two of the (former) trustees were siblings, and the inquiry found a lack of evidence to suggest that any potential conflicts of interests or loyalty, which may have existed, were managed appropriately.
The founder of the charity was also a trustee, and the Chief Executive Officer, raising the question of how balanced the distribution of decision-making power was at the charity.
Campaigning and political activity
The Charity Commission also reviewed the trustees’ decision to issue judicial proceedings to challenge the government’s Migration and Economic Development Partnership with Rwanda. The inquiry found the decision was properly made, adequately documented, and within the reasonable decisions open to the trustees of the charity. Ultimately, the inquiry determined it was in line with Commission’s guidance on political campaigning for charities.
Get in touch
Following the findings of the inquiry into Care4Calais, it is important for Trustees to review their responsibilities and determine if they are meeting theirs. The Charity Commission signpost their CC8 guidance regarding Internal Controls for Charities and their self-check list for trustees to utilise to evaluate their charity’s performance against legal requirements and best practice.
If you are ensure if you are meeting your responsibilities as a trustee, or would like to discuss your situation in more detail, get in touch with our charity specialist, and PM+M partner, Ceri Dixon using the details below.