Charity Commission opens two Statutory Inquiries for Poor Accounting Practices

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The Charity Commission recently opened a statutory inquiry into two charities: Al-Hijrah Trust for continually failing to submit their reports online and Reb Moishe Foundation for the lending of £2million to an associated company.

Al-Hijrah Trust
Al-Hijrah Trust was formed to address the cultural and religious needs of children in Britain, with a particular focus on children of a religious belief. In February 2015, the Charity Commission visited Al-Hijrah Trust to verify the compliance of the trustees. It was found that the charity had continually failed to submit accounts on time and a concern for the charity’s financial controls was raised. Consequently, a plan of action was agreed in order to make Al-Hijrah Trust compliant once again. However, after the charity failed to meet the demands of the action plan a full statutory inquiry was launched by the Charity Commission on the 8 June 2015. The inquiry has three aims – to examine the trustees and their ability to govern and manage the charity, to inspect their compliance with legislation, and review any offences that may have been committed by the charity.

The Reb Moishe Foundation
The Charity Commission opened an inquiry into The Reb Moishe Foundation due to the charity lending an associated company £2million in 2006. The inquiry was opened in May 2015, but due to the affiliation of another company, it was not made public. In December 2014, the charity watchdogs opened a compliance case on The Reb Moishe Foundation due to concerns raised on a loan that was provided to Gladstar LTD, a small property developer. During this investigation it was discovered that there was a lack of charitable overheads, which was not reflected in the charity’s accounts and there was an inadequate number of trustees to effectively make a decision.
As a result, the Charity Commission opened a statutory inquiry to investigate the charity further on:

  • Other loans that the charity has distributed and whether they meet the charity’s aims
  • Trustees and their ability to act in the best interest of the charity
  • Benefits that trustees may or may not be receiving
  • The trustees’ ability to meet the charity’s legal obligation and effectively manage and control the charity’s finances

These investigations stress the important to maintain your charity’s financial accounts and implement financial controls to reduce any irregularities in your accounts. If you would like further information or confidential advice on your accounts, please contact Suda Ratnam at suda@raffingers-stuart.co.uk.