Former trustees of an international aid charity disqualified by Charity Commission
The Charity Commission has disqualified three former trustees of an international aid charity based in Bedfordshire as part of a two-year investigation by the regulator.
The statutory inquiry into Quba Trust, a charity set up to alleviate poverty, provide disaster relief and promote the Islamic faith, has found the charity was poorly managed and its now former trustees had a serious disregard for, or lack of understanding of, the importance of proper financial management and controls.
The Commission opened a statutory inquiry after routine monitoring by the regulator flagged serious concerns about the charity’s governance and financial management. This was of particular concern due to the charity’s international operations in Pakistan. The charity’s then trustees had also failed to act on regulatory advice and guidance issued by the Commission to make improvements in how the charity was run and ensure it met legal obligations.
The inquiry report sets out failings by the charity’s trustees across a number of areas which amount to misconduct and/or mismanagement:
failure to comply with the charity’s governing document
a serious disregard for, or lack of understanding of, the importance of proper financial management and controls within the charity.
failure to evidence end use of charitable funds transferred overseas
poor record keeping and payments to trustee personal and connected company accounts
late filings of annual accounting documentation
failures to comply with directions and orders of the Commission issued by the inquiry.
For example, during its investigation, the Commission found the former trustees were unable to account for more than £250,000 that was transferred overseas with a further £500,000 lacking a satisfactory financial audit trail. This breached their legal duties and was in contravention of the governing document, which constitutes a breach of trust and is misconduct and/ or mismanagement in the administration of the charity.
Separately, while the charity was largely inactive and under investigation by the Commission it spent more than £36,000 on a consultant. The inquiry examined the rationale for this appointment and, using the Commission’s legal powers, sought evidence and responses from the former trustees. However, the former trustees failed to provide any justification for the decision, define the consultant’s role, or demonstrate any tangible outcomes from their work. The regulator concluded that the consultant’s appointment and remuneration were not in the charity’s best interests and amounted to misconduct and/or mismanagement.
Given the extent of the failings, the Commission determined that the misconduct and / or mismanagement committed by some of the now former trustees made them unfit to be a trustee or hold senior management positions in any charity. As a result, the Commission disqualified three trustees for periods ranging between five and ten years.
Since the Commission’s involvement, the current trustees have taken a number of steps to address the failures and weaknesses in the charity’s governance.
Joshua Farbridge, Head of Compliance Visits and Inspections for the Charity Commission said:
Charities which operate internationally can be more vulnerable to abuse or harm as a result of where and how they operate. Our routine monitoring visit identified concerns which should have been addressed by the former trustees but were not. Trusteeship is an important public role that carries legal duties and responsibilities, which includes acting in a charity’s best interests and managing its resources responsibly. In this case, the former trustees we have taken action against failed to meet the standards expected of them, leading to serious governance and financial management failings. Our inquiry’s findings serve as a reminder of the duties placed on trustees. When those duties are breached, public trust and confidence in charities are undermined. The Commission, as demonstrated in this case, will act to protect the integrity of both the charity involved and the wider charitable sector.
Ends
Notes to Editor
The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive. This ambition will help to create and sustain an environment where charities further build public trust and ultimately fulfil their essential role in enhancing lives and strengthening society.
The inquiry was opened in May 2022 under section 46 of the Charities Act 2011 (the ‘Act’).
On 20 May 2024, the inquiry proceeded with the disqualification orders under section 181A of the Act. On 1 July 2024, orders to disqualify the three now trustees took legal effect. The former trustees have been disqualified for a period between 5 years and 10 years.
Disqualification prevents the former trustees from being a charity trustee or trustee for a charity and holding an office or employment with senior management functions in any charity in England and Wales throughout the period of their disqualification.
More information on the essential duties of a trustee can be found here: The essential trustee: what you need to know, what you need to do (CC3) - GOV.UK