Share

£232,000 charity chief pay-off 'constitutes misconduct', says OSCR

£232,000 charity chief pay-off 'constitutes misconduct', says OSCR
News

£232,000 charity chief pay-off 'constitutes misconduct', says OSCR3

Governance | Niki May Young | 16 Jan 2013

A discretionary redundancy payment of £232,708 to the chief executive of a charity in the process of winding up should not have been paid, OSCR has ruled.

The Office of the Scottish Charity Regulator says that because the payment has already been made to the former chief executive of the Glasgow East Regeneration Agency (GERA), the regulator has no powers to recoup the funds for use in the charitable sector.

A reported payment of £500,000 was made to Ronnie Saez when GERA was merged with four other charities into the Glasgow Regeneration Agency (GRA) in 2011, and he was made redundant. GERA, which in its 2011 accounts spent £145,491 on governance costs, had applied to OSCR to wind up as a separate entity and this was approved on 1 March 2011 with GERA transferring its assets to the receiving company for the GRA.

But OSCR advises in a report published yesterday that the charity had presented to the regulator only half of this payment in its plans for closure. What was presented, a statutory redundancy payment and a pension element were required by law. However a £232,708 discretionary pension augmentation, that the trustees later advised was in recognition of the CEO's performance in his role, was not included in the application.

The trustees, three of whom are also local councillors, had advised that the payment would put him on a par with Glasgow City Council employees who had recently left employment, although Saez was not an employee of the Council. However in its investigation, opened in response to local press interest, OSCR was made aware that Saez had already been rewarded through remuneration for his achievements during the time he was employed with GERA.

OSCR concludes that: "The charity trustees breached their section 66 duties [to act with care and diligence in the interests of the charity and to ensure that all of a charity's assets are used to further its purposes] when deciding to make a discretionary payment to augment the chief executive's period of membership of the pension scheme. This is considered misconduct in the administration of charity."

The regulator formed its conclusion based on the size of the payment, the lack of advice sought before making the payment, the prior remuneration in recognition of the CEO's achievements and a lack of evidence that the money was spent in the interests of the charity.

Additionally, OSCR advised that: "Terms and conditions of service in a local authority may not be a suitable comparator on which charity trustees base decisions."

OSCR advised that it would not recommend that the former trustees, some of whom are trustees of other charities, be prevented from sitting on other charity boards:

"We concluded, from knowledge of the charities concerned and having made the charity trustees of GERA aware of their misconduct, that the risk of a similar situation arising is minimal. We do not therefore consider it would be proportionate to monitor the other charities with which the charity trustees of GERA are involved," OSCR added.

The regulator said it will review how its consent procedures deal with the possibility of actions such as these, including the information it asks for from charities seeking consent to dissolve and its subsequent checks of charities' actions in this regard.

 

 

Bingo
18 Jan 2013

This misconduct by trustees has detrimentally affected the lives of Glasgows people. If Ronnie Saez has any decency he'll return the overpayment

http://www.avaaz.org/en/petition/Ronnie_Saez_to_repay_his_inappropriately_massive_severance_package_and_the_money_to_be_used_for_childcare/?pv=1

Carl Allen
16 Jan 2013

Since a charity is not a business, then this does not look like misconduct but like mischief.

And mischief is culpable.

Ged Simpson
16 Jan 2013

"We're all in it together."

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Savile charity to challenge victim compensation scheme

31 Jul 2014

The Jimmy Savile Charitable Trust has been granted permission to appeal against the agreed system of compensation...

Macmillan's voluntary income soars by £34.1m

31 Jul 2014

Macmillan Cancer Support raised £186.9m in 2013 – an increase of £34.1m on the previous year, according...

WCVA values voluntary sector contribution at £3.8bn

31 Jul 2014

The Welsh voluntary sector contributed £3.8bn to Wales’ economy last year, which is 8 per cent of the...

Macmillan's voluntary income soars by £34.1m

31 Jul 2014

Macmillan Cancer Support raised £186.9m in 2013 – an increase of £34.1m on the previous year, according...

Half of hospices in England saw NHS funding cut or frozen this year

31 Jul 2014

Half of hospices in England have had their statutory funding from the NHS either cut or frozen this year,...

Syria and Haiyan appeals boost Oxfam income by 6 per cent

30 Jul 2014

Oxfam’s total income rose by more than £21m to £389m in the year to March 2014, according to its annual...

Online donations forms are too long and cost charities donations, finds report

28 Jul 2014

One third of leading charity websites require potential donors to complete more than 20 actions before...

Greenpeace video removed from YouTube following copyright claim

14 Jul 2014

A campaign video by Greenpeace against Lego’s relationship with Shell has been subject to a copyright...

Oxfam advert removed after appearing before extremist videos

10 Jul 2014

Oxfam has removed one of its adverts from YouTube after it was shown on channels showing content from...

Join the discussion

Twitter
 
Training

Attending our one day courses is a highly effective way of ensuring new and existing trustees fully understand their role, responsibilities and liabilities.

>> Find out more <<