Charity investigated over 'significant' benefit to trustee's company

01 Dec 2017 News

Charity Commission's London offices

The Charity Commission has opened an investigation into a healthcare charity in London, after it found that a private company belonging to one of the trustees had benefited significantly.

The Charity Commission announced it had launched an investigation into Island Health Trust, having opened it officially on 20 November 2017. It did so after concerns were raised back in February regarding the charity’s use of “funds and potential private benefit to one or more trustees”.

Initial enquiries by the Commission did indeed find that a consultancy company, solely owned by one of the trust’s trustees “received significant benefits from the charity relating to a strategic development project”.

Based on these facts, the Commission said it had regulatory concerns whether the “expenditure of these funds upon strategy development falls wholly within the charity’s objects,” and whether or not the trustees have “managed the charity’s resources responsibly and acted in the best interest of the charity” and entered into the contract with the consultancy company was undertaken with “sufficient oversight and adequately monitored its performance.”

A spokeswoman for the Charity Commission couldn’t confirm the monetary worth of the contract, but said the sums of money were “significant”.

The charity

Island Health Trust is a registered charity which operates in the London boroughs of Tower Hamlets and Newham, which lists its charitable objectives as the promotion of “primary health care in any manner which is deemed by law to be charitable”.

According to its most recent set of accounts, Island Health Trust had a total income up to the year ending 31 March 2016 of £270,855 and total expenditure of £307,512.

In the accounts, listed under its support costs, the charity spent a total of £153,583 on “strategy/research” in 2016, compared to just £5,072 in 2015. It spent a total of £295,742 on support costs during the year.

Regulatory issues to be examined

According to the Charity Commission’s statement, it will be looking into a number of issues to do with the administration, governance and management of the charity by the trustees and whether and to what extent any issues or weaknesses in the administration of the charity during the period under review.

The Commission said: “Opening an inquiry is not in itself a finding of wrongdoing. The purpose of an inquiry is to examine issues in detail, investigate and establish the facts so that the regulator can ascertain whether there has been mismanagement and/or misconduct; establish the extent of any risk to the charity’s property, beneficiaries or work and decide what action needs to be taken to resolve the serious concerns, if necessary using its investigative, protective and remedial powers to do so.”

 

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