Charity under investigation says regulator ‘acted disproportionately’

31 Aug 2018 News

Trustees at two education charities currently under investigation by the Charity Commission have accused the regulator of “acting disproportionately and without regard to the reputational damage which may be caused by their action”.

The Commission announced that it had launched an investigation into education charities the Martin Foundation and the Collegiate Foundation last week. As well as opening a statutory inquiry, the regulator appointed interim managers to take over their running, and issued orders on their bank accounts. 

The Commission said that there were serious regulatory concerns relating to the running of the charities, which share trustees, including conflict of interest concerns and potential unauthorised trustee benefit. 

However, a statement from the charities’ trustees, said: “The trustees are surprised and disappointed by the actions of the Charity Commission. The Commission appears to have acted disproportionately and without regard to the reputational damage which may be caused by their action or the possibility of working cooperatively with the trustees.  

“The trustees have always dealt openly and constructively with inquiries from the Charity Commission and would hope to continue to engage in this way going forward.”

The regulator had said it engaged with the two charities after receiving a complaint from the public and after receiving information from other regulators in respect of a number of regulatory concerns. 

Controversies

The Collegiate Charitable Foundation financially supports Queen Ethelburga's College, which has been at the centre of numerous controversies. 

Brian Martin, former chair of governors at Queen Ethelburga's College, was cleared of a series of sexual offences against its pupils and other teenagers in July of this year. He was found not guilty of 21 offences. Prosecutors said they would be seeking a retrial on two counts of indecent assault and one of sexual assault. 

Martin was replaced by his daughter Amy Martin as chair of governors in 2015. The Charity Commission website states that she is still a trustee of both The Collegiate Charitable Foundation and The Martin Foundation.

The Commission’s inquiry is examining:

  • The extent to which potential conflicts of interest and connected party transactions have been properly managed
  • The extent to which there has been any unauthorised trustee benefit
  • Whether the charities operated for exclusively charitable purposes

The trustees continued: “All expenditure by The Collegiate Charitable Foundation is directly in pursuit and accordance with its charitable objectives. The Martin Foundation has been inactive since January 2016 but equally all expenditure is demonstrably in line with its charitable objectives. 

“The trustees are confident that both charities operate appropriately and remain willing and ready to address concerns raised by the Charity Commission.”

The Charity Commission said that its inquiry into The Martin Foundation and the Collegiate Charitable Foundation remains ongoing and it cannot comment further.

The regulator’s guidance states that decisions to open an inquiry and appoint an interim manager are not taken lightly, and depend on a careful assessment of a set of factors and the circumstances in each particular case. 

It says that before taking the decision to open a statutory inquiry, it applies its risk and regulatory framework.

 

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