The Charity Commission has opened a statutory inquiry into seven linked charities because of issues suggesting a possible misapplication of charitable funds and potential personal benefit.
The Commission also said it has serious concerns of potential misconduct and mismanagement at the charities, which are linked by two common trustees and shared registered contact details.
The charities under investigation include IPAD, which reported income of £84,000 and expenditure of only £39,000 in 2016. It has registered several charitable objectives including the relief of unemployment.
After proactive work identified discrepancies, the Commission used its powers to obtain bank statements for IPAD.
Accounts from IPAD for the financial year ending 2014 contain identical information to three other sets of accounts submitted by two connected charities included in the inquiry.
The Commission also suspects that trustees at IPAD knowingly acted against their legal duty by submitting false and misleading information, breaching section 60 of the Charities Act.
Seven connected charities included in the inquiry
The Commission said there was no evidence for six of the group of seven charities conducting any charitable activity.
The Commission has frozen the bank accounts of those six charities to protect charitable funds.
The six other charities involved in the class statutory inquiry are:
- Friends of African Organisations
- British Africa Connexions
- Kono District Development Association UK
- Hope Direct
- Social Action and Poverty Alleviation
- Action for Community Transformation
Scope of the inquiry
The inquiry was opened on 29 April and will consider whether the connected charities have been operating exclusively for charitable purposes.
It will also look at whether financial controls have been adequate and whether funds have been properly spent and accounted for.
Finally it will examine if the trustees at the seven charities complied with their legal duties in administration, governance and management and their legal obligations for the content and preparation of accounts.
The Commission will publish its report on the issues examined in the inquiry, the actions taken and the outcomes produced.