The Charity Commission has opened a statutory inquiry into the Knightland Foundation, and has appointed interim managers to oversee the charity’s work.
The regulator confirmed that the interim managers would “take over the management to the exclusion of the trustees”. The Knightland Foundation does not employ any staff.
The Commission said it has “serious concerns” about finances and governance at the charity, which it has been investigating since 2016.
Trustees at the Knightland Foundation were issued with an action plan to address these concerns in 2017, but some issues remain “unresolved”, according to the Commission.
The charity, which makes grants to Jewish organisations working on education and poverty, has appealed against the decision to impose interim managers, and the case will be heard this summer.
A review of the Knightland Foundation’s accounts in 2016 revealed “insufficiently documented” loan agreements and transactions to connected companies, the Charity Commission said.
The regulator’s website shows that the charity’s income was £2.3m in 2016-17, around five times higher than its income in 2015-16 and 2017-18. Its expenditure was £1.9m in 2016-17, around four times higher than in the years before and after.
Its accounts for 2016-17 do not include details of the donations which boosted the charity's income. Instead, the accounts include a note saying a separate document about the donations can be requested in writing.
The regulator said in a statement: “In March 2017, the Commission issued the charity’s trustees with an action plan to address these matters. The Commission continued to monitor the charity and, due to unresolved concerns, it escalated its engagement to a statutory inquiry on 24 February 2021.”
A statutory inquiry allows the Commission to exercise its full range of legal and enforcement powers.
The Knightland Foundation spent more than £70,000 last year on legal and professional costs, according to its latest set of accounts.
The Commission said: “The inquiry will examine whether potential conflicts of interest and connected party transactions have been properly managed and whether there has been any unauthorised trustee benefit.
“It will also look at wider concerns around the charity’s financial and resource management and the trustees’ compliance with their legal obligations.”
John Dickinson and Joseph Colley, of the law firm Carter Backer Winter, were appointed last month as the interim managers at the charity.