A poverty relief charity has been criticised by the sector regulator after an investigation found that £151,000 was moved to a trustee’s personal bank account to facilitate a transfer of money overseas.
The Charity Commission reported today that the Olive Grove Foundation made the transfers to Mohammed Bhaiyat’s account between 2018 and 2020 after the charity’s banking provider no longer permitted it to make overseas payments.
According to its statutory inquiry report, the £151,000 transferred amounted to 76% of the charity’s expenditure for the financial year ending 6 February 2020.
Its inquiry found that the trustees failed to recognise the potential issues associated with the use of personal bank accounts to transfer charitable funds.
The commission therefore concluded that the manner in which the trustees managed the charity’s funds amounted to misconduct or mismanagement.
£3,000 bail payment
The inquiry also found that in May 2020 the charity paid £3,000 to HM Courts and Tribunals Service to secure the conditional bail of a person arrested by British police for extradition to the Czech Republic.
While the charity had consulted the arrested person’s lawyer before making the payment, the commission criticised its trustees for not seeking independent legal advice.
The commission said that relying on the individual’s solicitor “presented a clear conflict of interest and was insufficient”.
It said that by raising and paying the £3,000, the trustees were acting outside of the charity’s stated purposes, thereby breaching their fiduciary duties and the governing document.
The commission concluded that the trustees’ decision to make the payment was misconduct or mismanagement.
Internal policies
The commission began engaging with the charity in 2019 over its operations and expenditure in Syria, which it considers to be a high-risk area.
Through its inquiry, which opened in 2021, the commission also criticised the charity for having a lack of internal policies and failure to file its accounts on time.
“Given the charity’s size, income level, and the nature of its overseas work in high-risk areas with vulnerable beneficiaries, the commission considers the policies should have been more comprehensive,” the inquiry report said.
“For example, the charity’s financial management policy lacked procedures for holding or transferring charitable funds from the charity’s bank account and for sending charitable funds overseas.”
Meanwhile, the charity was late in filing its annual accounting documents with the commission for the financial years ending 6 February 2019 and 2021.
Civil Society has contacted the charity for comment.
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