Charity criticised after trustee became general manager and lost £10,000

20 Feb 2018 News

Charity Commission's London offices

A charity has been criticised by the Charity Commission after one trustee resigned their position to take up a paid general manager job at the charity without an open recruitment process.

The City of Worcester Gymnastics Club appointed the new general manager without a transparent process and without demonstrating why the role was needed. The trustee's partner also sat on the board which finalised the appointment, and set remuneration and bonuses for the role.

The Commission also found the general manager and their partner had lost £10,000 of the charity’s money after taking it home and getting burgled, and that the trustees had leased a £44,000 vehicle but not shown it was in the charity’s best interests to do so.

The regulator also found the charity to be in breach of its governing documents because it did not have enough trustees, and was highly critical of many elements of its administration.

“The charity’s record keeping was generally poor, with little evidence of trustee meetings being held or records of decisions taken,” the Commission said. “We established that the charity had little in the way of financial controls, with evidence of large related party transactions and cash expenditure, and significant missing financial records.”

The Commission issued an action plan requiring several changes, which have now been carried out.

“In February 2017 we used our formal powers under the Charities Act 2011 to issue the charity with formal advice in an action plan,” the Commission said.

That plan said that:

  • The trustees were required to recruit additional un-conflicted trustees and arrange an AGM
  • Once appointed, the un-conflicted trustees should decide if the charity still required a General Manager and if so, re-advertise the post under an open and fair recruitment process
  • A formal repayment plan must be put in place to allow the conflicted trustee and general manager to make good the £10,000 losses incurred as a consequence of their actions
  • The trustees should decide whether there was a legitimate need for the charity to continue to lease the motor vehicle, and consider alternative arrangements
  • The charity should instigate a review of its meetings and governance arrangements, as well as its internal policies

The Commission said it was satisfied the trustees had carried these out.

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