A children's charity raised around £60,000 but spent only £3,500 on charitable activities, while trustees pocketed two thirds of the remaining money, according to a Charity Commission report published today.

An operational compliance report into Aiding Children, a London-based charity, said the Commission investigated the charity after concerns were raised in December 2013. It found that only 6 per cent of income had been spent on charitable activities, according to the accounts. The charity trustees claimed to have made donations to Plan International and Children in Need, but only a £1,480 donation to Plan International could be confirmed.

“We were told by one of the trustees that cash was being collected by fundraisers on a daily basis and brought back to the charity’s office,” the Commission report said. “We were also told that 30 per cent of the money from the bucket was paid to the fundraisers and the rest of the money was kept with a trustee of the charity.

“Following our access to old bank account records, we found regular payments to all of the former trustees up to the date the bank account was closed.”

The Commission said it concluded the organisation was not operating as a charity and removed it from the register in March.

“It appeared that this organisation was established primarily for personal benefit. It was not operating as a charity, had no identifiable public benefit and seemed to be a fundraising operation,” the report said.

The Commission said it was aware the charity planned to fundraise at a number of underground and national rail stations.

“We ensured that they were no longer able to do so by liaising with Transport for London and National Rail,” the report said. “We also liaised with a number of local authorities to ensure that any street licence was revoked.

“In addition, we have referred our concerns and the details of our case to Action Fraud.”