The recent closure of the British Association for Adoption and Fostering was down to a £650,000 overspend as a result of a Department for Education contract, former staff have claimed.
Former senior members of staff told Civil Society News the charity lost money updating its IT system to comply with DfE security requirements and providing a series of expensive events.
They believe this caused the financial weaknesses which led to the charity entering administration with the loss of 71 jobs in July.
However DfE have said this was not the case. And an official statement from the charity at the time said that "prevailing economic conditions", rather than the contract, led to the the charity's demise.
A briefing, written by former employees and released to Civil Society News this week, alleges the charity's collapse came partly as a result of a DfE contract that required BAAF to update its data security to "impact level three" (IL3) - forcing the charity to spent £500,000 of "charitable reserves" on a new IT system and causing "significant weakness in BAAF’s finances".
The former staff members said they believed the security requirement was "clearly an error by a civil servant" but "because the contract was already complete, the DfE forced BAAF to comply".
"It's a much higher level of security than government and local authorities use for their data and was never requested when we ran the register for many years before," the former employees said.
'Financial weakness'
According to the briefing, further strain was placed on the charity by DfE’s contractual requirement that BAAF deliver ten Adoption Activity Days.
“Part of the Adoption Register contract meant that BAAF agreed to deliver ten Adoption Activity Days for the DfE, for which it received £5,000 for each day," the former staff said.
"However the real cost of these to BAAF was nearly £20,000. They are big events with lots of social workers, adopters and children, but DfE demanded and got them for £5,000 each.
"This led to a huge overspend in BAAF's budget which again triggered the financial weakness,” it said.
'More could have been done'
The former employees told Civil Society News that "many mistakes were made" and "more could have been done" to save the charity from financial collapse.
"BAAF worked with over 90,000 children and its very sudden closure has received no coverage. By contrast, Kids Company dealt with less than 3,000 children," one former employee said.
'Completely untrue'
A spokesman for DfE told Civil Society News allegations of a mistake by a civil servant about BAAF's security requirements were "completely untrue".
“BAAF was awarded the contract for the National Adoption Register following a full and open competition as required by law," the spokesman said.
"Any suggestion that the IL3 requirement was an error or that BAAF was required to fund an additional fee to meet a change in the terms and the conditions after the contract was awarded is completely untrue.
“The contract for the register has now transferred to Coram to ensure this vital service continues, and to avoid any delays in matching children already on the register with loving families. We continue to be grateful to BAAF for the crucial role they’ve played in overhauling the adoption system and look forward to seeing their work continue as CoramBAAF.”
Last month, former chief executive Felicity Collier and former acting chief executive Barbara Hutchinson requested the Charity Commission investigate BAAF's collapse.
Civil Society News understands that the letter claims that the regulator’s guidance for struggling charities was not adhered to in the months before the collapse, and that more could have been done to keep the BAAF from closing.
The Commission said it was "currently assessing" whether the allegations led "to any regulatory concerns".
Some of the charity's services have been transferred to the charity Coram – with the BAAF’s London-based functions transferring to the nearby Coram Campus, according to a Coram spokeswoman.
