A former trustee at Grangewood Educational Association has been found responsible for serious mismanagement of the charity, including their handling of the sale of the school building, and has now promised not to become a trustee elsewhere for ten years.
The Commission said: “The sole trustee formally ceased to be a trustee from 23 July 2018 when his directorship of the charitable company ended, and he was not re-appointed. The trustee has undertaken to not accept a trusteeship for a charity or any charities for a period of ten years from this date.”
The regulator said it did not pursue formal disqualification in this case, and instead the former trustee voluntarily undertook not to accept a trusteeship for any charities for a period of ten years.
The effect of a voluntary undertaking is slightly different to a formal disqualification. The Commission said that if an individual were to attempt to breach a voluntary undertaking not to become a trustee, it would then likely pursue formal disqualification.
Grangewood Educational Association was set up to provide Christian education, and operates the Grangewood Independent School in Newham, London. For financial year ending 31 August 2018, it lists its income as £317,600 and spending at £788,600.
The Commission opened a statutory inquiry on 15 April 2018 and appointed interim managers to the charity on 24 April 2018.
Commission findings: Sale of the school, possession order against parents and a personal loan
The Commission found that significant decisions had been taken for the school by the sole trustee. Decisions included the sale of the school building, a decision to lease it back, and the permanent closure of the school.
The school’s premises were sold and leased back on 20 December 2015 for £2.3m, with the charity entering into a lease agreement up to 20 December 2019 at £115,000 per year.
The inquiry also found that parents were protesting against the decision to close the school by occupying the school premises. The sole trustee had instructed solicitors to instigate a possession order to remove the parents.
The inquiry said the trustee should not have sought a possession order against parents, and that the Commission refused to grant permission to allow this action to go ahead.
It also found that a loan of £5,000 was paid to the sole trustee and then used to settle the trustee’s own debts.
The charity previously had three trustees, but after one died and the other resigned, they were not replaced.
The charity’s financial records show that the three trustees received £31,905 in expenses during 2016 and 2017, but these were not recorded in the accounts.
Amy Spiller, head of investigations team at the Commission, said: “The Grangewood community were treated poorly, by the inadequate way this charity was managed and how decisions were taken. The sole trustee, who should not have made decisions alone, failed in his responsibilities to the charity and let the school community down.
“We took action to support the reopening of the school and protect the charity from suffering further harm, and we’re satisfied it has now made the significant changes to its governance needed, but it should not have taken this level of disruption to pupils, families and staff for this to happen.
“The public rightly hold charities to high standards, and trustees as the custodians of charity, have a responsibility to ensure that they carry out their duties with care and skill.”
The Commission also said that due to the appointment of new trustees on 29 August 2018 and their subsequent engagement “there appears to be no ongoing risk to the charity or its assets”.
The school continued to function throughout the period and remains open.