Hospice Aid UK has said it will make a formal complaint after the Charity Commission opened a statutory inquiry into its finances.
The charity said the inquiry is based on inaccurate accounts submitted to the Commission by its previous auditors, which have now been corrected.
It added that this will cause “considerable distraction” and “disruption” to a fundraising initiative planned at the end of the month.
Hospice Aid UK has been investigated before. In 2014 the charity was the subject of a statutory inquiry which led the Commission to issue trustees with a formal action plan. This required it to carry out certain actions in order to improve the charity’s governance, to place it in a better financial position, and ensure its agreement with direct marketing agency, Euro DM, was transparent to the public.
The inquiry found that the charity raised £1.45m in three years but spent just £79,000 on beneficiaries.
The Commission said that a recent review of the charity’s 2018 accounts has raised “a number of concerns”. This resulted in the opening of the new inquiry.
The inquiry will look into the proportion of the charity’s income that is applied for exclusively charitable purposes and the adequacy of the fundraising arrangements. Among other things, it will also look at the extent to which the charity is solvent and financially viable and the adequacy of the trustees’ policies and procedures.
Jo Gratze, chief executive of Hospice Aid UK, said: “We have challenged the premise of the Charity Commission’s inquiry into Hospice Aid UK (HAUK), which is based on inaccurate accounts submitted to the Charity Commission by the charity’s previous auditors. The Charity Commission is in receipt of the correct accounts, and examination of these will show no irregularities and that the charity is in a strong financial position.
“HAUK will now be making a formal complaint against the Charity Commission for not considering the revised accounts when deciding to open the inquiry and issue its press release.
“The Charity Commission has ignored the significant improvements in governance and the financial progress made by HAUK over the last few years.
“There is a major fundraising event planned by HAUK for the end of this month and this inquiry will cause considerable distraction from and disruption to this, as well as damage to the charity’s reputation, at a time when it is preparing to increase charitable activities to support those most in need of its assistance.”