Scottish charity regulator OSCR has intervened after concerns indicating “major issues” were raised last year about a rehabilitation charity’s governance and financial management.
OSCR received concerns from a funder of the Jericho Benedictine Society in September 2024 that the charity faced acute financial issues and was in danger of collapse.
The regulator opened an investigation and successfully petitioned Scotland’s supreme civil court to appoint a judicial factor, who has managed the charity’s property since last October, to the exclusion of the trustees.
One of the charity’s properties was sold following the judicial factor’s appointment, with the organisation receiving the sale proceeds.
The charity’s trustees have raised £6,000 in support of their petition for recall of the judicial factor’s appointment, which is being “vigorously defended” by OSCR.
‘Poor understanding’ of trustee duties
The Jericho Benedictine Society, which was founded 55 years ago and registered as a charity in 1991, operates in Scotland and England and has three trustees.
OSCR said it found a lack of financial controls and information at the charity, which meant it was unclear whether it was able to pay its debts or upcoming expenses, including its around 40 staff.
The regulator found that trustees had a poor understanding of their duties and little insight into the charity’s financial situation or the action that was required to save the charity from financial collapse.
Trustees were also regularly writing cheques from the charity’s bank account for unreceipted expenditure but stopped after being told not to by the regulator.
OSCR said the charity had two properties that were not used for service delivery and could be disposed of to assist in meeting the liabilities, one of which had now been sold.
William Cleghorn of Aver Chartered Accountants was appointed as judicial factor, initially on an interim basis before the role was made permanent in December.
OSCR will report further once its inquiry is concluded.
Trustees fear closure
The charity’s trustees have lodged a petition with the Court of Session to remove the judicial factor and raised over £6,000 in support of this aim.
Their petition says that recalling the judicial factor would “avoid the work that has been done over decades being unwound and properties in Scotland being transferred to a commercial entity as well as transfer of properties down south”.
“The trustees and their successors wish to be able to continue to help the most vulnerable and in particular those who may not be able to afford the help they need,” it says.
The petition adds: “As presently advised the judicial factor of the Jericho Society has been unwilling to engage in discussions with the trustees to see if another solution can be found other than to effectively dissolve the charity.”
In the year to March 2023, the charity’s expenditure (£1.68m) exceeded its income (£1.63m). Its accounts for 2023-24 are overdue.
Related Articles
