Charity Inquiry: Lessons learned for Trustees
On the 16th November 2020, the Charity Commission published its inquiry into the Kenya Community Support Network (“the Charity”).
The Charity Commission opened an inquiry into this Charity having received reports from Comic Relief (its grant funder) in relation to concerns about the use of the Charity’s funds.
The Charity was founded by Mr Samson Ochieng and allegations were raised in relation to mismanagement of the Charity funds. Overall, the inquiry found that Mr Ochieng had been in overall control of the Charity since it was set up and as a result of the inquiry, which found that he had paid £39,500 to his private bank account and his family members, he was disqualified from acting as a trustee.
Reasonable expenses which are incurred by the trustees can be recovered from the Charity’s funds - a defence that the founder gave to the inquiry, however, these expenses were not supported by “third party evidence” such as receipts and invoices.
The Charity Commission disqualified Mr Ochieng from acting as a trustee whilst the other trustees were warned that any of their involvement with other charities in future would be closely monitored by the Charity Commission. The trustees then decided to dissolve the Charity and the Charity Commission ultimately wound up the Charity. Companies House struck the Charity off the Companies Register after having failed to file statutory returns.
The inquiry is important as it teaches trustees a number of lessons to be learned. These are:
- that trustees must act collectively;
- trustees must avoid ‘founder’s syndrome’;
- trustees must ensure there is openness and transparency within the Charity;
- trustees should avoid conflicts of interest;
- trustees should remember that a Charity has its own specific objects and that it is set up for the public benefit rather than private benefit;
- trustees must keep accurate records of expenses.
Overall, these lessons remind us of the trustee duties that all trustees have regard to. The Charity Commissions guidance on trustee duties is a useful document for any trustee to understand what is expected of them. https://www.gov.uk/government/publications/the-essential-trustee-what-you-need-to-know-cc3/the-essential-trustee-what-you-need-to-know-what-you-need-to-do.
The full report of the Charity Commission’s inquiry can be found here:
Posted on: 20/01/2021
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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