Whistleblowers punished and abused for reporting financial breaches to charity law The charity manages a Hindu temple and community centre . An accountant, a member of the congregation for many years, was asked to become a trustee and offer his professional expertise to the charity. When examining the accounts, he discovered various financial irregularities. He also realised and confirmed that the charity did not comply with its own written constitution or charity law. He recognised the need to put procedures in place to ensure the charity was compliant. A number of the trustees refused to consider the required compliance changes and additionally refused to prevent or stop the continuing financial irregularities. As such he considered it his responsibility as a trustee under charity regulation to report his concerns to the Charity Commission.
Issues
- The Commission upheld all the complaints and concerns raised by the whistleblower and determined that there were widespread issues of wrongdoing and serious failings by the trustee board.
- The Commission acknowledged that there were serious financial irregularities including mismanagement of charity funds, unconstitutional payments of charity funds to trustees and the charity accounts not being audited as per constitution.
- The Commission ignored the serious and protracted nature of the financial issues and determined that the trustee board (responsible for the financial wrongdoing) could decide whether those involved should repay monies received. The trustee board decided trustees involved did not need to repay the money.
- The Commission determined that the issues could and would be solved by giving the trustee board an action plan rather than taking any other regulatory action
- The Commission allowed the charities financials to be published as true in the full knowledge that they had not been considered or signed off by an Independent Examiner.
- The Commission ignored all further complaints including information and evidence that the trustees were not following and refused to follow the Commission action plan.
- The charity is a membership org, the Commission are fully aware that the chair and remaining trustees are ignoring and abusing the charity’s constitution by issuing voting memberships to chosen people. The Commission refuses to act within their regulatory remit and ensure that the legally binding constitution is followed by the trustee board.
- The Commission refuse to hold the current management to account for their previous and current actions and refuse to ensure that the trustee board conform to the law and manage their charity lawfully. The Commission is responsible for the continued and increasing damage to the charity itself.
- The Commission recommended mediation as part of their plan. The complainants agreed to mediation the guilty trustees did not. The guilty trustees and their family and friends (also trustees) proceeded to ban the complainants from membership of the charity and from its premises. Their crime, complaining to the Commission.
- The Commission's refusal to use their regulatory powers and their subsequent lack of any meaningful action has supported the board to ban the 6 trustees who supported the repayment of the misappropriated funds and supported constitutional compliance, for 3 years. They are now banned from their place of worship, their community centre and their congregation.
- The whistleblower who originally reported the concerns to the Commission, has himself been banned for 10 years. This is absolutely devastating for those involved.
- The Commission has no interest or regard for the damage that has been done to the whistleblower or the individuals that supported the Commission's action plan. The impact on the physical and mental health by the Commission's inaction is of no consequence to the Commission.
- The trustee board is actively using the Commission's lack of regulatory action to defame the whistleblower and ex trustees. The community is understandably confused about who is telling the truth. The general assumption is that if serious wrongdoing has taken place the Commission would visibly act, they have not. The community only see that the trustee board is still in place and that previous trustees involved with the complaints have been banned with the apparent permission and support of the Charity Commission.
- As with all cases we are considering, the Commission have allowed the charity to lie to Officers and have permitted and ignored this criminal act.
The Commission has little knowledge or understanding of faith communities and they are failing the traditional communities who were, 10 years ago, forced by law to register as charities. In this case honest and decent people with deep, lifelong beliefs and faith have been banned from their place of worship, and ostracised within their community. Some are elderly people who have been part of that community for decades. The damage done to the people cannot be underestimated or overlooked. Their only crime was to insist on honesty and try to prevent fraud by reporting to the appropriate authorities. This so-called authority and regulatory body the Charity Commission however does not act. The public deserves to know this so they can choose whether to put themselves at risk.
Conclusion
Charity Sanity agrees that the Charity Commission cannot get involved in determining internal matters or resolving disputes in charities, that is appropriate. However, it is the Commission's role to ensure that charities obey charity law and UK law. This case is not an internal matter and it cannot be resolved by mediation. Trustees have been personally involved in wrongdoing and misappropriation and receipt of charity funds. The Commission in their wisdom, have determined it entirely appropriate for those same trustees, guilty of financial impropriety, to decide whether they need to pay back the funds they themselves have misappropriated.
It is clear that the trustees have acted against the best interests of the charity and continue to do so. The Commission has the power to act but refuses to do so. The Commission demonstrates their complete disregard and disrespect for the public and the loss of publicly donated charity funds, funds misappropriated via theft and fraud. It is hard to understand how the regulatory body charged with protecting our charity and ensuring that charities comply with the law can permit the people responsible for stealing our money to continue in their positions, inaction that supports and allows them to continue stealing and breaking the law.
This situation is not unique In cases similar to this one the Commission are fully aware that fraud and theft has occurred but they forgive and often support those responsible for the wrongdoing, to continue. By this response the Commission actively supports and encourages wrongdoing. This particular charity may have more complaints made against it, ignored if they are from the original whistleblower, and unlikely to be investigated appropriately if from others. As with this
complaint the Commission can choose to ignore or to act. If the Commission are still receiving complaints in 4 years time they may eventually consider a statutory inquiry. Please note, it takes a lot of determination for people to continue to complain when their complaints are ignored and the consequences of complaints are so personally damaging.
Complaint fatigue means that charities continue with their wrongdoing unchecked whilst the Commission pat themselves on the back for a job well done. The amount of money misappropriated should not matter, it is the acts of fraud and theft that matter. In what other situation are fraudsters and thieves supported and encouraged by those who are charged with preventing fraud and theft.
