Charity regulator freezes bank accounts as it opens investigations into grant-giving

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The Charity Commission has opened two separate statutory inquiries into The Jalloh Charitable Trust (1145466) and The Deacons Charitable Trust (1142038), both London-based charities which aim to further general charitable purposes through grant-giving.

The Commission opened a statutory inquiry into The Jalloh Charitable Trust on 21 May 2019. During the initial stages of this investigation it is was found that the trustees of The Jalloh Charitable Trust, were also the trustees of The Deacons Charitable Trust. Upon further assessment, an inquiry was also opened into The Deacons Charitable Trust on 14 June 2019.

The two trustees are potentially related via marriage, highlighting apparent unmanageable conflicts of interest and calling into question whether key decisions have been made in the best interests of the charities or for the private benefit of the trustees. The Charity Commission has also found that the independent examination of accounts has been compromised and inconsistently applied. The Commission’s inquiries will examine the extent to which the trustees are complying with their legal duties in respect of the administration, governance and management of the charities.

The Charity Commission has serious concerns about the administration of The Jalloh Charitable Trust, which was previously included in a class inquiry due to its failure to submit annual accounting information.

Examination of the accounts revealed concerning transactions including the charity making loans of over £500,000 to a trustee and purchasing ‘a valuable collection of Judaica and other antique silver’ from a trustee.
As a result of its concerns, the regulator has taken protective action to freeze the charity’s bank account and instructed the trustees not to part with any of the property of the charity without consent of the Commission.

The inquiry into The Jalloh Charitable Trust will examine:

  • whether potential conflicts of interest and connected party transactions have been properly managed;
  • whether there has been any unauthorised trustee benefit;
  • the trustees’ compliance with legal obligations for the preparation and filing of the charity’s accounts and other information or returns; and
  • the extent to which the trustees have complied with previously issued regulatory guidance.

A review of the accounts and bank statements of The Deacons Charitable Trust revealed a number of similar regulatory concerns, including loans to a trustee of over £150,000 and multiple payments totalling over £17,000, which the inquiry is concerned may have been spent on school fees for an individual connected to the trustees.

The Commission has taken immediate steps to protect the charity’s assets by issuing an order to freeze the account of the charity.

The inquiry into The Deacons Charitable Trust will examine:

  • whether potential conflicts of interest and connected party transactions have been properly managed;
  • whether there has been any unauthorised trustee benefit; and
  • the trustees’ compliance with legal obligations for the preparation of the charity’s accounts.

The Commission intends to publish separate reports of its inquiries upon conclusion, detailing what issues the inquiries looked at, what actions were undertaken, and what the outcomes were. Reports of previous inquiries by the Commission are available on GOV.UK.

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Notes:

  1. The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work please see the about us page on GOV.UK.
  2. The Commission does not investigate criminal allegations which are matters for the police.

/Public Release. View in full here.