Consequently, the charity received an official warning from the Charity Commission. It is the first time a charity has issued an official warning under new powers given to it by the government.
NHBCH’s accounts show that the charity owed Mrs Watson £62,000 after she gave the money in an unsecured loan – with trustees agreeing a repayment of £30,000.
The figures from 2015/16 show her daughter was paid £17,849 in salary and expenses during the year for her work as a fundraiser.
The Charity Commission asserted NHBCH trustees,
‘Committed a breach of trust or duty after making unauthorised payments to a connected person and entering into an informal loan agreement with a connected person.’
Due to the nature and seriousness of the issues, the Charity Commission gave the trustees a chance to resolve them but failed to fully comply with the action plan to do so. The Charity Commission therefore concluded that it was appropriate and proportionate to issue the charity with an official warning to promote compliance.
The warning given specifies the actions the Charity Commission considers NHBCH needs to take to resolve the outstanding issues and prevent any further regulatory breaches. These include ensuring payments to individuals are made lawfully and that consent from the watchdog is obtained if necessary.
If you require advice on charity regulation compliance or assistance on how to resolve and prevent breaches, please do not hesitate to contact David Gibson – Head of Charities Fundraising Regulation at Short, Richardson & Forth on 0191 211 1524 or email, Andrew Swan – Head of Regulation and Financial Crime or Sheila Ramshaw - Specialist in Regulation & Financial Crime.