William Eichler 07 October 2016

Tower Hamlets charity victim of ‘gross mismanagement’ and fraud

A Tower Hamlets charity was the victim of ‘gross mismanagement' and fraud, according to a report published today by the Charity Commission.

An inquiry into the Bangladeshi Parents and Carers Association revealed there was gross financial mismanagement at the charity between 2009 and 2011. It also uncovered evidence of fraud.

In February 2012 Tower Hamlets Council, one of the charity’s funders, commissioned an investigation into its financial practices which revealed unauthorised expenditure of £104,296 with no evidence of an audit trail.

The investigation, supplemented by an inquiry by the charity itself, also showed the Association’s reserve account had reduced from £812,486 to £80,933 with no evidence to explain why.

The Charity Commission’s final report concluded there had been ‘gross mismanagement’ and fraud.

However, it complemented the charity’s trustees for acting responsibly by reporting the concerns to the police and carrying out an independent audit.

The report also points out the trustees sought legal advice on the possibility of recovering the money but were informed this would not be feasible as the person involved now lives abroad.

‘This report highlights what can happen in a charity where there are poor financial controls,’ said Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission.

‘In this instance, the charity was able to continue operating and the trustees have worked with the Commission and the main funder of the charity to learn from the experience and implement a number of recommendations to strengthen its financial controls and governance.’

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