In September 2013, the Charity Commission opened a statutory inquiry into charities that were in default of their reporting obligations by failing to file their annual accounts for two or more of the last five years and had remained in default despite a final warning. 12 charities were part of the initial inquiry and a further 12 were added in November 2013. Of the 24 charities, seven remain part of the inquiry.
In April 2014, the Commission added a further 33 charities to the inquiry, 17 of which have still not complied. The Commission has now issued inquiry reports on four of the charities which are no longer in default: the Haringey Education Business Partnership Ltd (HEBP); First Asian Support Trust (FAST) Limited; Newcastle Central Mosque Masjid Al-Tawhid; and Sheffield Reclamation Limited.
As part of its investigation, the Charity Commission used its powers under sections 52 and 84 of the Charities Act 2011 to order and obtain bank records and to direct trustees to prepare and complete their missing annual accounts, reports and returns. Any issues arising from the Commission's scrutiny of the accounts will by followed up with the charities separately.
Only two of the charities, HEBP and FAST, gave reasons for failing to file their documents which included staff absences, public holidays and waiting for information from accountants. The Commission noted in its statement that 'even if reporting responsibilities are given to professional advisers, ensuring accounts are submitted on time remains the legal duty of the trustees. Failure to submit annual documents when required to by the Commission is a criminal offence and the regulator says that it amounts to mismanagement and/or misconduct in the administration of the charity'.
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