The Charity Commission has recently published a case report
concerning its compliance case on The Air Ambulance Service (the
'Charity').
The Charity Commission's case focused on three areas:
- Significant losses (around £111,000) suffered by the Charity following a failed fundraising event in 2012;
- A large loan (£27,000) made to one of the charity's senior employees; and
- A lack of oversight by the Charity trustees.
These issues raised potentially serious regulatory and governance failings at the Charity.
Fundraising event
The failed fundraising event in 2012 involved the charity buying
up seats for the London premiere of The Bodyguard theatre
production, which it hoped to sell to raise funds.
The Charity Commission found that the event was 'poorly
planned and failed to apply proper project management
methodology'. The trustees accepted that the management of the
event was poor, but contended that it had nevertheless helped raise
the Charity's profile and identify future donors.
The Charity Commission found that the; '....processes in place
for managing the event were significantly inadequate and that this
amounted to a serious failure on the part of trustees'.
Loan
The Charity Commission's report indicated that the legal
basis for the £27,000 loan was unclear, and the trustees were
unable to provide evidence of any advice they had received in
relation the loan. Moreover, through its investigation, the Charity
Commission discovered that the board of trustees had found out
about the loan after it had been made by the Charity's chief
executive and chairman.
The Charity Commission noted that the Charity had said that it had
phoned its helpline to discuss the loan, but the Charity
Commission's helpline only provides generic advice and if a
charity requires a formal view, it should apply in writing.
Lack of oversight
The Charity Commission's report noted that the two incidents
indicated that the Charity trustees had not exercised sufficient
control over the chief executive and the chair.
The Charity Commission also found that that the chief executive and
chair did not sufficiently involve the board of trustees as a whole
and instead made strategic decisions themselves that should have
been for the board to make. The Charity Commission noted that this
amounted to a serious governance failure.
Action plan
As a result of its failures, the Charity Commission issued an
action plan to the Charity trustees to improve the governance of
the Charity. The action plan includes (amongst other aspects):
reviewing trustee recruitment, providing training to trustees as
regard their legal duties, reviewing existing risk management
strategies and approval limits and updating processes for future
fundraising.
Following the Charity Commission's recent meeting with the
trustees, it noted that the Charity was making good progress.
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