Regulator disqualifies charity trustees for inadequate financial and safeguarding practices
The Charity Commission has concluded that there was serious misconduct and / or mismanagement in the administration of Salvation Proclaimers Ministries Limited.
Today (Thursday 22 August 2024), the Charity Commission has published its inquiry report into Salvation Proclaimers Ministries Limited, also known as SPAC Nation. The Christian charity, which has been removed from the register, held religious services at venues in London and organised community and outreach events.
The report concludes that the charity’s trustees are responsible for serious misconduct and/or mismanagement over safeguarding practices and financial failures over a substantial period of time. Further to this, the trustees failed to act with reasonable care and skill, including while the inquiry was open. The trustees also repeatedly failed to address the Commission’s regulatory concerns.
The Commission has used its powers to disqualify three current trustees from being a charity trustee for a period of 12 years each and a former trustee for 10 years.
In December 2019, the Commission opened an inquiry into the charity after it identified serious financial, governance and safeguarding concerns. These included that the majority of the charity’s income and spending was not going through a bank account.
The inquiry’s findings reveal that the charity’s safeguarding practices were inadequate. Houses associated with the charity and intended to support the local community were set up. The houses were also the homes of church leaders, and the inquiry subsequently found the nature of the relationship between the charity and the houses was unclear.
Safeguarding risks were mitigated during the inquiry as the charity stopped holding services and other events in person due to the Covid-19 pandemic in 2020 and it also subsequently ceased to operate.
Failings in the trustees’ oversight of safeguarding amounted to misconduct and / or mismanagement in the administration of the charity.
The regulator’s inquiry also found that the charity’s financial record keeping was inadequate, including for payments that could have posed a reputational risk to the charity.
The inquiry was highly critical of the charity’s use of cash. Donations and expenditure were not properly recorded and there was also found to be a lack of segregation of duties between the pastors and the trustees. As the assets of the charity were not held centrally, the trustees did not have oversight and control of the charity’s assets, and these were exposed to the risk of misapplication and / or misappropriation.
The Commission issued an Order in December 2019, directing the charity to bank all of its cash, however the trustees informed the regulator that they had decided to stop collecting donations. The trustees never reversed this decision. The inquiry’s view was that the trustees failed to provide convincing reasons as to why this was in the best interests of the charity. Trustees are responsible for their charity’s financial security and should have plans for generating and spending income.
The inquiry found that the trustees’ operation of the charity put funds at risk resulting in a finding of misconduct and / or mismanagement.
In January 2022, the Insolvency Service applied for a petition for a public interest winding up order against the charity. The petition included that the charity failed to cooperate with the Insolvency Service’s investigation; discrepancies in the information provided to the Insolvency Service and the Commission compared to that provided to its accountant; and that it operated without transparency and filed “suspicious and incorrect” accounts at Companies House and with the Commission. The High Court accepted the petition and a winding up order was issued on 15 June 2022.
Amy Spiller, Head of Investigations at the Charity Commission, said:
The community placed its trust in this charity and its leaders and was sadly let down by repeated serious failings in its financial and safeguarding practices. Safeguarding should be a priority for all charities, and the trustees should have considered doing more to strengthen its safeguarding practices. Operating in cash also exposed the charity to risks such as loss, theft and the cash being used outside of the charity’s purposes.
Our intervention prevents three current trustees and one former trustee from holding trustee or senior roles in other charities and so helps to protect the wider sector.
The full report detailing the findings of the inquiry can be found on gov.uk.
ENDS
Notes for editors:
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The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive.
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The inquiry was opened in December 2019 under section 46 of the Charities Act 2011.
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On 18 January 2022 the Insolvency Service applied for a petition for a public interest winding up order, under Section 124A of the Insolvency Act 1986, to wind up the charity. The High Court accepted the petition and a winding up order was issued on 15 June 2022.
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The charity was removed from the register of charities on 24 June 2022 on the grounds that it did not operate.
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On 24 November 2023, three current trustees were disqualified from being a charity trustee and from holding any office or employment with senior management functions in a charity for a period of 12 years each and a former trustee for 10 years. These Orders took effect from 5 January 2024. ‘Current trustees’ are those who were in post during the inquiry but have been disqualified and are no longer acting as trustees
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The Commission has an important, but specific and limited role with regards to safeguarding. Our focus is on the conduct of trustees and the steps they take to protect beneficiaries, employees, volunteers and others who come into contact with the charity through its work. The Commission is not responsible for dealing with incidents of actual abuse or harm, does not administer safeguarding legislation and cannot prosecute or bring criminal proceedings.
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Our 5-minute guide for charity trustees on managing charity finances outlines how to ensure that a charity’s money is safe, properly used and accounted for: Managing charity finances - GOV.UK (www.gov.uk)
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