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Trustee removed for failures including authorising his own expenses

The Charity Commission has found the governance and financial management of the Ummah Welfare Foundation was inadequate, with the charity and its finances left under the sole control of one trustee. The Commission has since removed the trustee from the charity.

Ummah Welfare Foundation is based in Oldham, operating in Manchester and Blackburn, as well as Bangladesh, India and Pakistan. It aims to relieve poverty and sickness and advance education in the world.

The Commission first became involved with the charity in 2013 because the charity only had two trustees and was operating in high-risk areas overseas. An inspection visit revealed further concerns including in relation to cash couriering and cash withdrawals from the charity’s bank account.

The charity was issued with advice and guidance at the time, but follow-up in 2014 showed this had not been complied with. The Commission opened an inquiry to investigate.

The inquiry found the charity and its finances had been under the sole control of one of the two registered trustees. The trustee authorised his own expenses, failed to undertake due diligence when authorising expenditure overseas, failed to keep adequate records of the decision-making processes and failed to properly account for expenditure.

Amy Spiller, Head of Investigations Team at the Charity Commission, said:

Charity can and should lead the way in taking public expectations seriously. This charity’s behaviour fell well below those expectations – with inadequate financial control and no oversight from trustees - a sole trustee made significant decisions alone and engaged in risky practices like cash couriering. It’s right that the trustee responsible has been removed. We expect the new trustee board to comply with our action plan in full.

Although the charity’s administration, governance and management were not fit for purpose at the time of opening the inquiry, the current trustees have recently taken a series of steps to improve and strengthen these areas.

The inquiry issued the current trustees with an order on 15 August 2019, under section 84(2) of the Act, directing them to take a number of actions. The actions are due to be completed by 14 August 2020. If the trustees fail to comply with the order the Commission may take further action.

The full report is available on GOV.UK.