Charity Commission
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Regulator restricts bank and fundraising platform transactions as it launches inquiry into health charity

Significant irregularities in charity’s accounts prompts investigation into J.E.L.A Foundation.

The Charity Commission, the independent regulator of charities in England and Wales, has opened a statutory inquiry into J.E.L.A Foundation (1137349). The inquiry was opened on 14 January 2018.

The London-based charity has objects to improve the lives of people particularly, but not exclusively, living in Haiti and those of Haitian descent residing in the UK through the advancement of education and training and the promotion of good health.

Following scrutiny of the charity’s financial accounts, the Commission found a number of irregularities which raised serious concerns. After obtaining bank statements under section 52 of the Charities Act 2011, the Commission identified a discrepancy in excess of £200,000 between what was declared in the charity’s annual returns for the last five years, and the bank transactions carried out during the same period.

In addition the Commission found repeated payments, several times a month over a number of years to a charity trustee, and also identified a pattern of donation payments totalling over £700,000 from individuals to the charity, including two trustees and a potentially connected party. This raises concern that there may have been misapplication of charity funds and possible personal benefit.

In order to protect the charity’s assets, the Commission issued an order under section 76(3)(d) of the Charities Act restricting the charity’s access to its bank accounts and prohibited three major online fundraising platforms used by the charity from parting with funds without prior approval from the Commission. The Commission issued an additional order under section 76(3)(f) of the Charities Act preventing trustees from undertaking further fundraising with alternative online platforms until further notice.

The Commission is also concerned that there are insufficient trustees to be compliant with the charity’s rules of governance; only four individuals are listed in the accounts, whilst the charity’s governing document requires a minimum of five trustees.

The inquiry will therefore examine whether:

  • the charity has been operating for exclusively charitable purposes for the public benefit in furtherance of its charitable objects;
  • the financial controls of the charity are adequate and its funds have been properly expended and can be accounted for;
  • the trustees have complied with legal duties in respect of their administration, governance and management of the charity;
  • the trustees compliance with legal obligations for the content and preparation of the charity’s accounts and other information or returns is in line with the statutory requirements;
  • the trustees may have knowingly or recklessly provided the Commission with information which is false or misleading.

It is the Commission’s policy, after it has concluded an inquiry, to publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were. Reports of previous inquiries by the Commission are available on GOV.UK.

Notes to Editors

  1. The Charity Commission is the regulator of charities in England and Wales. To find out more about our work see the about us page on GOV.UK.
  2. Search for charities on our check charity tool.
  3. Section 46 of the Charities Act 2011 gives the Commission the power to institute inquiries. The opening of an inquiry gives the Commission access to a range of investigative, protective and remedial legal powers.
  4. Section 76(3)(d) of the Charities Act 2011 gives the Commission the power to order any person who holds any property on behalf of a charity, or of any trustee for a charity, not to part with property without the approval of the Commission.
  5. Section 76(3)(f) of the Act give the Commission the power to restrict the transactions which may be entered into in the administration of a charity without the approval of the Commission.

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Channel website: https://www.gov.uk/government/organisations/charity-commission

Original article link: https://www.gov.uk/government/news/regulator-restricts-bank-and-fundraising-platform-transactions-as-it-launches-inquiry-into-health-charity

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