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Islamic Educational Society of Blackburn shows signs of improvement after regulator finds misconduct and/or mismanagement in running of the charity.

The Charity Commission has issued an Official Warning to trustees of the Islamic Educational Society of Blackburn (registered charity number 526572) after an official inquiry found the trustees acted outside their charitable objects to build a mosque.

The Commission opened a statutory inquiry into the charity on 26 February 2018 after repeated failures to comply with legal duties to file accounts.

Investigators carried out a books and records inspection, which revealed failings in the charity’s financial controls including inadequate oversight by the trustees. This resulted in serious breaches of the charity’s cash handling policy; during an incident unrelated to the charity, Greater Manchester Police found over £6000 of the charity’s cash was being held by an individual who was at the time associated with the charity. The money was seized and later returned to the charity.

The inquiry found that the trustees acted outside their charitable purposes in constructing a mosque using funds intended for the advancement of education. The advancement of religion is a worthwhile charitable purpose however the trustees should have amended the charity’s governing document before undertaking this significant project. This remains an outstanding issue that the trustees must urgently address.

Investigators also engaged with the charity on the issue of safeguarding following an incident in January 2018 involving an individual associated with the charity. Although the trustees took the appropriate steps in response to the incident, they failed to report this to the Commission in line with the serious incident reporting regime.

The inquiry concluded that the poor financial management and governance of the charity amounted to misconduct and/or mismanagement, and has issued the trustees with an Official Warning under section 75A of the Charities Act 2011. This sets out steps they must take to address the regulatory concerns.

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

It is vital that those running charities act in line with their rules of governance. By constructing a mosque, these trustees distracted from their original charitable mission and purpose; this was just one symptom of the failings we identified in the running of this charity. The public rightly hold charities to high standards; this case should serve as a reminder to all trustees of the importance of getting governance right.

The trustees have already taken some steps to rectify the mismanagement, complying with an Order issued under section 84 of the Charities Act directing the trustees to prepare and submit the outstanding accounts. They have also carried out a review and taken steps to ensure an adequate safeguarding policy is now in place.

Amy Spiller added:

I am encouraged by these steps towards improvement. I hope and expect the trustees to move the charity forward responsibly so that they can maximise the impact on the community it serves.

The full report of the inquiry is available on GOV.UK.

Notes to editors:

1. The Commission expects rectification action to be undertaken within the timescales set out in the Official Warning.
2. The power to issue charities or individuals with an Official Warning was granted by the Charities Act 2016. It is designed to ensure a charity or its trustees know that a breach, misconduct or mismanagement has taken place and that it needs to be rectified.
3. The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work please see the about us page on GOV.UK.

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