Article
27 June, 2017
On Friday, the Charity Commission published its Inquiry Report following lengthy engagement with an educational charity governed by trust deed. The principal activity of the Rabia Educational Trust is the operation of an independent school and its charitable objects are "to advance the education of boys and girls in accordance with the Holy Quran and the Hadith according to Sunni Islam.
The Commission had been attempting to engage with the charity from as early as 2012 in connection with the following numerous concerns, which read very much like a caricature of "how not to run a charity":
This example demonstrates the Commission's array of regulatory powers, with the following measures being employed before the statutory inquiry was commenced:
The section 46 Charities Act 2011 Inquiry itself began in earnest on 2 May 2016 after the trustees failed to respond to the deadline provided in the 2015 action plan. The inquiry found that the charity's administration, governance and management was not fit for purpose but that the trustees have now taken appropriate steps to address the shortfalls identified. The Commission noted that there is still work for the trustees to do in order to satisfy the Commission that it is capable of operating the school compliantly. The inquiry therefore directed the trustees by a section 84 Charities Act 2011 order to take specific actions to ensure regulatory compliance and to regularise the deficiencies in a number of third party agreements. The Commission will no doubt monitor the charity's compliance with the section 84 order and may well take further steps in the future.
The entire report smacks of a charity's trustees not being entirely aware of their obligations and failing to take appropriate legal and other professional advice on transactions in what is a heavily regulated sector.
Forbes Solicitors regularly advise charities, MATs, housing associations and other businesses on their governance and regulatory requirements; transactions and other projects; and questions on their constitution, including providing training. If you have any questions, please contact Daniel Milnes.
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