Charity watchdog issues first ever “official warning” to council for failing to properly manage 13 charities
The Charity Commission for England and Wales has issued Calderdale Council with an Official Warning of misconduct and/or mismanagement after it failed to comply with its duties as trustee of 13 charities.
The watchdog found the council had failed to file annual returns and accounts for all 13 charities, which have been overdue for “several years”.
Charities overseen by the local authority include several assets which are important to the local community, such as Bacup Road Recreational Ground, Tetley Memorial Park and Public Central Library, the regulator noted.
It said: “As trustees, councils are responsible for running the charity and managing its assets as well as upholding all duties expected of any trustee. This includes filing annual returns with the Charity Commission.”
To rectify the mismanagement set out in the Official Warning, the council was told to file all outstanding accounts.
The watchdog also recommended the council to:
• implement processes to ensure all 13 charities are compliant with their accounting responsibilities going forward
• provide up-to-date contact details for all charities
• locate and identify all 13 charities on a local register containing details about the charities and their assets
• hold regular trustee meetings, ensuring all councillors are aware of their duties and responsibilities – treating all charities as separate entities
• review financial controls of all charities, taking steps to record and implement processes as well as provide evidence of this action to the Commission.
This is the first time the Charity Commission has issued a local authority with an Official Warning.
Last month, the regulator’s Chief Executive wrote to all local authorities warning them of the “significant administrative headaches” councils could face from any failure to correctly comply with their duties.
In his letter, David Holdsworth set out actions they can take to ensure compliance with their duties, including reviewing the regulator’s newly updated guidance for local authorities as charity trustees and supporting guide for councillors.
The letter also advised charities to keep a register of charitable assets and land held, to help ensure any council correctly manages them in their capacity as a trustee.
Tracy Howarth, Assistant Director of Regulatory Services, at the Charity Commission said: “All trustees have a responsibility to their charities and beneficiaries to ensure that their charities are well managed. This is a duty that is really important when vital community assets are in their care.
“In failing to file accounts or take action, even after we provided advice and gave support to comply with our instructions, Calderdale Council fell below the standard we, and the public, expect of trustees. In light of this we have now issued it with an Official Warning, which is the first time we’ve used this power with any council.
“All local authorities who serve as trustees should take note of our advice to ensure they understand what it means to be a trustee.”
The regulator warned that failure by Calderdale Council to take remedial steps and any additional breach of duty “may lead to further regulatory action”.
Cllr Scott Patient, Calderdale Council’s Deputy Leader, said: “We acknowledge the official warning from the Charity Commission and are taking this very seriously.
“We accept that our work to file accounts for the charities for which we are Trustee should have been better, and the delay does not meet our high service standards.
“We are confident that the charitable purpose of all the charities is being fulfilled.
“We are working to correct the delayed filing of accounts and will act on all of the Charity Commission’s requirements. We will learn from this and put procedures in place to make sure it doesn’t happen again.”
Lottie Winson
