Charity Commission restricts international aid charity’s spending amidst a statutory inquiry
The charity regulator for England and Wales has today (3 October 2024) announced its statutory inquiry into Barnabas Fund (also known as Barnabas Aid) after identifying several serious concerns regarding its compliance with charity law and the use of charitable funds.
The Commission is investigating issues, including allegations of unauthorised payments to some of the current and former trustees and related parties, allegations that the charity’s founders have inappropriate control or influence over how the charity operates, and possible unmanaged conflicts of interest. The inquiry will also seek to establish if the charity’s structure and relationship with Nexcus, a US-based subsidiary, is in the best interests of the charity. Some of these issues have since been reported on in the media.
Due to concerns that the charity’s funds may have been misused in the past, and questions as to the trustees’ oversight, the Commission has used its powers to temporarily restrict any transactions the charity intends to make which are over £4,000. This is to protect the charity’s significant income and assets – Barnabas Fund reported an income of over £21m and assets of over £2.3m in its latest accounts.
The inquiry opened on 17 September 2024, escalating from a regulatory compliance case. It will examine whether the trustees are running their charity in line with their legal duties and charity law; particularly in relation to managing finances, conflicts of interest, and preventing unauthorised trustee and third-party benefits. The investigation will also check if spending is correctly recorded, examine relationships with other organisations, and explore the influence of non-leaders on decision-making.
The inquiry will also consider:
- whether the charity is operating in furtherance of its objects
- whether there has been any misconduct and/or mismanagement by the trustees in the administration of the charity
The scope of the inquiry may vary if additional regulatory issues emerge. The opening of an inquiry is not a finding of wrongdoing.
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.
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Notes to editors
- The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive. This ambition will help to create and sustain an environment where charities further build public trust and ultimately fulfil their essential role in enhancing lives and strengthening society.
- On 17 September the Charity Commission opened a statutory inquiry into the charity under section 46 of the Charities Act 2011 as a result of its regulatory concerns that there is or has been misconduct and/ or mismanagement in the administration of the Charity.
- The Charity Commission has issued an order under s76(3)(f) of the Act to the trustees restricting all transactions over £4,000.
- A statutory inquiry is a legal power enabling the Commission to formally investigate matters of regulatory concern within a charity and to use protective powers for the benefit of the charity and its beneficiaries, assets or reputation. An inquiry will investigate and establish the facts of the case so that the Commission can determine the extent of any misconduct and/or mismanagement; the extent of the risk to the charity, its work, property, beneficiaries, employees or volunteers; and decide what action is needed to resolve the concerns.
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