Charity that ran a bar turns around following statutory inquiry
Charity regulator’s investigation leads to improved governance at Cymmer Workmen’s Hall and Institute.
The Charity Commission has concluded a statutory inquiry into a Welsh social club charity that acted outside its charitable objects by running a bar. The inquiry has worked with the trustees to bring about important governance and structural changes to enable the charity to continue to thrive.
The Charity Commission opened a statutory inquiry into Cymmer Workmen’s Hall and Institute (810098), after finding it was running a licensed bar as part of the charity’s activities. The charity, which was previously included in a class inquiry, had been provided with regulatory advice by the Commission that the running of a bar was not a charitable activity. However, no changes had been made to address this.
The inquiry visited the charity and found that due to unforeseen circumstances there was only one trustee in place, which breached the charity’s governing document. The charity’s governance was compromised by not having a full board of trustees and the sole trustee was unable to carry out their responsibilities. The charity had repeatedly failed to fulfil its accounting obligations, despite extensive regulatory advice from the Commission.
The inquiry found evidence of good practice: the charity’s financial control procedures ensured that all takings were kept in a locked safe and banked frequently by the bar manager. The charity also offered and continues to offer a free range of activities furthering the charity’s objectives and is a popular and successful hub for the local community.
The Commission concluded there had been misconduct and/or mismanagement with regard to the charity’s poor governance and filing obligations. The inquiry issued an Order under section 84 of the Charities Act 2011 to the sole trustee, to address non-compliance with its legal requirements to file accounts. This Order was fully complied with. The inquiry also issued a Fully Regulated Scheme allowing the charity to adopt a new and modern governing document.
As a result of the inquiry, the charity has taken clear steps towards improvement. To separate the bar activities from the charity, a trading company has been formed and the bar now operates from this entity. Three further trustees were also appointed to the board, and meeting notes and decisions between trustees are now formally recorded.
Amy Spiller, Head of Investigations Team at the Charity Commission said:
Charities play vital roles in local communities, strengthening them by providing key services and social activities. To ensure confidence of their communities, it is crucial that trustees make sure they are fulfilling their responsibilities properly to ensure good governance.
I am pleased that our advice and support has helped this charity turn itself around so that it can maximise its benefit to the people it serves. The steps now being taken towards improvement are encouraging. I hope and expect the charity to continue to thrive.
The full report of the inquiry is available on GOV.UK.
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