Charity Regulator Issues Official Warning to East London Mosque Trust Over £1 Million Investment Loss
The Charity Commission, the independent regulator of charities in England and Wales, has issued an Official Warning to the East London Mosque Trust after an investigation found that the charity’s trustees had failed to exercise sufficient oversight over a £1 million investment deal, resulting in a significant loss.
According to the Charity Commission’s official announcement, the East London Mosque Trust, which has been in existence since 1910, had invested £1 million in an NHS-approved supplier with the expectation of a 20% return in six months. However, the supplier was forced into administration, resulting in a loss for the charity. An investigation by the Charity Commission found that the charity’s due diligence regarding the investment deal was not thorough enough, and the trustees failed to properly scrutinise key documents concerning the investment.
The Charity Commission criticised the trustees for their lack of effective oversight and failure to act with reasonable care and skill, which contributed to the loss of the charity’s funds. This, the regulator stated, constitutes misconduct and/or mismanagement. The Commission had previously warned the charity about the need to ensure it had sufficient control over its funds, and the trustees’ failure to act on this warning has resulted in further regulatory action.
As reported by the Charity Commission, the Official Warning issued to the East London Mosque Trust requires the charity to take remedial action to address the regulator’s concerns. Specifically, the charity must ensure that financial controls are put in place and that there is adequate oversight of the charity’s funds to protect its assets going forward. The charity is also expected to conduct an independent review of its governance and report the findings to the Commission. Furthermore, the regulator expects the charity to take all reasonable steps to recover the lost funds.
In response to the Official Warning, Joshua Farbridge, Head of Compliance Visits and Inspections at the Charity Commission, said: “When people donate to a charity, they put their faith in those running it to manage those funds with care and in line with its aims. In this case, we found the trustees lacked the oversight we’d expect of such a large investment, nor did they ensure thorough due diligence had been undertaken.” Farbridge emphasised that the Charity Commission expects all charities to promptly act on steps provided in an Official Warning and will be monitoring the East London Mosque Trust’s progress.
The Charity Commission regulates over 170,000 charities in England and Wales, and its role is to ensure that charities operate in a way that is transparent, accountable, and in line with their charitable objectives. The regulator has a range of powers, including the ability to issue Official Warnings, which are used to address regulatory concerns and require charities to take corrective action. In this case, the Official Warning issued to the East London Mosque Trust serves as a reminder to charities of the importance of robust governance, effective oversight, and prudent management of charitable funds.
The East London Mosque Trust has six months to take remedial action and address the Charity Commission’s concerns. The charity’s progress will be monitored by the regulator, which will take further action if necessary. As the Charity Commission continues to scrutinise the charity’s actions, it is clear that the regulator is committed to ensuring that charities operate with integrity and in accordance with regulatory requirements.
In accordance with regulatory guidelines, charities must prioritise robust financial controls, governance, and oversight. The Charity Commission provides guidance on internal financial controls and decision-making, emphasising the importance of considering risks and recording the basis of decisions. By following these guidelines, charities can minimise the risk of financial loss and ensure that donations are used effectively to achieve their charitable objectives.
Charities can access The Charity Commission’s guidance on internal financial controls and decision-making via their official website. The guidance provides a comprehensive framework for charities to manage their finances effectively and make informed decisions. By adhering to these guidelines, charities can maintain public trust and confidence, ultimately fulfilling their essential role in enhancing lives and strengthening society.
For more information on the Charity Commission’s role and responsibilities, visit their official website. The website provides a wealth of information on charitable regulation, including guidance on governance, financial management, and regulatory requirements. By working together, charities and regulators can promote a culture of transparency, accountability, and integrity in the charity sector.
The Charity Commission’s Official Warning to the East London Mosque Trust serves as a reminder to charities of the importance of robust governance, effective oversight, and prudent management of charitable funds. As the regulator continues to monitor the charity’s progress, it is clear that the Charity Commission is committed to ensuring that charities operate with integrity and in accordance with regulatory requirements.
Quotes from the Charity Commission emphasise the importance of charities prioritising robust financial controls, governance, and oversight. As the Charity Commission continues to scrutinise the charity’s actions, it is clear that the regulator is committed to promoting a culture of transparency, accountability, and integrity in the charity sector.
Further details on the case can be obtained from the Charity Commission’s official website. The website provides a comprehensive overview of the regulator’s role and responsibilities, as well as guidance on charitable regulation and governance. By working together, charities and regulators can promote a culture of transparency, accountability, and integrity in the charity sector.
To ensure charities operate effectively and maintain public trust, the Charity Commission will continue to monitor the East London Mosque Trust’s progress and take further action if necessary. The regulator’s commitment to promoting a culture of transparency, accountability, and integrity in the charity sector is clear, and the Charity Commission will continue to work with charities to ensure they operate with integrity and in accordance with regulatory requirements.
Charities can access further guidance and resources from the Charity Commission’s official website. The website provides a wealth of information on charitable regulation, including guidance on governance, financial management, and regulatory requirements. By working together, charities and regulators can promote a culture of transparency, accountability, and integrity in the charity sector.
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