Charity Commission

5. Mr P complains the Charity Commission (the Commission) will not intervene, act or investigate the concerns he raised to it about a charity (the charity). He complains the Commission will not intervene regarding his allegations about:

• the charity’s financial misconduct/mismanagement in relation to fraudulent invoices • trustee appointments that were not in line with its governing document, and governance instability • trustees using the charity for personal gain and deceiving its donors

6. As a result, he is concerned about the governance and running of the charity and says the Commission’s inaction has compounded the distress he has already experienced as a result of being ‘forced out’ as former CEO and trustee of the charity.

7. In coming to us, he would like to see us instruct the Commission to intervene with the charity so it can investigate and take action against those involved.

8. Mr P was the founder and former Chief Executive Officer (CEO) of the charity.

9. Mr P first contacted the Commission in December 2024. Mr P raised concerns that a who had carried out work at the charity premises had issued what he considered to be incorrect (overinflated) invoices to the charity.

10. He also raised concerns about how the charity removed a chair and trustee of the charity and appointed new trustees, which he asserted was a violation of the charity’s governing document.

11. Mr P also raised concerns that the charity had issued the company with receipts that in his view were being used for tax fraud.

12. In early January 2025, the Commission wrote to Mr P to explain that it contacted the charity and is assured that the charity is already taking appropriate action to address the concerns regarding the financial management of the charity and its governance.

13. The Commission explained it would not be taking further action.

14. Mr P emailed the Commission the same day to express his unhappiness at the Commission’s decision not to take further action. He urged the Commission to act.

15. The Commission treated his email as a complaint about its service and explained it would respond to his complaint within 30 days as part of its stage one complaint process.

16. The Commission provided a complaint response in February 2025. It did not uphold Mr P’s complaint.

17. Shortly after, Mr P remained unhappy with the Commissions response, so he asked for it to be escalated to stage two of its complaint process.

18. The Commission provided its stage two response in March 2025. It explained it would not be taking further action. It signposted Mr P to us if he remained concerned.

19. Mr P came to PHSO via his MP in July 2025. Mr P was unhappy with the Commission for not intervening with the charity and felt the Commission ignored his evidence.

22. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. Our Principles say organisations should make decisions based on all relevant considerations and evidence. In doing so, they should follow their own policies and procedural guidance.

The Commission’s decision not to investigate Mr P’s concerns about the charity

23. Mr P raised concerns about the charity with the commission in late 2024. His concern was in relation to what he deemed to be suspicious invoices that company who had done work for the charity had issued to the charity. Mr P had accessed a portal in March 2024 that he believed showed inflated invoices. Mr P raised concerns about the following:

• Alleged fraudulent invoices being issued and declared paid to the company who completed work on charity premises without trustee knowledge or approval • Governance concerns – fellow trustees appointing trustees outside of the governing document, the auditor interfering with operational matters and general governance instability • Trustees using the charity for personal gain and deceiving donors, regulatory bodies and the community, again mentioning the fraudulent invoices

24. He explained to the Commission he had concerns about the charity accountant and Trustee’s governance, in that the accountant had failed to put in place proper governance and put the charity at risk. He raised concern that the charity’s accountant (who is also a trustee) misled him into resigning as a trustee to assume the CEO role – when in his view he could have stayed a trustee and been compensated for it. Mr P explained that he had concerns that the same trustee appointed new trustees without following due process as the role was not advertised or consulted on.

25. The Commission responded in early January 2025 to explain that it has considered all the information he sent to it. It also looked at information it already holds on the charity as well as information gained from engaging with the charity. The Commission explained it is assured that action is already being taken to address the governance and financial concerns he raised. Therefore, it will not be taking further action.

26. We asked the Commission to provide us with information about the action it took. We are satisfied that the Commission considered this matter and the evidence we have seen assures us it took the issue seriously.

27. We asked the Commission to provide us with more information about its previous and recent involvement with the charity.

28. The Commission explained that there has been multiple reports to it from May to November 2024. It first contacted the charity in July 2024.

29. The Commission also explained that in relation to his concerns relating to fraud and the alleged assault, it is not a prosecuting authority and as those concerns relate to criminal activity, it is a matter for the police. It added concerns about data practices should be reported to the Information Commissioner’s Office (ICO).

30. The objectives, functions and duties of the Commission are set out in the Charities Act. Section 16 sets out the Commissions general duties:

• in performing its function, the Commission must have regard to the need to use its resources in the most efficient, effective, and economic way • In performing its functions, the Commission must, so far as relevant, have regard to the principles of best regulatory practise (including the principles under which regulatory activities should be proportionate, accountable, consistent, transparent, and targeted only at cases in which action is needed).

31. When handling concerns about a charity, the Commission assess the information on a case-by-case basis to decide if there is a regulatory issue and what steps it should take. This is outlined in its Regulatory and Risk Framework (in place at the time Mr P made his complaint).

32. The framework states, the Commission is risk-led in calibrating its response to issues that it received. This approach ensures that no issue or complaint is overlooked, whilst at the same time making sure it is proportionate, prioritises the most serious issues and identifies what action is right against identified risks of harm.

33. The Commission’s Framework explains how it operates. Section 3.2 explains that any assessment it makes regarding assessing risks will take account of a number of factors. It says that:

‘when we have identified a risk, we will assess it to enable us to decide the level of priority that should be applied and the action we should take in responding to it. This assessment takes account of the following:

• the impact of the risk (the harm) • the likelihood of the risk materialising.

34. The Framework says ‘In assessing the impact, we focus on the type and level of harm that may result if the risk materialises. This includes taking account of the size, profile and activities of the charity concerned. Our assessment of the impact and likelihood of the risk materialising will also take account of other relevant factors. These might include, for example:

• the reliability of the evidence that is available • any current or recent regulatory engagement with the charity, including whether we have previously given regulatory advice to the charity about a similar type of risk • action that a charity may have already taken to manage the risk • involvement of other agencies and regulators in managing the risk • We are often alerted to incidents where harm has already occurred. In these cases, we will assess the actual harm of the incident and the risk of future harm.

35. Section 15 of the Charities Act sets out the general functions of the commission and is relevant here:

‘Section 15 The Commission's general functions

The Commission has the following general functions— 1. Determining whether institutions are or are not charities.

2. Encouraging and facilitating the better administration of charities.

3. Identifying and investigating apparent misconduct or mismanagement in the administration of charities and taking remedial or protective action in connection with misconduct or mismanagement in the administration of charities.

(2) The Commission may, in connection with its second general function, give such advice or guidance with respect to the administration of charities as it considers appropriate. …’

36. To come to a view as to whether the Commission assessed Mr P’s concerns about the charity appropriately, we do so by considering the guidance that is relevant. In this case, the Commission’s regulatory and risk guidance.

37. Mr P explained to the Commission that the Trustees of the charity had illegally removed a trustee and appointed trustees which went against the governing document (a legal document which sets out the rules for operating a charity). He wanted the Commission to explain whether it considers the appointments as legitimate and he asserted that if the Commission did not intervene then it is endorsing an unconstitutional takeover of the charity.

38. The Commission explained that it is not for the Commission to determine who the lawful trustees are - this is a matter for a court to consider. It said it remains the Trustees responsibility to remove and appoint trustees in line with their governing document. It said any disputes about this should be settled without the Commission’s intervention. The Commission provided links to more information on trustee appointments and disputes in charities.

39. We have looked at the ‘Finding New Trustees’ document the Commission provided. In this, we can see the guidance says:

‘3.4 Who is responsible for recruiting new trustees?

The short answer (legal requirement) Responsibility for the recruitment of new trustees rests firmly with the existing trustees. They must oversee the management of an open and efficient process and always act in the best interests of the charity.’

40. We also looked at the disputes in charities document. The pertinent parts of the document are that it says that when trustees cannot agree or follow the governing document, they need to get independent external help. This could be through mediation or by ACAS (Advisory, Conciliation and Arbitration Service).

41. The guidance document sets out when the Commission can get involved. This is when there are no trustees in place and that the charity can show all other attempts to resolve the dispute have failed. It also sets out when the Commission will not get involved. This is when the dispute is about trustee decisions or policies. It says that there may be other organisations better placed to get involved.

42. Having considered the available evidence, we are satisfied that the Commission was under no obligation to intervene with the charity’s trustees, it is for the trustees to decide who it appoints. The guidance is clear that a person is to only contact the Commission if all attempts to reach a solution have failed and they have no properly appointed trustees.

Mr P’s concerns about financial misconduct and governance of the charity

43. Mr P raised his concern that trustees have been using the charity’s bank account without justification and are being used for personal gain. He asserts that by the Commission not intervening it is putting the charity at risk and allowing charity funds to be depleted. He asked the Commission whether it has conducted a financial audit.

44. The Commission explained it has not conducted an audit. It has provided regulatory advice to the charity regarding financial management and its engagement with the trustees has addressed the financial concerns. It reiterated to Mr P that it needed to give the charity time to consider its advice and implement the necessary changes.

45. For completeness, we asked the Commission to provide us with more information about the process of issuing guidance and regulatory advice to charities. Specifically, whether the Commission follow up on charities to make sure it has acted on the advice and guidance.

46. The Commission told us it does not have any plans to follow up the charity to make sure it has acted on its regulatory advice and guidance. It says its usual practice is to provide trustees with the advice relevant to the concerns raised and advise the customer of the outcome. The Commission then allows the charity time to consider and act where relevant.

47. The Commission told us where it receives evidence to show the charity is not adhering to the advice and guidance the Commission has provided and this could potentially show mismanagement, it may decide to open a regulatory compliance case, and it will engage the charity trustees. This depends on the seriousness of the issues.

48. The Commission told us that in some cases where it has advised a charity to take specific action to become legally compliant, it may flag the case up for follow up but it does not flag up all cases for follow up when it has provided advice.

49. Section 4.2 of the framework explains how it responds to a risk and that the conduct and response of the Trustees affect its actions:

‘Trustees are the first line of defence in managing risks and dealing with harm relating to their charities. The role of the Commission as regulator is to ensure that trustees are actively and effectively doing this. When we are considering how to respond to a risk or actual harm to a charity, the conduct and response of the trustees will affect our approach. We will consider whether:

• the trustees have acted honestly and reasonably • there are indications that they have been careless or reckless • there has been deliberate or wilful wrongdoing

We will also consider whether the trustees:

• are willing and able to act to manage the risk and/or deal with the harm • are willing to act but are unable to manage the risk and/or deal with the harm themselves • are unwilling to act

If we are satisfied that the trustees have already taken appropriate steps to address risks or harms, we may decide to take no further action. However, where the nature and level of the risk demand it, we will take strong and effective action.’

50. Section 4.3 goes on to explain the options the Commission can respond with in its regulatory work (we have included the most pertinent option in relation to the concern here):

• providing regulatory advice and guidance to trustees to ensure they address regulatory concerns, including in an action plan

51. As noted above the Commission guidance, general functions and Regulatory and Risk framework says the Commission should encourage and facilitate the better administration of charities and as part of that function, can give advice or guidance where it considers it appropriate. We consider this is what it did here.

52. There is no indication of maladministration in the actions taken by the Commission in this matter nor is there any indication in the information we have reviewed, that the actions the Commission were not appropriate and proportionate to the concerns raised and the evidence presented, and in keeping with sections 4.2 and 4.3 of its Regulatory and Risk framework.

Mr P’s concerns about tax evasion, fraud and money laundering

53. Mr P raised concerns that the charity’s accountant had given a developer a false invoice so the developer could commit tax fraud and is concerned about potential money laundering.

54. In all its responses, the commission has repeatedly told Mr P that the Commission is not the right organisation to deal with these issues. It directed him to HMRC, Action Fraud and the Police. It said that the Commission and these organisations have a memorandum of understanding to enable information sharing between organisations. It explained that if those organisations consider his concerns and decide they require the Commission’s assistance, they will contact the Commission.

55. We have considered the Commissions framework here. The framework sets out the limitations of the Commission. At 2.2 the framework says there are limitations to its role as a regulator:

‘we are not a prosecuting authority, although we may ask others to prosecute offences on our behalf. The investigation of alleged criminal offences is the responsibility of law enforcement agencies.’

56. The concerns about financial misconduct Mr P raised are all criminal offences. This means, in accordance with its framework, the Commission will not intervene with these matters. The Commission applied its framework appropriately and decided these issues are not ones that it has the authority to deal with.

57. We can appreciate how strongly Mr P feels about his concerns in relation to his allegations of fraud. It is clear he remains deeply concerned about the charity’s actions.

58. We have reviewed the Commission’s internal assessment notes for this issue. While it did not formally investigate matters, we are satisfied that the Commission took Mr P’s allegations seriously and it satisfied itself that there was no evidence of wrongdoing by the charity. We hope Mr P is reassured by this.

59. Under Our Principles of Good Administration (getting it right) we expect organisations to act according to their statutory powers and duties and any other rules governing the service they provide. The evidence shows the Commission did not have the authority to intervene in the way Mr P wanted it to. As such, its action (or inaction) was in line with both its guidance and our expectations.

1. We have carefully considered Mr P’s complaint about the Charity Commission (the Commission). We have considered the information Mr P has provided, as well as information the Commission gave us.

2. We understand how strongly Mr P feels about the issues he raised with the Commission and the distress and frustration he experienced as a result of the issues within the charity.

3. We consider the Commission’s investigations, actions and responses took account of its own regulations, duties, and guidance, as well as PHSO’s Principles of Good Administration.

4. After carefully considering all the available evidence, we have decided to take no further action as we have seen no indication that anything went wrong with how the Commission dealt with Mr P’s request for it to complete a full investigation into his concerns about the Charity. This is because we can see the Commission followed the relevant legislation and guidance when it dealt with Mr P’s request. We explain how we reached our decision below.