A charity that received large amounts of money from Tower Hamlets Council carried out unauthorised expenditure amounting to hundreds of thousands of pounds with no evidence of an audit trail, a report has confirmed.
Gross financial mismanagement took place at the Bangladeshi Parents and Carers Association charity between 2009 and 2011, the Charity Commission has concluded, adding that there appears to have been “one or more occasions” of fraud taking place.
In February 2012, Tower Hamlets Council, a major funder of the charity, commissioned an investigation into its finances, and the charity also conducted an independent review of its own.
In a statement the Charity Commission said the individual responsible for the mismanagement now lives abroad, having been removed by the trustees.
The Commission said: “The trustees acted responsibly by reporting the concerns to the police.
“When they were made aware of it, the trustees took professional advice, and took steps to prevent potential further loss of funds by carrying out an independent audit and seeking help from the council who assisted them in improving and strengthening their financial control systems.
“The Commission ensured the trustees considered the possibility of recovering the misappropriated funds. The trustees sought legal advice but were informed that it would not be feasible to seek recovery as the person involved now lives abroad.”
The police investigated but concluded they would be unable to take further action at this stage.
Michelle Russell, the Charity Commission’s director of investigations, said: “This report highlights what can happen in a charity where there are poor financial controls.
“In this instance, the charity was able to continue operating and the trustees have worked with the Commission and the main funder of the charity to learn from the experience and implement a number of recommendations to strengthen its financial controls and governance.”
Shamimara Choudhury, current chief executive of the Bangladeshi Parents and Carers Association stressed the incidents of mismanagement happened five years ago.
She told the East End Citizen: “We’ve put in place all the recommendations and all the advice that we were given. Everything’s running smoothly and we’ve tightened up the finances so there can’t be any mismanagement. All our accounts are publicly available.”