Action plans for misconduct and/or mismanagement

14th April 2022

Humanity Torbay

In August 2019, the Charity Commission became concerned about a charity called Humanity Torbay for its inappropriate use of social media and the lack of financial controls in place for the governance of the charity. It provided regulatory advice and guidance to the trustees in 2019 and 2020 regarding political campaigning by the charity’s founder and then CEO. Humanity Torbay existed to educate and advise the local community on health, wellbeing, housing, employment, and referrals to local food banks.

The Commission began to question the charity’s governance on social media use, after the founder of the charity, Ellie Waugh, criticised the current government using the charity’s Facebook page. The Commission made it clear that the trustees should ensure that comments made on behalf of the charity must comply with the Commission’s guidance. Any comments made must only be made to further the charity’s objects. The guidance provides that the charity should be clearly disassociated from any personal political views to prevent causing harm to the charity’s reputation.

The Commission opened a statutory inquiry in June 2020 into whether the trustees had complied with the previously issued regulatory advice and guidance and whether they had responsibly managed the charity’s resources and financial affairs, complied with their duties generally and whether the charity’s governance was fit for purpose.

The inquiry issued Humanity Torbay with an action plan which included the removal of the Facebook posts and review of the charity’s policy’s regarding social media use, and the trustees were directed to ensure that this did not happen again.

Ms Waugh continued to post personal political views on the charity’s Facebook page and limited attempts were made to remove the political material from Facebook by one of the trustees.

The inquiry found that the Facebook page was owned by Ms Waugh, which explained why the trustees could not remove all the posts and why Ms Waugh used that specific page to post her own political views. By March 2021, all charity details were removed from the Facebook page.

The Commission directed the trustees to provide minutes from meetings between January 2019 and 2022 to study the trustees’ decision-making process and their oversight and control of the charity and its founder

The inquiry revealed that the trustees did not keep records of donations and bank deposits, the accounting records did not comply with the requirements of the Charities Act 2011, and it was unclear who authorised the expenditure. Evidence found by the inquiry strongly suggested that the trustees did not maintain appropriate financial controls for the charity which the Commission considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

In summary, the trustees breached their legal duties and responsibilities by failing to control and prevent material being posted on their social media page in the name of the charity and by the lack of financial governance. This, combined with a fall in funding, meant that eventually the charity had to wind up and close its operations. The Commission removed Humanity Torbay as a charity in March 2021.

Ms Waugh accepted a voluntary undertaking under which she will not act as a charity trustee or hold any office or employment with senior management functions for any charity in England and Wales for a period of four years.

Rossendale Valley Mencap

A statutory inquiry has been opened into a charity based in Lancashire, as the charity has failed to keep up to date with filing its accounts. In 2017, the Commission issued two action plans to Rossendale Valley Mencap, a charity which supports people with learning disabilities and their families. Rossendale Valley Mencap were directed to sort out their overdue accounts and issues relating to their governance. The charity did not comply with either of the action plans, which led to the regulator escalating the matter to an inquiry.

The Commission is considering:

  • whether there is a sufficient number of trustees who are actively managing the charity and its resources in accordance with its governing document
  • the assets of the charity and whether they had been misapplied
  • whether the trustees have complied with their obligations regarding the filing of accounts and returns
  • the trustees’ compliance with previously issued regulatory guidance
  • whether there are appropriate safeguarding measures in place for vulnerable beneficiaries.

This inquiry is on-going.

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