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London: The Charity Commission, which is the independent regulator of charities in England and Wales, has opened formal investigations, known as statutory inquiries under section 46 of the Charities Act 2011, into 2 registered charities — Global Aid Trust Limited (registered charity number 1123560) and Hindu Swayamsevak Sangh (UK) (registered charity number 267309).

Both charities are the subject of an undercover documentary entitled ‘Charities behaving badly’.

Michelle Russell, Director of Investigations, Monitoring and Enforcement at the Charity Commission said:

We are disturbed at the footage we have seen – some of which is so serious it is clearly a matter for the police. Rightly the public will be concerned about the footage and the implications for public trust and confidence in these charities, and the potential impact on the charity sector more generally. We can reassure the public that we take these issues seriously.

These kinds of incidents illustrate why it is important for the regulator to have the right tools to do the job. There are currently loopholes in the existing regulatory framework which we are seeking to close by looking for increased powers in the draft Protection of Charities Bill, Russel said.

The Steadfast Trust, which also features in the documentary, is not a charity and has been removed from the register of charities. This decision was made because it was not clear that the Trust’s beneficiaries, described as “members of the Anglo-Saxon community living in England”, could be identified or are a sufficient section of the public, as required in charity law. As the Trust’s purposes are not charitable for the public benefit, the Trust is not a charity.

Footage relating to the 2 registered charities raises serious regulatory concerns. These will be investigated as part of the inquiries that have been opened.

Regulatory action

In the case of Global Aid Trust Limited, the commission already had a case open into the charity and was already examining concerns of a similar nature to those raised in the programme; the undercover footage obtained is new evidence which will be added to this. The statutory inquiry will investigate the management and oversight by the trustees of the charity’s events and the content of these.

In the case of Hindu Swayamsevak Sangh (UK), this is new information that has been brought to the commission’s attention and that has resulted in immediate regulatory action. The statutory inquiry will investigate comments made by an individual invited to speak at a charity event in the presence of the charity’s beneficiaries and the management and oversight by the trustees of such events.

The trustees of both Global Aid Trust Limited and Hindu Swayamsevak Sangh (UK) have been notified of the commission’s decision to open the inquiries and both have complied with the commission’s requests for information and documents to date. In accordance with our published policy it is our intention to publish a report at the conclusion of each inquiry.

The commission requested and is awaiting access to all of the footage obtained relating to the charities so that this can be reviewed and the regulatory concerns addressed through the investigations that have been opened.

The Charity Commission is encouraging larger charities to make use of a free tool aimed at helping them assess their resilience against fraud.

The Self-Assessment Fraud Resilience (SAFR) Tool, designed by accounting firm PKF Littlejohn and based on large databases managed by it and the Centre for Counter Fraud Studies at University of Portsmouth, is based around 29 questions and allows an organisation to establish how well it is protected against fraud:

• how well it understands the nature and cost of fraud
• whether it has an effective strategy to address the problem
• whether it has a counter-fraud structure which helps it implement its strategy
• whether it takes a range of pre-emptive and reactive action to counter fraud
• the extent to which fraud is addressed and managed like any other business issue

The commission has circulated the SAFR tool to all registered charities with an annual income of over £1m – of which there are around 6,700 – and encourages them to complete it before the end of March.

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The Charity Commission is the independent regulator of charities in England and Wales. Section 46 of the Charities Act 2011 of England gives the Charity Commission the power to institute inquiries.