{"id":23418,"date":"2019-12-25T17:46:21","date_gmt":"2019-12-25T16:46:21","guid":{"rendered":"https:\/\/everyday.ng\/?p=23418"},"modified":"2019-12-25T17:46:21","modified_gmt":"2019-12-25T16:46:21","slug":"full-report-of-uk-govts-charity-commission-on-christ-embassy","status":"publish","type":"post","link":"https:\/\/everyday.ng\/?p=23418","title":{"rendered":"Full Report of UK Govt&#8217;s Charity Commission on Christ Embassy"},"content":{"rendered":"<div style=\"width: 400px;\" class=\"wp-video\"><video class=\"wp-video-shortcode\" id=\"video-23418-1\" width=\"400\" height=\"224\" preload=\"metadata\" controls=\"controls\"><source type=\"video\/mp4\" src=\"https:\/\/everyday.ng\/wp-content\/uploads\/2019\/12\/VID-20191217-WA0003.mp4?_=1\" \/><a href=\"https:\/\/everyday.ng\/wp-content\/uploads\/2019\/12\/VID-20191217-WA0003.mp4\">https:\/\/everyday.ng\/wp-content\/uploads\/2019\/12\/VID-20191217-WA0003.mp4<\/a><\/video><\/div>\n<ol>\n<li>Charity Inquiry: Christ Embassy<\/li>\n<\/ol>\n<p>Published 14 November 2019<br \/>\nContents<br \/>\nThe Charity<br \/>\nCharity Structure<br \/>\nTrustees<br \/>\nIssues under Investigation<br \/>\nFindings<br \/>\nConclusions<br \/>\nRegulatory Action Taken<br \/>\nAppointment of an interim manager<br \/>\nIssues for the wider sector<br \/>\nThe Charity<br \/>\nChrist Embassy (the charity) was registered on 19 November 1996. It is governed by a Declaration of Trust dated 23 October 1996.<br \/>\nThe charity\u2019s entry can be found on the\u00a0register of charities.<br \/>\n<strong>Charity Structure<\/strong><br \/>\nThe charity was established in South London in 1996. The charity\u2019s Headquarters is located at the Loveworld Conference Centre (commonly referred to as the \u201cChrist Embassy International Office\u201d), in Folkestone, Kent and is supported by three sub offices situated in Bermondsey, Croydon and Hendon. The sub-offices operate in excess of ninety churches throughout the country, providing religious services to in excess of five thousand beneficiaries.<br \/>\nThe charity has a trading subsidiary company called Christ Embassy Limited (Company Registration No. 05862298) which became a subsidiary in 2012. The trading subsidiary shares the charity\u2019s UK headquarter premises. The trading business involves the production, sale and distribution of religious books and media products.<br \/>\nThe charity\u2019s reported income in the year ending 31 December 2013 was \u00a314,055,229 and its expenditure was \u00a315,923,977.<br \/>\n<strong>Trustees<\/strong><br \/>\nDuring the Commission\u2019s engagement with the charity (since 2012) there have been numerous trustees in office. The table below only lists the trustees who were in office for a part of the inquiry.<br \/>\nTrusteeFromToA (Reverend Christian Oyakhilome)23 October 199617 May 2014B (Reverend Anita Oyakhilome)6 April 19992 June 2015C (Pastor Obioma Chiemeka)6 October 200913 October 2015D (Pastor Nkemakonam Odiakah)6 October 200915 February 2016E (Pastor Ifeoma Onubogu)6 October 200912 February 2016F (Pastor Uche Onubogu)17 May 201426 January 2015G (Pastor Tony Obi)17 May 201416 October 2015H (Reverend Raymond Okocha)17 May 20148 August 2017<br \/>\nTrustee A resided in Nigeria and was the founder and international leader of the charity. His wife, trustee B, resided in the UK and was leader of the UK based charity.<br \/>\nTrustees B, D and F were also paid employees of the charity during periods of their trusteeships, which was permitted by their governing document in particular circumstances.<br \/>\nFollowing the appointment of an Interim Manager and full governance review, a new board of trustees (the new board of trustees) was appointed on 12 April 2016 who are now responsible for the administration and management of the charity going forward. Significant progress has been made to address the governance and improve oversight and control by the new board of trustees.<br \/>\n<strong>Issues under Investigation<\/strong><br \/>\nOn 29 July 2013, the Commission opened a statutory inquiry (the Inquiry) into the charity under section 46 of the Charities Act 2011 (the Act).<br \/>\nThe Inquiry closed with the publication of this report.<br \/>\nThe scope of the Inquiry was to examine a number of issues including:<br \/>\n&#8211; the transactions between the charity and \u201cpartner organisations\u201d that include grants made to a number of unidentified entities and Loveworld Television Ministry, Healing School, International School of Ministry, Christ Embassy France, Christ Embassy Canada, IPCC Conference and Rhapsody of Realities<br \/>\n&#8211; the administration, governance and management of the charity by the trustees with specific regard to connected party transactions in respect of payments to Loveworld Limited and the management of conflicts of interest<br \/>\n&#8211; the financial controls and management of the charity<br \/>\n&#8211; whether or not the trustees had complied with and fulfilled their duties and responsibilities as trustees under charity law<br \/>\n<strong>Findings<\/strong><br \/>\nTransactions between the Charity &amp; \u201cpartner organisations\u201d<br \/>\nThe Inquiry team examined the accounts of the charity, for the period 2009-2011 which showed that the charity had paid substantial grants to organisations classified as \u201cpartner organisations\u201d.<br \/>\nDuring 2009-2011, the charity\u2019s accounts show grants amounting to \u00a31,281,666 were paid to Loveworld Television Ministry; \u00a3118,995 to Healing School, \u00a3186,616 to International School of Ministry, \u00a310,000 to Christ Embassy Canada, \u00a310,566 to Christ Embassy France, \u00a337,216 to IPPC Conference and \u00a377,266 to Rhapsody of Realities.<br \/>\nThe trustees provided the Commission with a copy of their grant making policy, and admitted to the Inquiry that \u201cPrior to the involvement of the Charity Commission the grant making practice consisted of a discussion by the Trustees at a Trustee meeting regarding who should receive grant\u201d.<br \/>\nFollowing his appointment on 6 August 2014, the Interim Manager (the IM) examined the charity\u2019s records and found no evidence of compliance with the Grant Making Policy. Documents examined, by the IM, demonstrated a lack of records and receipts to account for grants made and there appeared to be little consideration given to whether the receiving parties had expended grants appropriately and for intended purposes, as was required by the policy.<br \/>\nThis demonstrates failure to comply with its grant making policy and inadequate recording of decision making by the trustees which is misconduct and\/or mismanagement in the administration of the charity.<br \/>\nAdministration, governance and management of Charity by trustees-specific regard to connected party transactions in respect of payment to Loveworld Limited (also known as Loveworld Television Ministry \u2013 registered number 4691981) and management of conflict of interest<br \/>\nThe inquiry had serious concerns regarding the trustees\u2019 decision making relating to the charity\u2019s relationship with Loveworld Limited.<br \/>\nIt was established that Trustee C, was the sole shareholder of Loveworld Limited since its incorporation in March 2003. Trustee C had also been trustee of the charity between October 2009 and October 2015. The primary objective of the Loveworld Limited was to advance Christian programming in the UK and to provide entertaining and educational programmes for the diverse demographics of the UK, which it did by carrying out both radio and television broadcasting services.<br \/>\nThe trustees informed the Inquiry, payments made by the charity to Loveworld Limited were not grants\/donations as indicated in their accounts but represented payments for broadcasting services provided by the company to the charity. On 28 March 2013, the trustees were asked to provide all documentation held by the charity or its trustees that recorded the decisions made in respect of the payments by the charity to Loveworld Limited. On 19 September 2013, the trustees provided only two sets of minutes of trustee meetings (minutes of trustees meeting dated 6 January and 6 April 2012) that appeared relevant to the issue. However, neither set of minutes included any decision or resolution to make payments to a company of which one trustee was sole shareholder.<br \/>\nThe trustees did not have any formal contracts in place, or indeed rationale for using Loveworld Limited as opposed to any other broadcaster. Additionally the IM, during his inspection of books and records found no evidence to suggest that any of the trustees considered whether the costs charged by Loveworld Limited were better value than the costs charged by any other service provider. The trustees have failed to take, or have failed to record, any proper decisions as to why such payments are in the best interests of the Charity.<br \/>\nThe IM confirmed that as early as 2009, the Audit Report highlighted to trustees that transactions with organisations and companies controlled by trustees were required to be disclosed in the financial statements as related party transactions. Auditors also recommended that trustees seek professional advice on whether these payments were permitted under their governing document, discuss and decide whether the payments were in the best interests of the charity and minute those discussions, ensuring that any conflicted parties withdraw from the meeting during discussions. The IM\u2019s investigation into these matters found that this advice had not been followed and in particular there was no evidence that the trustees had sought legal advice.<br \/>\nThe IM\u2019s scrutiny of charity records and documents demonstrated that the trustees had failed to comply with the terms of the charity\u2019s governing document and that they failed to comply with the requirements of section 185 of the Act in paying for services by a company owned by a trustee.<br \/>\nAdditionally, the Inquiry identified that the charity had purchased a property in March 2006, costing \u00a31.8 million and allowed Loveworld Limited free use of the property from 2006 until September 2012. The trustees informed the Inquiry that Loveworld Limited had only occupied a \u201csmall part of the premises\u201d, on an informal basis, with the charity using the premises themselves until February 2014. They informed the Inquiry that the arrangement had been formalised since 2012 and the company was charged \u00a375,000 per year for use of the property. The Inquiry considers that this level of rent indicates that Loveworld Limited occupied a substantial proportion of the building.<br \/>\nThe trustees failed to demonstrate that rent for occupation of the premises was a properly assessed market rent which would cover the charity\u2019s overheads. The trustees stated, that the yearly rental income covered all mortgage costs incurred by the charity, however later stated that the charity\u2019s annual mortgage payment was higher than this.<br \/>\nIt was unclear to the Inquiry how the permitted, free use of the premises to Loveworld Limited between 2006 -2012 was in the best interests of the charity and was properly authorised.<br \/>\nThis indicates that the trustees failed to act in the charity\u2019s best interests or with reasonable care and skill in terms of their decision-making and in the negotiation of the arrangements with Loveworld Limited and in not seeking appropriate advice regarding formalising occupation of premises by the company. In addition, the fact that the charity was also subsidising a proportion of the company\u2019s utility bills indicates a lack of reasonable care and skill and a failure to use the charity\u2019s resources responsibly. These actions were not in the charity\u2019s best interest or in furtherance of its objects and were misconduct and\/or mismanagement in the administration of the charity.<br \/>\n<strong>Ventaja Limited<\/strong><br \/>\nAn audit conducted by the IM on appointment also identified purchases in excess of \u00a330,000 by the charity from Ventaja Limited \u2013 trustees\u2019 reports and financial statements for year ending 31 December 2013: the charity declared \u00a344,925 of purchases made from Ventaja Limited for decorating and the construction of a stage. The company was wholly owned by Trustee G. The payments were made while, Trustee G was church pastor and zonal pastor (prior to being appointed trustee in May 2014). His wife was also director of the company, church pastor and a salaried employee of the charity. The IM found evidence indicating that Trustee G had employed the services of Ventaja Limited to provide services to the charity but it was unclear from the charity\u2019s records what considerations were made regarding potential conflicts of interest. It is unclear to the Commission that the decision making trustees, in position at the time payments were made, were acting only in the interests of the charity.<br \/>\nThe trustees failed to provide any records to evidence that conflicts of interest had been identified or correctly managed prior to the opening of the Inquiry. Although the trustees provided the inquiry with a copy of their new \u201cConflicts of Interest Policy\u201d in their 2013 response, they did not have any policy which covered the conflict which arose as a result of Trustee G, being a church pastor and trustee, authorising payments from his church to his company and therefore effectively paying his own company. The trustees failed to demonstrate that they had recognised or properly managed conflicts of interest. Consequently the Inquiry found this was misconduct and mismanagement in the administration of the charity.<br \/>\n<strong>Financial control &amp; management of the Charity<\/strong><br \/>\nWhen interviewed by the Inquiry in October 2013, the trustees explained the structure and administration of the charity to the Commission. The structure involved Chapters (also known as churches) within the charity which were spread across the UK with the use of over 100 premises. The IM found that cash collection and payment recording processes were not uniform across the charity, with a number of basic key controls (for example timely bank reconciliations or maintenance of the SAGE records ) found to be lacking.<br \/>\n<strong>Bank Accounts\/Assets<\/strong><br \/>\nThe inquiry identified nine active bank accounts that the trustees identified as holding funds belonging to Christ Embassy Nigeria (Christ Embassy Nigeria is a separate company to the charity). The inquiry found no evidence to suggest that any of the banking institutions were aware that they were holding funds controlled by Christ Embassy Nigeria. In addition, the accounts were not named in such a way as would indicate the funds are controlled from Nigeria: for example, two of the active accounts are named Christ Embassy East London.<br \/>\nThe inquiry, not being satisfied that the funds held in these accounts were owned by Christ Embassy Nigeria, exercised legal powers and issued orders dated 8 august 2014, under section 76(3)(d) of the Act, freezing six of these nine bank accounts, protecting funds to a value of \u00a3615,420.<br \/>\nIn the absence of clear evidence to support the trustees\u2019 position, the Inquiry concluded that funds held in the accounts belonged to the charity and these accounts remained frozen until the order was revoked on 24 August 2016. The Inquiry being satisfied that the new board of trustees had assumed control of the charity\u2019s property discharged the freezing order on 24 August 2016.<br \/>\nThis demonstrates the trustees\u2019 failure to deal with the bank accounts appropriately and their lack of understanding of financial management and the importance of clearly identifying the charity\u2019s property and\/or assets held on behalf of another entity and is mismanagement and\/or misconduct in the administration and governance of the charity by the trustees.<br \/>\n<strong>Tax related issues<\/strong><br \/>\nThe IM informed the Inquiry that the trustees\u2019 failed to submit the charity\u2019s 2010-11 and 2012-13 Self-Assessment Tax returns on time to HMRC thereby incurring penalties for late submissions. In addition, the IM found that the trustees had failed to comply with information Notices issued by HMRC thus incurring further penalties.<br \/>\nThe trustees\u2019 non-compliance and failure to submit the charity\u2019s Self-Assessment forms within statutory deadlines resulted in scrutiny by HMRC creating a risk to the charity\u2019s assets in regard to financial penalties incurred and is further evidence of trustees failing in their duty to protect and manage resources responsibly.<br \/>\nGift Aid is available on donations made by UK tax payers such that the charity can reclaim the tax already paid on the donation by the donor. This means the charity can receive an extra 25p for every \u00a31 donated. It is the trustees\u2019 responsibility to ensure that the charity has effective systems and internal controls in place to ensure complete and accurate returns are made, reducing the risk of amounts being reclaimed by HMRC and ensuring that the charity receives the Gift Aid promptly and with confidence.<br \/>\nThe IM established that the charity had failed to maintain:<br \/>\n&#8211; sufficient records or processes to show that expenditure by employees had not been an employee benefit and therefore subject to tax<br \/>\n&#8211; sufficient records to show that charity vehicles were being used solely for charitable purposes and not used by trustees\/employees for private use<br \/>\n&#8211; sufficient records to support the charity\u2019s claim to Gift Aid and to demonstrate the expenditure was in fact charitable<br \/>\nThe IM dealt with these inquiries and agreed a settlement with HMRC. During discussions with HMRC, the IM made payments on account of \u00a3250,000 in order to minimise interest\/penalty charges. The IM informed the Inquiry, in excess of \u00a31.4m of expenditure was disallowed by HMRC and became subject to tax.<br \/>\nThe IM reached final settlement over these matters prior to his discharge.<br \/>\nThe trustees\u2019 failure to maintain sufficient records and processes to account for expenditure resulted in scrutiny by HMRC creating a risk of criminal proceedings and loss to the charity\u2019s assets in regard to tax liabilities and is further evidence of trustees failing in their duty to protect and manage resources responsibly.<br \/>\nWhether complied and fulfilled duties and responsibilities as trustees under charity law<br \/>\nThe Inquiry found a number of breaches of their legal duties by the trustees as evidenced in the previous sections of this report. Additionally the Inquiry found evidence that the trustees exposed the charity, its assets and\/or its beneficiaries to harm or undue risk for example:<br \/>\n<strong>Property Related matters<\/strong><br \/>\nThe charity is unincorporated, and as such does not have legal personality and cannot hold property in its own name. Instead property must be held on behalf of the charity by nominated individuals (known as holding trustees, and often in practice one or more of the charity\u2019s trustees). From time to time these individuals will change for example due to retirement or death, and the legal ownership of the property will need to be transferred to the new trustees to ensure that the Land Registry records are accurate.<br \/>\nThe charity\u2019s main asset other than cash was its ownership of a number of properties. The Inquiry identified 3 UK properties that were not disclosed to the Commission in the trustees\u2019 first responses or during the October 2013 meeting. The trustees asserted that despite the legal title of the properties being vested in the name of two of the charity\u2019s trustees, the properties \u201cwere acquired on behalf of, and held in trust for, Christ Embassy Nigeria\u201d.<br \/>\nThe Inquiry noted that the Land Registry entries in respect of the 3 properties made no reference to the beneficial owner being Christ Embassy Nigeria and documentation supplied by the trustees provided no evidence to support their assertions. None of the Land Registry proprietorship registers differed in any material way from those of the properties originally disclosed to the Commission as belonging to the charity. These matters were explored further by the IM. His investigations confirmed that the properties were held legally and beneficially by the charity and that there was no trust in place suggesting they were held on behalf Christ Embassy Nigeria.<br \/>\nThe Inquiry obtained evidence that the trustees\u2019 failed to ensure land registry details for charity properties were amended once trustees resigned. This was raised a number of times by Auditors in their reports from 2009 onwards and as a result the trustees failed in their duties and responsibilities as trustees to act in the charity\u2019s best interests.<br \/>\nTrustees are equally responsible for the overall management and administration of the charity. Every charity\u2019s accounting records must be sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position. Trustees should ensure that financial controls are not only adequate but provide sufficient information to satisfy the trustees that the controls are being observed. If, due to the nature of the charity, its work, location and \/or set up the trustees delegate supervision of financial arrangements to one or a small number of trustees or employees, they need to ensure that there are arrangements in place for proper reporting back to the whole trustee body. In this way, system failures or issues can be identified at an early stage.<br \/>\nTherefore, in order to show that they are complying with their legal duties, trustees must keep records and an adequate audit trail to show that the Charity\u2019s money has been properly spent on furthering the Charity\u2019s purposes for the benefit of the public.<br \/>\n<strong>Conflicts of Interest Policy<\/strong><br \/>\nCharity trustees should ensure that they have a conflicts of interest policy in place to ensure that they are fully aware of their responsibilities and that any conflicts that do arise are appropriately managed.<br \/>\nWhere a charity trustee has a conflict of interest they should follow the basic checklist set out in the Commission publication\u00a0Conflicts of interest: a guide for charity trustees (CC29)\u00a0and where necessary or appropriate take professional advice.<br \/>\nThe law states that trustees cannot receive any benefit from their charity in return for any service they provide to it or enter into any self-dealing transactions unless they have the legal authority to do so. This may come from the charity\u2019s governing document or, if there is no such provision in the governing document, the Commission or the Courts. Further information is available from\u00a0Trustee expenses and payments (CC11).<br \/>\n<strong>Charity Property<\/strong><br \/>\nCharity trustees have a general duty to manage their charity\u2019s resources responsibly, reasonably and honestly. This means not exposing their charity\u2019s assets, beneficiaries or reputation to undue risk. It is about exercising sound judgement and then taking decisions that a reasonable body of trustees would do.<br \/>\nTrustees must put appropriate policies, procedures and safeguards in place and take all reasonable steps to ensure that these are followed.<br \/>\nIf a charity owns land or buildings, trustees need to know on a continuing basis what condition it is in, that it is being properly used, and that adequate insurance is in place. The essential trustee: what you need to know, what you need to do (CC3) makes clear that decisions about charity land and property are important. If the charity owns or rents land or buildings, the trustees need to:<br \/>\n&#8211; make sure the property is recorded as belonging to the charity<br \/>\n&#8211; know on what terms it is held<br \/>\n&#8211; ensure it is properly maintained and being correctly used<br \/>\n&#8211; make sure the charity has sufficient insurance<br \/>\nA charity\u2019s governing document or the general law can provide a \u2018power to insure\u2019. If the governing document imposes a positive duty to insure, if trustees then fail to insure property, this will be a breach of trust. More details are available in the Commission\u2019s guidance\u00a0Charities and insurance (CC49).<br \/>\n<strong>Trustee Decision Making<\/strong><br \/>\nCharity trustees are responsible for governing their charity and making decisions about how it should be run. Making decisions is one of the most important parts of the trustees\u2019 role. Trustees can be confident about decision making if they understand their role and responsibilities, know how to make decisions effectively, are ready to be accountable to people with an interest in their charity, and follow the 7 principles that the courts have developed for reviewing decisions made by trustees. Trustees must:<br \/>\n&#8211; act within their powers<br \/>\n&#8211; act in good faith and only in the interests of the charity<br \/>\n&#8211; make sure they are sufficiently informed<br \/>\n&#8211; take account of all relevant factors<br \/>\nignore any irrelevant factors<br \/>\nmanage conflicts of interest<br \/>\nmake decisions that are within the range of decisions that a reasonable trustee body could make<br \/>\nIt is important that charity trustees apply these 7 principles when making significant or strategic decisions, such as those affecting the charity\u2019s beneficiaries, assets or future direction.<br \/>\n<strong>Insurance<\/strong><br \/>\nThe Inquiry found that the trustees failed to secure adequate insurance to protect charity assets and protect against claims for accidental damage to property\/or compensation for accidental injury to third parties. The IM was made aware of an outstanding claim in February 2015, brought by a member of the congregation who was injured at a charity premises in 2012. The IM sought to identify whether any relevant insurant was in place. The trustees confirmed that there was no relevant insurance cover and following legal advice obtained by the IM, he settled the claim, in order to avoid lengthy and costly litigation.<br \/>\nThe failings of trustees to act appropriately left the charity open to financial and reputational risk and losses, as well as to risk of litigation.<br \/>\n<strong>Planning &amp; Building<\/strong><br \/>\nThe trustees failed to ensure that a property purchased by the charity had the necessary planning permission for use as a place of worship &#8211; D1 use as Non-Residential institutions, which include a place of worship and church hall. The previous owner had applied for permission to use the property as a place of worship, in 2003 but the planning application had been refused by the local authority. The charity appealed the decision unsuccessfully. Enforcement action was commenced by Southwark Council (18 April 2011). This was also unsuccessfully appealed by the charity. The continued unauthorised use of the premises as a place of worship by the charity, exposed it to enforcement action by the Council. The IM team liaised with the Council to permit a planned exit from the premised which was vacated in January 2015.<br \/>\nThe existence of the enforcement notice is a criminal matter. Any breach of the enforcement notice and continued unauthorised use of the premises as a place of worship exposed the charity to prosecution by Southwark Council. Legal advice obtained by the IM confirmed that the breach could have led to criminal sanctions being imposed against the charity and potentially exposed the charity to confiscation proceedings under the Proceeds of Crime Act.<br \/>\nThis demonstrates the trustees\u2019 lack of understanding regarding planning law and regulations which exposed the charity to substantial financial risk as well as legal costs.<br \/>\n<strong>Conclusions<\/strong><br \/>\nThe Inquiry concluded that there was serious misconduct and\/or mismanagement in the charity\u2019s administration. The former trustees, at the relevant times had not complied with or fulfilled their duties as trustees under charity law. They failed to:<br \/>\n&#8211; exercise reasonable care and skill in the execution of their roles and as a result exposed the charity to risk and financial loss<br \/>\n&#8211; ensure sufficient financial controls and procedures to protect the charity\u2019s property file their annual accounting information, in accordance with their statutory obligations, on time<br \/>\n&#8211; ensure that conflicts of interest were effectively managed comply with the terms of the charity\u2019s governing document in relation to remuneration of trustees<br \/>\n&#8211; obtain professional advice during their decision making process and to properly record their decision-making<br \/>\n&#8211; comply with planning law and regulations and adhere to enforcement notices, causing the charity substantial financial loss<br \/>\n&#8211; address the need for Health &amp; Safety compliance and the lack of adequate property insurance exposed the charity to considerable losses which could have been avoided or minimized with proper management and prompt action<br \/>\nIn light of the findings and evidence of misconduct and\/or mismanagement, the Inquiry exercised its legal powers under section 79(2)(a) of the Act to remove two of the trustees of the charity. However the trustees subject to regulatory action resigned prior to the Commission being able to complete the process. Section 79(5) and 82 of The Charities (Protection and Social Investment ) Act 2016 has closed this loophole, thereby allowing the Commission to proceed to remove a charity trustee who has resigned following the Commission having given notice to the charity trustees of its intention to make a removal order. The law has since been amended so that resignations following the Commission issuing a notice of intention to remove a trustee would not prohibit the trustee\u2019s removal and consequent disqualification from action as a trustee in the future.<br \/>\n<strong>Regulatory Action Taken<\/strong><br \/>\nDuring the course of the Inquiry the Commission exercised its legal powers (Sections 47, 52 and 54 Charities Act 2011), provided by the Act, to issue various orders and directions for the purposes of information gathering from local authorities, private individuals and companies, including financial institutions.<br \/>\nThe Inquiry directed trustees to a meeting on 18 October 2013 to discuss regulatory concerns and seek further explanation from the trustees. The charity\u2019s books and records were also inspected on 13\/14 November 2013.<br \/>\nThe Inquiry, being satisfied in accordance with section 76(1) of the Act, that there had been misconduct and \/ or mismanagement in the administration of the charity and that it was necessary or desirable to act for the protection of the property of the charity, used a number of regulatory powers, under the following sections of the Act:<br \/>\n&#8211; section 76(3)(d) orders (8 August 2014), directing the banks not to part with the charity\u2019s property without the Commission\u2019s prior written consent, protecting \u00a3615,420 of the charity\u2019s funds<br \/>\n&#8211; section 76(3)(g) appointing an Interim Manager on 6 August 2014 (appointment to take effect from 11 August 2014) and then under 337(6) varying the order (25 January 2016) to authorise the Interim Manager to appoint a new board of trustees<br \/>\n&#8211; section 337(6) discharging (18 November 2014) the order not to part by further order, once the Interim Manager assumed control of the charity\u2019s property<br \/>\nThe former trustees exercised their right to appeal (8 August 2014) to the First-tier Tribunal, General Regulatory Chamber (Charity) against the order appointing the Interim Manager. The appeal was withdrawn on 20 January 2015 with the charity\u2019s legal representatives, notifying the Commission that the trustees were \u201cnow willing to accept that the statutory threshold under section 76 of the Act was met in the present case\u201d.<br \/>\n<strong>Appointment of an interim manager<\/strong><br \/>\nThe Inquiry appointed an interim manager, Rod Weston of Mazars LLP, (the IM) on 6 August 2014 under section 76(3)(g) of the Act to take over the management and administration of the charity to the exclusion of trustees. The trustees were not excluded from performing the religious and\/or spiritual functions connected with their roles as Pastors within the charity.<br \/>\nThe scope of the IM\u2019s appointment included:<br \/>\n&#8211; taking control of the management and administration of the charity to the exclusion of trustees and taking steps to secure and protect charity property<br \/>\n&#8211; reviewing the governance and administration of the charity and taking remedial action in the best interests of the charity<br \/>\n&#8211; reviewing the charity\u2019s financial controls, systems and reporting procedures, safeguarding funds and ensuring proper expenditure controls and governance<br \/>\n&#8211; consider whether any of the decision making trustees were personally liable for any breach of duty\/loss of the charity, taking remedial action to regularise any breaches of duty in the best interest of the charity<br \/>\nThe costs of the IM\u2019s appointment, including legal advice and fees that would have been necessary and incurred by any trustee, amounted to \u00a31,244,983.50 excluding VAT. The costs of the IM\u2019s appointment were met out of the charity\u2019s funds and are itemised as follows:<br \/>\n&#8211; fees directly related to work as IM &#8211; \u00a3390,358.40<br \/>\n&#8211; professional fees &#8211; \u00a3854,625.10 (relating to work conducted by 3rd parties on behalf of the IM)<br \/>\nIn addition \u00a3208,000 of work was undertaken by the IM on a pro bono basis.<br \/>\nAs part of his appointment, the IM completed a full governance and infrastructure review of the charity and its activities. His initial findings, on 9 October 2014, corroborated the Commission\u2019s regulatory concerns relating to the charity, reporting that \u201cthe board of trustees appears to be fragmented\u201d and \u201cappear to have little appreciation of their roles, duties and obligations as Trustees\u201d. He identified a number of Health and Safety risks and concerns as well as legal issues relating to property matters which had failed to be dealt with by the trustees and which posed financial risks to the charity. The IM\u2019s investigations found failings in the charity\u2019s governance, leadership and management structures and personnel, including identifying that the charity had insufficient financial controls and procedures.<br \/>\nRemedial actions were taken to regularise the charity\u2019s governance to ensure it was fit for purpose. This encompassed the following:<br \/>\nestablishing a central record of all properties leased and\/or rented by the charity to ensure that the terms of leases were being met appropriately and suitable exit plans were in place where leases were due to expire<br \/>\nestablishing an accurate record of assets (ownership of a number of properties, motor vehicles and a range of fixed assets ) owned by the charity, gaining control of the charity\u2019s property portfolio and cash reserves \u2013 the IM reduced the number of bank accounts in operation from approximately 40 to 8 and in September 2015 took control of just under \u00a312,000,000<br \/>\nintroduction and implementation of financial controls, systems and reporting procedures, regularising the management of income and expenditure<br \/>\nHealth and Safety audits and fire risk assessments were carried out; training provided to staff and implementation of suitable Health &amp; Safety policies and procedures<br \/>\nextensive liaison with HMRC resulting in settlement of the charity\u2019s tax liabilities<br \/>\nrecruitment of new board of trustees<br \/>\ninduction and training of new trustees<br \/>\n<strong>Restitution<\/strong><br \/>\nOn 18 November 2015, the IM considered professional advice and the particular circumstances of this case and decided that restitution (by way of civil claims against former trustees for breaches of duties and losses to the charity was not in the best interests of the charity.<br \/>\nFollowing the appointment of a new Board of Trustees on 12 April 2016, significant progress has been made to address the governance and improve oversight and control by the new trustees, as a result of which the IM was discharged on 12 April 2016.<br \/>\n<strong>Issues for the wider sector<\/strong><br \/>\nFinancial Controls &amp; Accounting Records<br \/>\nProper financial controls are a necessary feature of any well-run organisation. Because of the special characteristics of the charitable sector, they play an essential part in helping to show potential donors and beneficiaries that a charity\u2019s property is safeguarded, and that its management is efficient.<br \/>\nTrustees are equally responsible for the overall management and administration of the charity. Every charity\u2019s accounting records must be sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position. Trustees should ensure that financial controls are not only adequate but provide sufficient information to satisfy the trustees that the controls are being observed. If, due to the nature of the charity, its work, location and \/or set up the trustees delegate supervision of financial arrangements to one or a small number of trustees or employees, they need to ensure that there are arrangements in place for proper reporting back to the whole trustee body. In this way, system failures or issues can be identified at an early stage.<br \/>\nTherefore, in order to show that they are complying with their legal duties, trustees must keep records and an adequate audit trail to show that the Charity\u2019s money has been properly spent on furthering the Charity\u2019s purposes for the benefit of the public.<br \/>\n<strong>Conflicts of Interest Policy<\/strong><br \/>\nCharity trustees should ensure that they have a conflicts of interest policy in place to ensure that they are fully aware of their responsibilities and that any conflicts that do arise are appropriately managed.<br \/>\nWhere a charity trustee has a conflict of interest they should follow the basic checklist set out in the Commission publication\u00a0Conflicts of interest: a guide for charity trustees (CC29)\u00a0and where necessary or appropriate take professional advice.<br \/>\nThe law states that trustees cannot receive any benefit from their charity in return for any service they provide to it or enter into any self-dealing transactions unless they have the legal authority to do so. This may come from the charity\u2019s governing document or, if there is no such provision in the governing document, the Commission or the Courts. Further information is available from\u00a0Trustee expenses and payments (CC11).<br \/>\n<strong>Charity Property<\/strong><br \/>\nCharity trustees have a general duty to manage their charity\u2019s resources responsibly, reasonably and honestly. This means not exposing their charity\u2019s assets, beneficiaries or reputation to undue risk. It is about exercising sound judgement and then taking decisions that a reasonable body of trustees would do.<br \/>\nTrustees must put appropriate policies, procedures and safeguards in place and take all reasonable steps to ensure that these are followed.<br \/>\nIf a charity owns land or buildings, trustees need to know on a continuing basis what condition it is in, that it is being properly used, and that adequate insurance is in place. The essential trustee: what you need to know, what you need to do (CC3) makes clear that decisions about charity land and property are important. If the charity owns or rents land or buildings, the trustees need to:<br \/>\n&#8211; make sure the property is recorded as belonging to the charity<br \/>\n&#8211; know on what terms it is held<br \/>\n&#8211; ensure it is properly maintained and being correctly used<br \/>\n&#8211; make sure the charity has sufficient insurance<br \/>\nA charity\u2019s governing document or the general law can provide a \u2018power to insure\u2019. If the governing document imposes a positive duty to insure, if trustees then fail to insure property, this will be a breach of trust. More details are available in the Commission\u2019s guidance\u00a0Charities and insurance (CC49).<br \/>\n<strong>Trustee Decision Making<\/strong><br \/>\nCharity trustees are responsible for governing their charity and making decisions about how it should be run. Making decisions is one of the most important parts of the trustees\u2019 role. Trustees can be confident about decision making if they understand their role and responsibilities, know how to make decisions effectively, are ready to be accountable to people with an interest in their charity, and follow the 7 principles that the courts have developed for reviewing decisions made by trustees. Trustees must:<br \/>\n&#8211; act within their powers<br \/>\n&#8211; act in good faith and only in the interests of the charity<br \/>\n&#8211; make sure they are sufficiently informed<br \/>\n&#8211; take account of all relevant factors<br \/>\n&#8211; ignore any irrelevant factors<br \/>\n&#8211; manage conflicts of interest<br \/>\nmake decisions that are within the range of decisions that a reasonable trustee body could make<br \/>\nIt is important that charity trustees apply these 7 principles when making significant or strategic decisions, such as those affecting the charity\u2019s beneficiaries, assets or future direction.<br \/>\n<strong>Courtesy<\/strong>:<br \/>\nhttps:\/\/www.gov.uk\/government\/publications\/charity-inquiry-christ-embassy\/charity-inquiry-christ-embassy<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Charity Inquiry: Christ Embassy Published 14 November 2019 Contents The Charity Charity Structure Trustees Issues under Investigation Findings Conclusions Regulatory Action Taken Appointment of an interim manager Issues for the wider sector The Charity Christ Embassy (the charity) was registered on 19 November 1996. It is governed by a Declaration of Trust dated 23 October [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":23422,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5777],"tags":[601,602,84],"class_list":["post-23418","post","type-post","status-publish","format-standard","has-post-thumbnail","category-features","tag-charity-commission","tag-christ-embassy","tag-uk"],"_links":{"self":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/23418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23418"}],"version-history":[{"count":0,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/23418\/revisions"}],"wp:attachment":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}