A Luton-based Islamic schools trust that had been criticised by Ofsted for segregating male and female staff was mismanaged and poorly administrated by its trustees, a Charity Commission statutory inquiry has concluded.

The Rabia Education Trust, which runs the Rabia Girls and Boys School in Luton, was found by the commission to have inadequate financial controls, although the regulator’s report says the charity has made progress towards addressing the concerns.

According to the commission’s report, the regulator was in contact with the charity’s trustees from 2012 after their repeated late submissions of accounts and annual reports. An action plan was submitted to the charity’s trustees in 2015 addressing concerns with internal governance, decision-making processes, financial record-keeping and compliance with other regulators.

After the charity failed to respond on time or address all the points raised in the action plan, the commission launched a statutory inquiry in 2016.

The report of the inquiry, published today, says that the commission was also aware of findings from an Ofsted inspection of the school and a letter from Ofsted to Nicky Morgan, education secretary at the time, about the school, which the regulator said raised further concerns about the management by the trustees.

The Ofsted allegations related specifically to the segregation of male and female staff during a meeting, but according to the report trustees said the segregated meeting was a one-off because it took place in a prayer room.

The report says trustees have promised not to hold future meetings in such a setting.

A speaker policy has also been introduced because of concerns expressed by Ofsted about the school’s vetting of guest speakers: the commission report says this should be strengthened.

The commission found that trustees were unable to show accounting records to explain all of the charity’s financial transactions. The report says that about 40 per cent of the charity’s income was not being banked and some staff were paid in cash, issues which have now been addressed by the charity.

The report adds that the charity failed to get Charity Commission consent before renting out part of its office space to a nursery and did not register a 99-year lease with the Land Registry, despite being required to do so.

The lease was also drawn up without legal or professional advice, the report says.

But it adds that the charity showed a willingness to comply with the commission’s action plan, and also addressed issues such as overdue accounts and to improve internal governance.

A statement from the Rabia Education Trust said that the trustees “have fully cooperated with the Charity Commission and will ensure that all recommendations are fully implemented”.