Regulator launches statutory inquiry into regeneration charity where £90k went missing

NSA Afan, based in Port Talbot, south Wales, reported the theft to the Charity Commission in May last year

The Charity Commission has launched a statutory inquiry into a Welsh community regeneration charity after £90,000 of the charity’s funds went missing following a theft.

NSA Afan, based in Port Talbot, south Wales, contacted the regulator in May 2016 to report a theft at the charity, “with £90,000 of the charity’s funds unaccounted for”, according to the commission.

The charity, which provides community learning and employability schemes in Neath and Port Talbot, had an income of £1.5m and spending of £1.6m in the year to 31 March 2016.

After the serious incident report was submitted, the commission opened a monitoring case to oversee the charity’s response.

In a statement published today, the commission said the monitoring case had prompted “serious concerns about the charity’s governance and internal controls and the apparent failure of the trustees to remedy these issues, placing the charity’s property and its operations at risk”.

Because of these concerns, the commission opened a statutory inquiry in February this year.

The inquiry will examine the charity’s financial controls, its management and application of charitable funds and assets, its governance and whether the charity’s decision-making processes are adequate, especially for handling conflicts of interest.

It will also examine whether the trustees have acted prudently and exercised reasonable care in respect of the day-to-day running of the charity, according to the commission.

In January, the Welsh government suspended funding to the charity amid allegations of the misuse of public funds. 

NSA Afan was due to receive £526,800 in grant funding to deliver the Welsh government’s Communities First programme in Sandfields and Aberavon up to 31 March, but was told on 12 December the funding had been suspended with effect from 1 December, leaving the charity concerned about its future viability.

Ian Isaac, chief executive of NSA Afan, told Third Sector that 12 members of its staff had now been transferred to the local authority because the charity was unable to continue running some of its services without the funding. He said it had been able to continue providing other services out of its own income.

Today the commission said it had been liaising closely with the Welsh government, which it said also had concerns about the governance of the charity.

Isaac described the commission’s concerns about the charity’s governance as “sweeping allegations without evidence”, but said the charity was cooperating fully with the inquiry.

In January, South Wales Police said a 35-year-old woman from the Port Talbot area was arrested on suspicion of theft on 11 August 2016 after a complaint was made by NSA Afan, and had been bailed while the police investigation continued.

Today a police spokesman said: “South Wales Police is continuing to investigate and it would be inappropriate to comment any further at this stage.”

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Charities could be missing out on £100m in legacy gifts, says report

An online survey of charity legacy officers and probate practitioners finds that some people are persuaded to leave gifts to charities in ways that aren’t legally binding

The charity sector could be missing out on as much as £100m a year because people are leaving legacy gifts in a non-legally binding form, a survey of legacy officers and lawyers has found.

The online survey of 130 charity legacy officers and 76 probate practitioners, carried out in March and April by the law firm Penningtons Manches, found that only 37 per cent of probate practitioners actively prompted clients to consider leaving gifts to charity in their wills, and 27 per cent “actively disliked” dealing with estates that included legacy donations.

The report based on the survey responses, Bridging the Gap? Improving Collaboration Between Probate Practitioners and Charities, says that 20 per cent of probate practitioners said they encouraged their clients to leave charitable gifts out of their wills and instead include them in separate letters of wishes to friends or family, which are not legally binding.

“On the face of it, this may feel like a relatively small percentage, but when this is extrapolated against the legacy income of the whole charity sector this could amount to as much £100m per year,” the report says.

“This is a very significant issue for the charity sector and needs to be addressed.”

One solution the report puts forward is better communication and understanding between probate lawyers and legacy officers – who, according to the survey, had radically different views of each other’s work.

The survey found that 82 per cent of legacy officers believed they provided a caring, compassionate and personalised approach to their work, but only 54 per cent of probate practitioners agreed and 26 per cent strongly disagreed. More than a third (34 per cent) of legacy officers were concerned that probate practitioners did not fully understand the tax exemptions associated with legacy giving.

More than a third (34 per cent) of legacy officers said they were dissatisfied with the frequency of updates provided by probate practitioners on the progress of legacy cases and, where updates were provided, a quarter were dissatisfied with the level of detail provided and the overall time taken to complete the administration of estates.

Among probate practitioners, on the other hand, less than half (46 per cent) of respondents were satisfied with the frequency at which charities checked in with them about progress and only 47 per cent were satisfied with the level of detail requested.

Alison Talbot, head of charities at Penningtons Manches, said the firm had “picked up on some tensions between legacy officers and probate practitioners” in its day-to-day work but had been “surprised by the strength of discontent” expressed in the survey.

“Even if the charity sector finds the views of the probate practitioners frustrating, it has to take notice of the concerns because these individuals are often the gatekeepers to future charity legacies,” she said.

Legacy officers also had concerns over their own organisation’s senior management understanding of legacies, with only 52 per cent of respondents agreeing that their senior managers grasped the issues and 39 per cent agreeing that trustees did.

Chris Millward, chief executive of the Institute of Legacy Management, said the issues the report highlighted were “sadly very familiar” to the ILM and its members.

He said he hoped the research would “act as a springboard for better understanding, improved communication and increased collaboration between charity legacy professionals and solicitors”.

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