• Focussed statutory investigation into the governance and financial affairs of the charity by the Charities Regulator in line with its specific functions
• Findings point to failures in board oversight in the management and administration of the charity and its charitable assets.

The Charities Regulator has published an inspectors’ report into the affairs of Peter McVerry Trust Company Limited by Guarantee (Registered Charity Number 20015282) (the charity). It follows a focussed statutory investigation into governance and finance-related matters instigated by the Regulator in line with its specific functions. The report details a number of findings which point to failures in board oversight in the management and administration of the charity and its charitable assets.

In their report, the inspectors highlight instances of a lack of adequate and appropriate financial controls with which the charity’s board (also known as charity trustees) could exercise control over the affairs of the charity. The inspectors also identify a failure to adhere to donor intention in how restricted funds were used. Further findings relate to the process by which the charity took over other charities and whether the board considered whether the charitable purpose of charities being taken over aligned with the charity’s own charitable purpose. The inspectors cite one case where the charitable purpose of the charity being taken over was the advancement of religion, which is not one of Peter McVerry Trust’s charitable purposes. 

Commenting on the findings, Charities Regulator Chief Executive Madeleine Delaney said “The inspectors’ report underlines the importance of a charity’s board of trustees exercising proper control over the operations of a charity. Charity trustees are ultimately responsible for the control and management of a charity. Where the charity has employees, as in this case, the charity trustees must set the parameters within which the employees must operate. 

Charity trustees must also make sure systems and processes are in place to ensure they get the information they need to oversee all the charity’s activities. This allows them to make fully informed decisions about the charity’s governance, finances and other significant matters. The report highlights the detrimental impact on a charity when this does not happen, which can have implications for public trust and confidence in the wider charity sector.

Charity trustees have a duty to make sure that donations, funds or grants given for a specific charitable purpose are used for that purpose alone, and are used appropriately and responsibly.”

Other factual findings in the report include:

• Inappropriate transfers between, and comingling of, restricted and unrestricted funds
• Material inaccuracies in the recording of the assets of the charity and inadequate management accounts which did not report the level of debtors, creditors or debt financing
• Competitive tendering procedures for services and contracts to ensure value for money were not implemented or adhered to
• No evidence of active management of conflicts of interest

The Charities Regulator appointed inspectors on 12 October 2023 to carry out an investigation into the charity’s affairs following a number of communications between the Charities Regulator and the charity during 2023 regarding its financial status and solvency.

Prior to and during the investigation the Charities Regulator liaised closely with the Approved Housing Bodies Regulatory Authority (AHBRA) which is also carrying out an investigation into the affairs of the charity related to its activities as an approved housing body. These form part of a range of activities and services that the charity carries out to advance its stated charitable purposes. The regulators have a Memorandum of Understanding in place which allows them to cooperate and share information for the purpose of performing their respective functions efficiently and effectively

The board of Peter McVerry Trust and other relevant parties were provided with a copy of the inspectors’ report. “The Charities Regulator will follow-up with the board for assurances that the matters raised by the inspectors are properly addressed,” Ms Delaney said.

She added “I would also encourage all charity trustees and those involved in running charities to explore the range of guidance on our website, which includes guidance on the role and responsibilities of charity trustees. This guidance helps charity trustees understand their obligations and the oversight mechanisms they need to put in place.”

The inspectors’ report is available on the Charities Regulator’s website.