Bankrupt Financially and Morally

Scotia Aid  Sierra Leone : SC024249

A Cult of Scorn and a totally inappropriate way of running a charity has driven Scotia Aid Sierra Leone into a £1.1 million bankruptcy. Uncontrolled trustee excesses, marginally acceptable activities and failure to deliver on the charitable purpose are in danger of bringing charities into disrepute.

Trusteeship Issues

  •  A recent investigation by the Scottish charity registrar OSCR in to Scotia Aid Sierra Leone found that payments had been made by the charity to companies connected to trustees that were “excessive and have not been sufficiently explained”.
  • The charity was reported to the  regulator in 2015 by whistleblowers  who complained of mismanagement and  huge trustee fees.
  • Using their own private companies three trustees paid themselves  £300,000 as tax efficient “consultancy fees”. The investigation led to directors Kieran Kelly and Alan Johnston being barred from running any charity for life . Houston  escaped action by quitting as a trustee before regulators acted so he is free to set up new charities.
  • Kelly  a convicted criminal exploited a gaping hole in charity legislation that allows anyone with convictions for crimes such as assault to be a trustee unless they have been convicted of dishonesty or fraud.

Financial Scams

  • The charity based much of its income on a ‘business rates’ reduction scam. Scotia Aid would take over empty commercial premises and go into an arrangement with the owners for a fee.
  • Claiming (falsely) to be storing donated furniture and other goods destined for Sierra Leone the trustees used their charitable status to cut the cost of business rates.
  • The plunder was spent on lavish salaries, high expenses and even sponsorship of Hamilton Academicals FC .
  • Only a maximum of 13p in the pound was spent on charitable activities.
  • A deal with an Italian charity FHM Italia Onlusm was not honoured leaving them in the lurch.

Kids Company – Cult of Powerful Personality

Collapsed charity Kids Company (KC) that received at least £46m of public money has just been the subject of a new musical at the Donmar Warehouse called ‘Committee’. That provides an excuse to reprise some of the issues found by the  National Audit Office  and Parliament’s Public Administration & Constitutional Affairs committee.

  •  Kids Company run by Camila Batmanghelidjh received numerous grants after claiming to senior politicians that it would close without them. Over several years KC received public funding of £42m in government grants,  £2m from councils and £2m from the National Lottery. At one stage the Inland Revenue also wrote off the charity’s tax debts of £590,000 .
  • Former bosses at the charity  denied it was financially mismanaged but in August 2015 it was put into compulsory winding up after problems paying wages and salaries.
  • Amongst the  issues were money handed out to Kids for drugs, large expenses for the families of two staff, a £90,000 salary for Camila  and government ministers over-ruling official warnings from a civil servant.
  • Kids Company  were allowed to rely on their own performance reviews.

Beatbullying – Cult of Overconfidence

In a public company or business it would be called ‘over-trading’. There is a reason why an organisation should stick to its core purpose. If they don’t stick to their knitting it can all unravel. Initial success for Beatbullying was attributable to its founder and chief executive, Emma-Jane Cross but from 2011 job losses and inability to manage their finances brought the charity down.

  • For several years Beatbullying did what it said on the tin and focused on helping youngsters with bullying prevention strategies. Then it formed the BB Group.
  • Under this expansive phase they started a service called Cancer Care Online, established an employment project ‘Future You’ and developed a befriending scheme MiniMentors and CyberMentors.
  • Overseas expansion of Beatbullying followed and by using money from Civil Society’s Social Action Fund created MindFull, a new online mental health service to add to the rapid but sadly unsustainable growth.

Concerns

  • Charities are no different from other organisations ranging at times from the good and indifferent to the bad.
  • Commissioners, Registrars and other authorities need to be able to resolve issues promptly and effectively.
  • In a challenging environment charities need help from all concerned to root out poor and damaging activities.

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