The Charity Commission has concluded that there was serious misconduct and/or mismanagement in the administration of SPAC Nation (Salvation Proclaimers Ministries Limited).

The report found that the charity’s trustees are responsible for serious misconduct and/or mismanagement over safeguarding practices and financial failures over a substantial period of time.

It also found that the trustees failed to act with reasonable care and skill, including while the inquiry was open. The trustees also repeatedly failed to address the Commission’s regulatory concerns.

The Commission has used its powers to disqualify three current trustees from being a charity trustee for a period of 12 years each and a former trustee for 10 years.

Inquiry opened

In December 2019, the Commission opened an inquiry into the charity after it identified serious financial, governance and safeguarding concerns. These included that the majority of the charity’s income and spending was not going through a bank account.

The inquiry’s findings revealed that the charity’s safeguarding practices were inadequate. Houses associated with the charity and intended to support the local community were set up. The houses were also the homes of church leaders, and the inquiry subsequently found the nature of the relationship between the charity and the houses was unclear.

Safeguarding risks were mitigated during the inquiry as the charity stopped holding services and other events in person due to the Covid-19 pandemic in 2020 and it also subsequently ceased to operate.

It found that failings in the trustees’ oversight of safeguarding amounted to misconduct and/or mismanagement in the administration of the charity.

The regulator’s inquiry also found that the charity’s financial record keeping was inadequate, including for payments that could have posed a reputational risk to the charity.

The inquiry was highly critical of the charity’s use of cash. Donations and expenditure were not properly recorded and there was also found to be a lack of segregation of duties between the pastors and the trustees. As the assets of the charity were not held centrally, the trustees did not have oversight and control of the charity’s assets, and these were exposed to the risk of misapplication and / or misappropriation.

Consequences

The Commission issued an Order in December 2019, directing the charity to bank all of its cash, however the trustees informed the regulator that they had decided to stop collecting donations. The trustees never reversed this decision. The inquiry’s view was that the trustees failed to provide convincing reasons as to why this was in the best interests of the charity.

The inquiry found that the trustees’ operation of the charity put funds at risk resulting in a finding of misconduct and/or mismanagement.

In January 2022, the Insolvency Service applied for a petition for a public interest winding up order against the charity. The petition included that the charity failed to cooperate with the Insolvency Service’s investigation; discrepancies in the information provided to the Insolvency Service and the Commission compared to that provided to its accountant; and that it operated without transparency and filed “suspicious and incorrect” accounts at Companies House and with the Commission. The High Court accepted the petition and a winding up order was issued on 15 June 2022.

Amy Spiller, Head of Investigations at the Charity Commission, said: "The community placed its trust in this charity and its leaders and was sadly let down by repeated serious failings in its financial and safeguarding practices. Safeguarding should be a priority for all charities, and the trustees should have considered doing more to strengthen its safeguarding practices. Operating in cash also exposed the charity to risks such as loss, theft and the cash being used outside of the charity’s purposes.

"Our intervention prevents three current trustees and one former trustee from holding trustee or senior roles in other charities and so helps to protect the wider sector."

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