The Charity Commission has found misconduct and or mismanagement at Devon Freewheelers after unauthorised trustee payments were found.

The charity, which provides free courier and transport services to NHS establishments, medical surgeries, air ambulance and the community across the Southwest of England, was placed into the double defaulter class inquiry (DDCI) as it failed to submit its annual report, accounts and returns for 2020 and 2021.

Accounting information for the FYE 31 October 2020 was submitted on 28 February 2023, 546 days late. Accounting information for FYE 31 December 2021 was received on 15 March 2023, 196 days late.

Prior to its inclusion in the DDCI, the Commission’s compliance team engaged with the charity regarding the charity’s financial management and late submission of accounting information.

Following the submission of the overdue accounting information a detailed review of the accounts and the bank statements of the charity’s bank account was undertaken, and found discrepancies between the transactions going through the bank account and the income and expenditure declared in the accounts.

Covid services

From March 2020 to July 2020, during the height of the Covid 19 pandemic, the charity provided paid ‘Covid 19 Response Services’ under an agreement for Royal Devon and Exeter NHS Foundation Trust. This included the provision and running of various Covid 19 testing facilities and PPE changing facilities for doctors and nurses.

The inquiry found that the delivery of Covid 19 response services, even though the charity benefitted, fell within objects of the charity that had been widened without the Commission’s prior consent. The decisions made by the previous trustees to enter the SLA and amend its charitable objects without the consent of the Commission, was misconduct and/or mismanagement in the administration of the charity by the previous trustees.

It also found that the delivery of paid services under the SLA conflicted with the charity’s ethos of delivering its usual blood bike operations free of charge which created confusion to the public over the charity’s operation and ultimately damaged the charity’s reputation.

Trustee payments

The inquiry further found that a was later employed by the charity (and is its current CEO) and has received a modest monthly payment for services to the charity.

The inquiry found that none of the special conditions to allow payments were met and therefore they were unauthorised trustee renumeration. Following the issuing of the Action Plan, the trustee concerned stepped down as a trustee and the charity is in the process of regularising the situation.

It has sought permission from the Commission to continue to employ the trustee as its CEO following their resignation as a trustee. The request is currently being examined by the Commission.

The inquiry also found evidence of payments made to a current trustee, for servicing the charity’s vehicles. The inquiry carried out a books and records inspection and found that the payments made were well documented and that all supporting documentation was being kept as required. But they were s a breach of the Act and the charity’s governing document as there was no written contract in place specifying a maximum amount that could be paid to the trustee in question.

Following the issuing of the Action Plan, the charity entered into a contract with the current trustee for the provision of goods and services allowing payment of up to £5,000 per year.

Conclusions

The commission concluded that there was misconduct and/or mismanagement in the administration of the charity.

However, the current trustees cooperated fully with the inquiry to resolve identified regulatory issues and extensive guidance was provided to help them manage their charity in line with best practice and legal requirements going forward.

Amy Spiller, Head of Investigations at the Charity Commission, said: “This case demonstrates how important it is for all trustees to know and follow their governing documents, and to operate within their charitable purposes. This is crucial to any well managed charity.

“The current trustees have cooperated fully with our investigation to help improve how the charity is run and are using our advice and guidance to ensure best practice moving forward. We are therefore confident there is no further role for us at this time and can conclude our inquiry.

“My advice to all trustees is ensure that you know and understand the full range of your duties and responsibilities. We have guidance to help you on many issues, including filing your accounts on time, recording and managing conflicts of interest and documenting decision-making so that, if required, you can evidence that you are working in the best interests of your charity.”

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