Investigation finds unauthorised payments at cancer charity
An investigation by the Charity Commission into Kids Integrated Cancer Treatment Ltd (KICT) has found the charity had ‘serious deficiencies’, including inadequate financial controls and unauthorised trustee remuneration payments
17 Mar 2017
The charity’s objects included providing financial support for families of children with cancer and providing medical treatment and other support for children diagnosed with cancer.
KICT was set up in 2009 and reported income for the financial year ending 31 January 2013 of £90,336 and expenditure of £84,745. The charity ceased operational activity in 2014 and was removed the charity from the register of charities by the regulator in 2015.
The Commission’s engagement with the charity began after concerns were raised its links to a businessman named Kevin Wright, who was the husband of one of the founding trustees. Wright was convicted of theft and fraud by false representation in 2013, in connection with fundraising appeals for children with cancer (not linked to KICT).
When this trustee resigned, the replacement trustee had previously worked as a fundraiser and administrator for Wright.
The investigation found that Wright was sole director of two companies that the charity entered into consecutive agreements with, one of which was concerned with a publishing and advertising business and the second with the supply of nutritional supplements.
The trustees told the Commission that the charity gained £61,000 from these agreements; however, the Commission’s scrutiny of the charity’s bank records suggests the charity had, in fact, made a net loss from its association with the companies.
The inquiry also found a series of unauthorised payments and benefits to three of the charity’s four trustees; one of the trustees received over £17,000 in the space of four years, and attended 11 training events in the USA, part-funded by the charity on courses about nutrition and wellness.
In addition, one trustee was paid £150 per month to store files for the charity, while a second trustee received £30 per month towards their phone bill.
These payments were contrary to the charity’s governing document. The Commission also found that conflicts of interest were not managed in making decisions about payments and that there were poor financial controls in place. For example, the trustees could not produce any documentary evidence to confirm that funds withdrawn as cash from the charity’s bank account were properly applied in furtherance of the charity’s purposes.
The report states that there was some evidence the charity provided some activities to help its beneficiaries before it closed but it was ‘not possible for the inquiry to conclude that the charity was operating for the public benefit.’
The regulator is now considering what further regulatory action it may take.
Michelle Russell, director of investigations, enforcement and monitoring at the Charity Commission, said: ‘While we found some evidence of charitable activity, there were numerous personal and business associations between the charity and the convicted individual, which led to significant financial personal benefits for him and his companies, and significant private financial benefit to three of the four trustees.
‘Those involved also allowed serious deficiencies to take place and mismanagement of and misconduct in charity. The trustees failed to comply with their duties and responsibilities and let down not just themselves, but also the people the charity was set up to help.’
Kids Integrated Cancer Treatment: Inquiry report is here.