The Charity Commission has confirmed that it has issued its first ever official warning to a local authority, after the council in question failed to properly manage the charities it is a trustee of.
Currently there are more than 1200 councils across the country that are charity trustees, and this instance is the first time that the government’s charity regulator has issued a local authority with an official warning, after it failed to properly comply with its duties.
Calderdale Metropolitan Borough Council currently oversees a number of assets that are of community importance, such as the Public Central Library and the Tetley Memorial Park, however the council has been issued with a warning as it has failed to file annual returns and accounts for all of the 13 charities that it is responsible for. According to the Charity Commission these accounts have been overdue for several years, and this has led to the council failing to comply with an action plan that it was issued last year.
The Charity Commission’s Assistant Director of Regulatory Services, Tracy Howarth, commented on the warning, saying:
“All trustees have a responsibility to their charities and beneficiaries to ensure that their charities are well managed. This is a duty that is really important when vital community assets are in their care.
“In failing to file accounts or take action, even after we provided advice and gave support to comply with our instructions, Calderdale Council fell below the standard we, and the public, expect of trustees. In light of this we have now issued it with an Official Warning, which is the first time we’ve used this power with any council.
“All local authorities who serve as trustees should take note of our advice to ensure they understand what it means to be a trustee.”
In order to rectify the issues set out in the official warning, the Commission has outlined the following measures that the council must take:
- File all outstanding accounts
- Ensure all 13 charities are compliant with accounting responsibility moving forward
- Provide up-to-date contacts for all charities
- Locate and identify the charities on a local register, with their assets detailed
- Hold regular trustee meetings, ensuring all councillors are aware of their duties
- Review the financial controls of all the charities, whilst recording, implementing and evidencing practices
David Holdsworth, Chief Executive of the Charity Commission, wrote to all local authorities in the country to warn them of the potential action that could be taken, should they fail to comply with their trustee duties, whilst also reviewing new guidance for councils and councillors.
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