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Charity Commission recommendations to Turks Head Company disclosed

Charity Commission recommendations to Turks Head Company disclosed

Recommendations from the Charity Commission into the Turks Head Company were not publicly available when their investigation concluded in November 2010.

Following reader comments on our January update we asked the Commission to reconsider their decision on the grounds that disclosure was in the public interest.

More details below as we’ve now received the Charity Commission recommendations and an update from the Turks Head trustees.

Turks Head Company

The Turks Head Company was incorporated and registered as a charity in 1992 with the aim of supporting community activities in Wapping.

In 2007 the Turks Head made a £131k loan to the Tower Hamlets Environment Trust (“THET”) and in December 2008 THET went into administration, defaulting on the loan and interest payments.

Notes to the annual report and accounts for the Turks Head Company show that the loan plus £16k of accumulated interest was written off as a £147k bad debt [see published accounts PDF 127KB].

Note to Turks Head Accounts on Loan 31 Dec 2009

Response from Trustees of the Turks Head Comany

The trustees met in January 2011 to consider the Charity Commission recommendations and have provided this response to us.

The trustees have noted all the recommendations of the Charity Commission investigation, and have taken steps to implement them, where necessary.

We were pleased to note that the investigation found that all trustees had acted with the best of intentions and without impropriety of any kind.

We will be concentrating on our programme of promoting community harmony, well being and environmental improvement in the area. Our soon to be launched website will give full details.

Charity Commission findings and recommendations

The Charity Commission confirmed that their investigation completed in November 2011 and the case was closed. The Turks Head Company remains a registered charity.

We received a 5 page response from the Commission [PDF 960KB] detailing the regulatory guidance and advice provided to the Turks Head trustees covering governance, management, administration, legal and charitable responsibilities.

The Commission lists 7 specific areas for review and refers to detailed Charity publications on specific matters. Our summary and interpretation of the key points follows, but we suggest reading the response in full for yourself [PDF 960KB].

1. Charity objectives

The activities and priorities of the Turks Head have changed since it was established in 1992 and updated objects should be agreed with the Commission.

Minutes of a trustee meeting indicate the change in activities was identified in February 2010, but formally changing the charity objectives was not pursued at the time due to cost.

2. Charitable expenditure

The Turks Head accounts show accumulated reserves of £0.53m at 31 December 2009. £375k relates to property revaluation, leaving liquid capital reserves (presumably available for charitable expenditure) of £156k. Accounts showing income and expenditure for the year to 31 December 2010 are not yet available so the surplus could now be lower or higher.

The Commission stated that surplus income reserves should only be held if it is in the best interests of a Charity and has asked the trustees to focus their attention on increasing levels of charitable expenditure.

3. Investment of surplus funds

The Commission reminded trustees of their responsibility to follow specific investment criteria on suitability and diversification when investing any surplus funds. Trustees must exercise a duty of care and ensure investment decsisions are informed, supported by facts and all decisions and transactions fully documented.

4. Trustee meetings and Annual General Meetings

Trustees have been reminded to hold regular meetings and document appropriately with minutes.

5. Happiness at Work Ltd

The Commission recommends the trustees seek professional advice about a potential conflict of interest arising from one of the trustees interest in Happiness at Work Ltd.

Trustees have been asked to consider the appropriateness of the Turks Head acquiring Happiness at Work as a wholly owned trading subsidiary and its intention to covenant profits to the Turks Head.

6. Accounting and financial issues

Registered charities are required by law to keep proper accounting records and keep detailed records for all receipts and payments.

The Turks Head like many charities have opted out of a full audit, presumably on the grounds of cost but are still required to ensure their accounts are independently examined.

The Commission mention they saw only limited parts of the Turks Head books and records during their visit and recommend the trustees consult with their accountants to ensure compliance with legal and regulatory requirements.

7. Financial reports

The Commission highlights the requirement for trustees to have access to accurate and up to date financial information to allow them to make proper decisions for the Charity.

Financial information including accounts, cash flows, budgets, forecasts and variances should be sent to trustees prior to their meetings which should then be reviewed in detail.

Turks Head Company and Wapping in 2011

Our recommendation to the trustees is to improve visibility of the Turks Head activities within the Wapping community. People here in E1W want to hear about local charities, what they’re doing and how they can be involved.

We’re pleased to note from the trustees that the recommendations have all been appropriately implemented and are looking forward to the Turks Head website and details of their 2011 programme for improvement in the community.

We’ll keep you updated when the Turks Head website is launched and let you have details of 2011 Spring events.

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  • Pete_HJ

    Have the Turk’s Head ever explained what happened with this and why a charity who should be spending money on Wapping was actually lending it to another organisation? 

  • John

    Oh so writing off £70,000 willy nilly justifies you wasting £147,000 that didn’t belong to you. And you’re still involved with these groups. The first priority should be to get you removed from any access to these finances.

  • DebbieBerg

    It was very generous of the Environment Trust to write off 70,000 quid, to anyone. Not convinced this relevant to the Turk’s Head later loss to ET of £100,000 plus (of course you didn’t intend this as some kind of justification/excuse). Perhaps the THC could show some more generosity, out of their current surplus, towards local Wapping-based intiative Stop the Rot, unless this has been excluded under the unrecorded changes in THC objectives? What do others think? Does it matter what we think? How can local people get elected as Trustees and thus influence “improving Wapping”?

  • Jon Aldenton

    Perhaps readers also need to note that when the campaign to get the Turk’s Head acquired and renovated was supported by The Environment Trust , they lent, and then wrote off £70,000 in 1992.

    I personally organised and supervised the work and remain committed to seeing the Turk’s Head continue to play a vital role in improving Wapping.

  • ShredniVashtar

    As others have said, I hope THC’s future plans for the area will be informed by local residents’ wants, not the preoccupations of distant ‘community entrepreneurs’

  • Debbieberg

    It’s all a bit sad really, considering the good intentions of the founder members, that the charity has taken such bad decisions and operated in such an amateurish way (missing minutes, obvious conflicts of interest – I mean, really). What a waste of over £100,000 raised for the local community. I’m with Addy about actually asking people who live here what to do with the current surplus.

  • Addy

    Sounds like a lot of “recommendations”, but moving forward I hope they consult with the people of Wapping about what to spend their surplus cash on.