Statutory inquiry report: The Ulster Society for the Prevention of Cruelty to Animals (USPCA)

Transcription

1 Statutory inquiry report: The Ulster Society for the Prevention of Cruelty to Animals (USPCA) 31 March 2015

2 Report on the results of a statutory inquiry, instituted by the Charity Commission for Northern Ireland under section 22 of the Charities Act (Northern Ireland) 2008, into the Ulster Society for the Prevention of Cruelty to Animals (USPCA). Contents Section 1: Introduction 3 The inquiry report The charity Section 2: Executive summary 4 Section 3: Conclusion 6 Action required by trustees Issues for other charities 2

3 Section 1: Introduction The inquiry report 1.1 The Charity Commission for Northern Ireland the Commission categorises its investigations as self-regulatory, regulatory and statutory depending on the risk posed to the charity beneficiaries, the charity and the sector. These terms are indicative of potential outcomes whereby a charity may be encouraged to self-regulate, may be issued regulatory guidance or where, due to the severity of risk assessed, it is envisaged that there may be a requirement for the use of statutory powers assigned to the Commission by virtue of the Charities Act (Northern Ireland) 2008 the Act. More information can be found on our website: The Commission has given consideration to section 22(6) of the Act, and has determined that it is necessary to publish this report in keeping with our commitment to openness and transparency. 1.3 Through publishing this inquiry report, the Commission considers that we may encourage and facilitate the better administration of charities. 1.4 Following engagement with charity representatives, the Commission opened a statutory inquiry into the Ulster Society for the Prevention of Cruelty to Animals (USPCA) under section 22 of the Act on 23 December The Commission s inquiry was focused on addressing concerns with the administration and governance of the charity. 1.5 This report presents an overview of the investigation and its findings. In providing an overview, the report aims to address a series of concerns submitted to the Commission and the additional issues identified during the conducting of the inquiry. The charity 1.6 Founded in 1836, the USPCA is the second eldest animal welfare charity in the world and is a company limited by guarantee. The charity is operated under a Memorandum and Articles of Association with its key objective detailed as being the advancement of animal welfare. 1.7 The charity s website, contains information on the USPCA s objectives and activities, governance structures, directors reports and financial statements, along with their vision for the future of the charity. 3

4 Section 2: Executive summary 2.1 On 30 July 2013 the Commission received the first of a number of concerns asserting that the USPCA had no, or inadequate, procedures in place in order to tend to its key objective. Specific reference was made to the historic intervention on private and commercial premises by the USPCA in concert with other agencies. 2.2 In corresponding with the charity to establish the veracity of these concerns, the Commission received documentation in respect of the policies and procedures adopted by the charity. The Commission was concerned that these policies and procedures were not adequate and presented a risk to the effective operation of the charity. The Commission was also concerned at the perceived lack of co-operation by the charity. 2.3 The Commission had previously received and responded to other concerns in respect of this charity which had been concluded following self-regulatory advice. Consequently, on consideration of the current position and previous concerns raised, a statutory inquiry was instituted on 23 December This allowed the Commission to exercise its power under section 22(3) of the Act to direct the USPCA to provide information and copies of specific documents. 2.4 The Commission notes that a number of concerns were raised in respect of inappropriate related party transactions and other issues. However, the Commission s investigation did not substantiate those allegations. 2.5 On 27 May 2014 the USPCA lodged an application with the Charity Tribunal for a review of the Commission s decision to institute a statutory inquiry. The Commission continued to work with the charity to improve its governance and consequently the USPCA withdrew its application to the Tribunal on 10 September The response received from the trustees of the USPCA to the Commission s direction revealed that there were a number of governance areas where the charity lacked adequate controls which required significant and prompt remedial action by trustees. 2.7 Once highlighted, the trustees resolved to address each of the issues raised and to bring the charity towards good governance. To achieve this end, the trustees proceeded to appoint an independent consultant to conduct a full review of the USPCA s corporate governance and policies. 4

5 2.8 By 27 August 2014, the independent consultant had produced a number of policy documents for the USPCA, including a: Risk Register & Risk Management Policy Governance Handbook Finance procedure. These policies were presented to the Commission for comment and were subsequently formally adopted by the charity. A review schedule for all other policies was also put in place at this time. At this point, the Commission noted a positive change in the level of co-operation of the charity. 2.9 The charity had also engaged with the Commission to seek authorisation under section 96 of the Act to amend its governing document. Included amongst the requested changes was the provision that, where a conflict of interest presents itself, the conflicted trustee shall absent themselves from the decision making and not be counted as part of the required quorum [although the non-conflicted trustees can remove this impediment if they feel it is in the best interests of the charity to allow the conflicted trustee to continue to act] The Commission authorised the changes which were subsequently endorsed by the charity membership at an EGM on 8 October The USPCA conducted its AGM on 3 December 2014 at which the outgoing chair, Mr Ted South, welcomed the intervention of the Commission Amongst the other changes implemented by the charity was to endeavour to increase the number of trustees on the board. This serves to enhance the charity s board with clear, fair, diverse and accountable decision making processes, which contain a broader mix of skills, knowledge and experience, and offers greater flexibility to overcome challenges On review of the actions taken by the charity, the Commission is content that the risk posed to the effective governance of the charity has been significantly reduced. Consequently the statutory inquiry has been closed. A regulatory enquiry remains open whilst the Commission assesses the effectiveness of the full implementation of the remaining policy and procedural enhancements. 5

6 Section 3: Conclusion 3.1 The Commission considered that the USPCA having no, or obsolete, policies and procedures across a range of functional areas exposed the charity to a serious and unnecessary risk. 3.2 However, following the opening of the statutory inquiry, and on confirmation of the improvements required as identified by the USPCAappointed independent governance expert, the trustees co-operation with the Commission improved significantly. 3.3 The Commission acknowledges that the trustees have taken steps to implement extensive changes to the governance of the charity. This positive response negated the need for the Commission to use its powers to act for the protection of the charity. 3.4 In addition, it is noted that on 6 February 2015 the charity conveyed to the Commission that they have commenced their application to register with the Commission. The registration process will include a review of the governing documents of the charity, as it does with all charities registering with the Commission, and offer good governance recommendations where appropriate. 3.5 On this basis, and as a measure of the Commission s confidence that the USPCA will continue to manage its affairs in accordance with its policies and constitution, the decision was taken to conclude our statutory inquiry. 3.6 This report has been shared with USPCA. The charity contends that it has always co-operated with the Commission and is pleased to report that it has developed robust procedures to address all concerns brought to its attention. Actions required by trustees 3.7 Whilst implementing extensive changes to governance is a positive step for the USPCA, until the Commission is satisfied of the full effectiveness of those new policies there remains an element of risk to the charity. As such, the Commission will monitor the charity and offer further guidance to trustees where necessary. 6

7 Issues for other charities 3.8 The Commission has published guidance entitled Running your charity which provides support for trustees on key aspects of running a charity effectively. It is available at : 3.9 Section 88 of the Act details the conditions under which a trustee may be remunerated for services provided to or on behalf of a charity. Section 4.9 of the guidance entitled Running your charity, as detailed above, explains how the trustees may deal with incidental benefit In corresponding with a charity where an issue of concern has been brought to our attention, we will advise trustees that we are keen to work with them to find a suitable and workable remedy. This remains the case even in an environment where a statutory inquiry has been opened In this instance, the trustees worked closely with the Commission in sometimes testing circumstances and ultimately were able to navigate their own path towards good governance Key to the success of any charity is good governance, which includes ensuring the charity is well managed, keeps up to date with the Commission's guidance and complies with the requirements of the charity s governing documents and the law Additionally, charities should regularly review their policies and procedures to ensure they are effective, complete and compliant with relevant legislation This report concludes the Commission s statutory inquiry into the USPCA. 7

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