The Charity Commission has issued Penny Appeal with an official warning for breach of duty, misconduct and mismanagement.
In a ruling in late September, the Commission said Penny Appeal had failed to review a contract with its major supplier and thereby failed to act in the best interests of the charity.
It added that Penny Appeal had failed to manage a perceived conflict of interest regarding its relationship with its major supplier.
The Commission is now demanding that the Wakefield-based charity implements an action plan to rectify its mistakes or risk further regulatory action.
Responding to the Charity Commission decision, Penny Appeal said it accepts the findings.
“We can confirm that the current board of Trustees have already ensured that the three findings have already been substantially addressed and corrective actions put in place to ensure Penny Appeal operates to the highest standards of corporate governance.
“The Board of Trustees regret that these issues ever arose in the past but are committed to building a stronger organisation which provides the highest levels of accountability and transparency.
“In relation to the specific findings the following steps have been taken:
- Penny Appeal own two properties and these will be retained as long-term assets which will assist the charity to fulfil its charitable objectives. Both properties generate a positive recurrent income for the charity and the Penny Appeal head office is located in one of the properties.
- Comprehensive and robust procurement, tendering and contracting policies and procedures have been put in place by the Board of Trustees. These are overseen by the board appointed audit, finance and risk committee who also engage an independent internal audit team. All contracts go through a rigorous process with the appropriate level of board oversight.
- The board of Trustees note that the Charity Commission did not find any conflicts of interest during their engagement with Penny Appeal.
“However, for the avoidance of doubt and to ensure that there is no perception of any conflict of interest the trustees have commissioned external experts to design a detailed conflicts of interest policy. This has been implemented throughout the organisation with the trustees and senior leaders attending relevant training and workshops.
“The unwavering commitment of the Board of Trustees of Penny Appeal is to learn from past experiences and to instil trust and confidence among all stakeholders by completing all of the corrective actions identified by the Charity Commission by 19th November 2023.
“The five actions outlined in the Charity Commission correspondence are accepted and the Board of Trustees of Penny Appeal look forward to completing these actions which will strengthen the organisation.”
Penny Appeal is one of Britain’s biggest Muslim charities, providing poverty relief across Asia, the Middle East and Africa. It also works in the UK to help homeless people and women who have experienced domestic abuse.
Its income for the year ending 2022 was over £23m and its charitable expenditure was over £15m.