6 years, 5 months, 21 days to complete. Kidsco chair Alan Yentob, 74, said the trustees were “disappointed that the commission, in criticising some decisions we took, has chosen to discount the clear findings of the High Court that completely exonerated us”.
The Inquiry has based its findings on the records that it was able to examine. Whilst the Inquiry was able to review substantial documentation, there were insufficient records for it to make findings in some areas. This is for two reasons. Firstly, some of the Charity’s records were destroyed at the time of its collapse. Secondly, it appears that some records may not have actually been created. The Inquiry accepts that when the trustees were first notified of the destruction of the Charity’s records, they gave immediate instructions for it to stop. In her Judgement, Falk J found that the destruction of the documents was contrary to the trustees’ instructions. The Inquiry notes, however, that the trustees were ultimately responsible for ensuring that the Charity made and retained proper records.
The Inquiry was told that records existed of decision making in relation to payments to clients, but it was unable to find such records amongst those that it was able to review. The Inquiry could find only limited and, in its view, insufficient records of decision making in relation to expenditure on some beneficiaries for school fees, rent and accommodation, cash payments, clothing and birthday presents. Whilst these payments would have been within the objects of the Charity the Inquiry saw insufficient evidence of how the Charity assessed the needs of individuals in relation to some of these payments.
In an interview with the Commission on 14 January 2016, the Charity’s CEO informed the Inquiry that the Charity assisted around 36,000 beneficiaries a year.... The Commission’s understanding is that the figure of 36,000 included indirect as well as direct beneficiaries, meaning that if one child in a family was assisted the other children in that family were counted as beneficiaries, and if one child in a school class was a direct beneficiary the other children in the class were counted as indirect beneficiaries. The Inquiry considers that in the interests of transparency and to avoid misconceptions, the methodology for calculating these figures should have been clearly articulated wherever they were cited, particularly in the Charity’s annual reports.
The Charity’s records seen by the Inquiry showed that between January and July 2014 the top 25 beneficiaries had spent on them a total of £311,049.99; this is an average of £1,777.43 per beneficiary per month. From the limited information that the Inquiry was able to review the Commission saw insufficient evidence of the decision making in relation to some of these payments to be satisfied that they were justified or made in the best interests of the Charity.
If some of the trustees had more experience in the areas in which the Charity was operating, they might have been better able to perform their role as ultimate decision makers by questioning the decision making of others – e.g. the trustees might have exercised greater oversight of the clinical team’s decision making if they had had the knowledge and experience to assess its decision making more effectively.
The Commission has had regard to the High Court Judgement and agrees with it that there was no dishonesty, bad faith, or inappropriate personal gain in the operation of the Charity.
In the Commission’s opinion, the Charity operated under a high-risk business model as illustrated by the combination of (i) heavy reliance on grants and donations, (ii) reliance on a key fundraiser (the CEO), (iii) a lack of reserves and (iv) a demand led service. The trustees were aware of these risks and continued to operate the Charity under the same model for many years, only developing a restructuring plan in the last months of the charity’s operation.
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