Pug Life Rescue, formerly named Muffin Pug Rescue, repeatedly failed to file its accounts since 2016 ‘despite being given ample opportunity and support’ from the Charity Commission
Now two directors have been struck off the trustees’ register after extensive financial misconduct and abuse of the Gift Aid scheme.
The charity had been registered with the Charity Commission since October 2015 but failed to supply any accounts until September 2024. This triggered concerns at the regulator and in 2022, the Commission opened a statutory inquiry into Pug Life Rescue over ‘potential misconduct and/or mismanagement at the charity’.
The Commission also suggested that there could have been ‘possible misappropriation and/or misapplication of the charity’s funds’, and had to determine if the trustees had ‘avoided or adequately managed potential conflicts of interest and if there has been any unauthorised direct or indirect private benefit’.
The now disqualified trustees of the charity, Kristine Lovelady and Declan Poole hired an accountant in January 2021. However, the accountancy firm terminated its appointment in August 2022 because the charity had not given them the correct information despite continuous requests to do so.
Following the launch of the investigation into Pug Life Rescue, Warr & Co accountants were appointed to oversee the accounting process and to review previous years’ accounts. Nicola Joyce, ACA, from Warr & Co was appointed as the independent examiner in in September 2022.
The financial review found ‘a number of errors with Gift Aid claims between 2017-22’, with a ‘significant overpayment’ to the charity.
Between 2017 and 2021 the charity received £250,708 in Gift Aid payments, largely down to Poole making ‘numerous errors in completing those returns’. Due to this, Pug Life Rescue owed £213,567 to HMRC.
Since this discovery the trustees have met with HMRC to discuss a payment plan, and to submit any outstanding Gift Aid claims.
Additionally, the Commission investigators found ‘numerous instances of non-charitable expenditure’ from the bank account of the charity. This included purchases in clothing stores, restaurants, and spending £7,000 on a Rolex registered to Poole.
The Charity Commission said: ‘This expenditure represented an ongoing pattern of lifestyle payments that clearly benefitted both Kristine Lovelady and Declan Poole who were the only trustees in control of the charity’s funds at the time the expenditure was made.’
Between 4 August 2021 and 15 July 2022 the total receipts for the charity hit £574,459.76, with outgoings being higher than this at £583,363.53. No supporting evidence was provided by the trustees for this expenditure.
The pair also claimed that they had provided loans to the charity, although there was little evidence for this apart from spreadsheets provided by Lovelady. However, there was evidence of Lovelady using her own funds to import dogs from China although not enough to equate to the £361,951 spent on this.
The pair also used the funds of the charity to rent a ‘sizeable family home’ for £2,000 per month, with only some of the dogs being housed here. ‘In respect of accommodation costs, this enabled Kristine Lovelady and Declan Poole to personally benefit from charitable funds to live entirely rent-free in a sizeable family home,’ said the Charity Commission. There was also evidence of the charity paying for the living expenses and utility bills for the pair.
The father of Poole, and partner to Lovelady, also lived at the property and was paid £48,165 between 2015 and 2022 for ‘driving’.
Poole also took loans from the charity for £23,360 to fund his private company which sold a patented dog food. Again, there was no formal loan agreement between the charity, and there has been no repayments of the loan.
Both Poole and Lovelady have now been disqualified from being a trustee or senior manager of a charity and there are now five new trustees in charge of the charity.
The inquiry into the charity is now closed after the publication of the report by the Charity Commission. Joyce stated that ‘no accounting records were kept’, and they ‘do not comply with the applicable requirements concerning the form and content of accounts’.
Joyce continued: ‘I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.’
Despite the inquiry from the Charity Commission, and the dismissal of the former trustees, the charity continued to operate, rehoming over 130 dogs in the 2022/23 financial year, as well as supporting over 70 dogs with medical needs. The charity says most of its costs have been from vet fees since the dismissal of the former trustees.
The Charity Commission said: ‘Following the removal of Kristine Lovelady and Declan Poole as charity trustees, the new trustees have continued to operate the charity and have been working to rectify the issues at the charity.
‘The charity is now up to date with its accounting information, and robust financial controls and policies have been put in place. To mitigate the reputational damage suffered to the charity, on 18 December 2023 the trustees made the decision to change the name of the charity to Pug Life Rescue.’
Both Dole and Lovelady have been permanently removed from acting as a trustee under s79(4) of the Charities Act.