The regulator opened a class statutory inquiry into The Martin Foundation and The Collegiate Charitable Foundation in January 2018.

The charities, both based in York, provide bursaries to enable students to attend independent primary and secondary schools, provide advertising, facilities and equipment for the schools, and assist the local community.

However, The Martin Foundation is not currently carrying out any activity. Its accounts for the past five years show an income of between £6m and £9m. According to its Charity Commission filings, The Collegiate Charitable Foundation had an income of £18m for the financial year 2017.

After receiving a complaint from the public and information from other regulators the Commission engaged with the charities and went on to identify what it called ‘clear and ongoing serious regulatory issues’ relating to the administration of the charities by the trustees.

These included the management of conflicts of interest, protecting and properly accounting for the charities’ assets, and potential unauthorised trustee benefit.

The inquiry is examining the extent to which potential conflicts of interest and connected party transactions have been properly managed; whether there has been any unauthorised trustee benefit; and whether the charities operated for exclusively charitable purposes.

Due to the seriousness of its regulatory concerns the Commission has appointed Geoff Carton-Kelly and Tom McLennan of FRP Advisory as joint interim managers of the charities. They have all the powers and duties of trustees and will act to the exclusion of the current charity trustees. These are temporary appointments and will be reviewed on a regular basis in line with normal procedures.

It is the Commission’s policy, after it has concluded an inquiry, to publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were.

Report by Pat Sweet