The inquiry, which began in November 2015, found that the trustees had made unauthorised salary payments to one trustee amounting to £1,360, even though the charity’s governing document prohibits the employment of trustees.

It had also provided a zero interest loan to two members of the local community totalling £20,000 which amounted to twice the size of the charity’s 2015 income.

Details of the loan were made apparent when the Commission was contacted by Ipswich Borough Council which had undertaken due diligence checks concerning a Right to Buy application made in relation to a council house in Ipswich. The tenants identified to the council that they were meeting part of the purchase price via a £20,000 interest free loan from the charity in the form of two £10,000 cheques.

A letter signed by the tenants and the charity was provided to the Commission by the council. The letter confirmed that the loan was zero interest and therefore not offering a return to the charity.

The inquiry established that the charity had inadequate internal financial controls and could not account for all of its income and expenditure. The Commission identified discrepancies between the charity’s statutory accounts, income records and income banked with, in total, £207,811 more banked between 1 January 2012 and 30 January 2015 than the charity’s internal financial records indicated.

The report also criticised the trustees’ approach to engaging with the Commission, saying that their conduct fell below that which the regulator and the public expect, including by initially failing to take prompt action to address concerns identified by the Commission before it opened the inquiry, relating to late submission of accounts.

Following the opening of the inquiry, and as reflected in the report, the Commission acknowledges improvements in the trustees’ conduct.

As part of the inquiry, the Commission has made an order requiring the trustees to complete a number of actions to address the failings and regulatory concerns identified and says it will take further regulatory action if they fail to comply with the order within a stated timeframe.

Michelle Russell, director of investigations monitoring and enforcement at the Charity Commission, said: ‘Trustees must comply with their charity’s governing document and the law and must manage their charity’s resources responsibly. That hasn’t always happened at this charity, putting it at risk of not being able to carry out its charitable purposes.

‘I now hope the trustees take the necessary steps we have set out in our order to improve the charity’s governance in the future.’

Ipswich Kurdish Islamic Cultural Centre: Inquiry report is here.