Official report criticises former trustees of Kids Company

An official report by the Charity Commission for England and Wales has criticised Kids Company for operating with a ‘high risk business model.’

Key Points

  • The regulator made a formal finding of ‘mismanagement in the administration of the charity’ related to its ongoing failure to pay creditors, its own workers and HMRC on time.
  • The mismanagement of the company led to hundreds of staff losing their jobs and services relied on by thousands of vulnerable young people ceasing.
  • The Commission criticised the charity for not having sufficient levels of financial reserves and challenged whether making relatively high level payments to a small group of high-risk children was appropriate, although it was the charity’s choice to do so.
  • No regulatory action will be taken against the trustees or the founder as there was no evidence that any dishonest actions had been made or any personal gain received.

Lessons for the wider sector are included in the report. These relate to:

  • The importance of checks and balances, and the right blend of skills and knowledge, in charity boards;
  • The requirement for operating models to reflect the nature and scale of the charity;
  • The role of financial planning and reserves policies;
  • Considerations when charities grow.

Link: Official report criticises former trustees of Kids Company

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