The Regulator for Charities in England and Wales
Doncaster Mosque Trust
This is a statement of results of an inquiry under section 8 of the Charities Act 1993 as amended by the Charities Act 2006 (“the Act”) and published on 10 March 2008.
The Charity
1. The Doncaster Mosque Trust has as its object:
“To build a Mosque for the use of the Muslim Community and thus provide the following facilities -
a. School for Quranic Education
b. Centre for religious education and other religious activities
c. Funeral services for the Muslim community
d. Islamic Library
e. Performance of Marriage Ceremonies and other Social activities within Islamic Law
f. The Imam, Khateeb, Muazzan and other Doncaster Mosque Committee members should be practising Ehle Sunnat Waljamat that they believe in all Creeds, that is, Hanafi, Shafi, Malki, Humbali and Deo-bundi etc., as Muslim and accept it proper to pray with and behind such an Imam”.
2. The Trust is governed by a constitution and although its object is charitable it has not been registered as a charity.
Source of Concern
3. In 2004, a group of worshippers at the Mosque brought court proceedings to obtain accounts from the trustees. As a result of those proceedings, the group of worshippers approached the Commission, with a view to persuading the Commission to use its statutory powers to obtain the charity’s accounts. The Commission attempted to contact the trustees, but they refused to respond.
Commission Inquiry
4. On 18 August 2005 the Commission opened an Inquiry under section 8 of the Charities Act 1993.
Issues
- Whether the trustees were able to account for their stewardship of the charity;
- Whether the trustees had kept accounting records in accordance with section 41 of the Charities Act 1993;
- Whether the trustees had prepared statements of account in accordance with section 42 of the Charities Act 1993;
- Why the trustees had failed to comply with their statutory duty to register the charity with the Commission.
Timescale of Inquiry
5. The Inquiry started on 18 August 2005 and closed on 15 January 2007.
Findings
6. The trustees failed to show that they had kept proper accounting records in accordance with section 41 of the Charities Act 1993.
7 They were still however under a duty to produce accounts under section 42 of the Charities Act 1993.
8. Accounts were eventually produced from the records the trustees did maintain but they did not comply with the requirements of the Statement of Recommended Practice 2000.
9. During the course of the Inquiry a dispute arose within the charity between the trustees, who wanted membership to be confined to Muslims of the Deo-Bundi sect, and the group of worshippers who had applied to court and who wanted membership of the charity to be open to all Muslims in Doncaster.
10. The original trustees had made enquiries of the Commission concerning registration but had subsequently failed to register the charity.
11. The charity’s constitution had twice been amended, but there was disagreement about the validity of those amendments. On balance, the Commission took the view that the charity was governed by the constitution as altered by the first amendment.
Conduct of Inquiry
12. The Commission met with members of both groups separately. However, it became clear that there was very strong disagreement about who was entitled to membership and about which constitution governs the affairs of the charity.
Conclusions
13. The doctrinal issue could not be resolved by the Commission. Unless the members were able to decide the matter themselves, they would need to take other steps, perhaps with the assistance of an independent mediator.
14. It would be inappropriate to pursue the question of registration while there continued to be a dispute about which constitution governs the charity and who was entitled to be a member.
15. The Commission made clear to the trustees that once the dispute was resolved, we expected the trustees to register the charity.
Regulatory Action Taken
16. The trustees were given advice and guidance on their duty to keep accounting records under section 41 of the Charities Act 1993.
17. The trustees were given advice and guidance that it would be necessary to redraft the accounts in accordance with the Statement of Recommended Practice (SORP) 20001.
18. The trustees were instructed to regularise the constitutional arrangements and, were advised once they had done so, they were under a legal duty to register the charity under section 3(7)(a) of the Charities Act 1993.
Resources Applied
19. The Commission adopted a multi-disciplinary team working approach on this case which involved both accountancy and legal advice and casework management. Commission Officers attended several meetings with both the worshippers and the trustees during the course of this case.
Lessons for Other Charities
20. Where a fundamental dispute arises within a charity, the successful resolution of that dispute depends upon the willingness of the parties to co-operate with each other in the wider interest of the charity. The Commission is often able to intervene to facilitate an agreed solution. It is not usually able to impose a solution upon unwilling parties. In such cases, very often the only solution is through litigation.
21. It is the duty of all trustees of a charitable organisation to apply for registration of a charity under section 3(7)(a) of the Charities Act 1993, where their income exceeds £5,000 per year. Further information about how to register a charity and our requirements can be found in the Commission’s Registration Application Pack.
22. The Charity Commission is setting up a Faith and Social Cohesion Unit to provide support and advice to faith-based groups through outreach work, capacity building training and guidance. During the Commission’s previous engagement with faith based organisations, we were told how much they would appreciate further support and guidance from the Commission, including on governance and financial management. Further information on our new Faith and Social Cohesion Unit can be found on our website.
23. Every charity must comply with the legal requirements for the preparation of accounts and reports set out in Part VI of the Charities Act 1993 and, where appropriate, the related Charities (Accounts and Reports) Regulations 2005. Information for charities on preparing reports and accounts can be found on our website.
24. Even where a charity is not legally obliged to file accounts with the Commission, the charity trustees should still prepare accounts. Under section 47 of the Charities Act 1993 a member of the public is entitled to ask a charity for a copy of these accounts.
|
Para |
Issue |
Charity Commission Guidance and relevant legal obligation |
|
16, 17, 23, 24 |
Duties to keep accounting records and file accounts |
Sections 41, 42, 47 of the Charities Act 1993 The Charities (Accounts and Reports) Regulations 2005 are at http://www.opsi.gov.uk/si/si2005/20050572.htm |
|
18, 21 |
Duty to register a charity |
Section 7 of the Charities Act 1993 |
|
22 |
Faith & Social Cohesion Unit |
1. Charities preparing accounts for periods beginning on or after 1 April 2005 should refer to SORP 2005 applies
Date of Publication: 10/03/2008