Interim Managers: 2006/07

The Charities Act 1993, at Sections 18 & 19, as amended by the Charities Act 2006, gives the Charity Commission the power to appoint an Interim Manager who shall act as a receiver in respect of the property of a charity.  This power may only be exercised following the opening of a formal Inquiry under section 8 of the Act and after evidence is obtained of misconduct or maladministration in the administration of a charity or a necessity to protect the property of the charity.

The appointment of an Interim Manager is recognised by the Commission as a particularly interventionist action because the Interim Manager is normally appointed to manage a charity to the exclusion of the trustees and because the charity normally has to pay the Interim Manager’s fees.  For this reason an appointment is only made after extremely careful consideration of other possible solutions to the problems the charity in question faces.  Where possible, appointments are made after a tender exercise, the purpose of which is to find an appointee with the right skills and experience at a price that will provide the charity with value for money.

Some appointments have been with the agreement of the charity trustees, but most are imposed because in the Commission’s view the problems facing the charity are sufficiently severe and the trustees are either unwilling or unable to put matters right themselves.

Details of individual appointments are provided in the Inquiry Report which is published after the conclusion of each Inquiry, unless there are exceptional circumstances. These reports are available on the Commission's website. However to further increase transparency the Commission has decided that at least once each year it will publish together certain details of all Interim Manager appointments closed in the financial year and the number of such appointments remaining in operation. Details for the financial year ending 31 March 2007 are provided below.

At the end of an appointment and on closing an Inquiry, a 'protections' figure is calculated to indicate the amount of charitable funds safeguarded or recovered as a result of our work. Such protections are subject to close scrutiny and if there is any significant doubt about our role in protecting such charitable funds, then no protection is calculated. It is accepted that much of our work will not result in claimed protections and in such cases, other measures of our work are available, such as irregularities and inefficiencies found and put right.

As at 31 March 2007 four Interim Managers remain in place.

Interim Manager cases concluded in 2006/07

(all figures include VAT)

End Notes

i Inquiry reports will be available in due course on the Commission's website.
ii The cost of the IM includes both remuneration and disbursements. Remuneration is paid from the charity's income to an amount or to a formula agreed by the Commission at the outset of the appointment. This remuneration is subject to change where work arises that could not have been reasonably foreseen at the time of the appointment. Disbursements represent the costs and expenses of the IM, incidental to the appointment, for example travel, photocopying, etc, and are also payable from the charity's income.
iii Legal accountancy and other professional costs. During the period of the IM appointment costs of professional advice in relation to the business of the charity may be properly incurred. These may include items such as specialist legal, accountancy or IT advice. These costs may be in relation to the normal business of the charity such as the annual preparation of accounts or the annual audit, they may be one-off costs for example in relation to the sale or acquisition of property or they may be specifically related to the IM appointment for example where the IM needs to obtain legal advice in relation to unauthorised payments to trustees.
iv. At the time that the IM was appointed, it was thought that the charity had substantial interests in properties.  However it transpired that debts attached to those properties resulting in a net worth of £8,000 after the deduction of the IM’s fees.  The IM’s fees in this case were restricted to £15,000 + VAT whereas in fact the IM had accumulated further unbilled fees in excess of £70,000.
v. The Commission’s intervention has ensured that the Recreation Ground is no longer being managed by the local Council as part of its corporate property, but instead has a clearly identified charitable purpose for the benefit of the public and is being managed for that purpose by the Council as trustee.