The United Kingdom Charity
Commission has indicted the country’s branch of Christ Embassy and its board of
trustees of fraud.
The indictment follows a
five-year investigation into the church’s finances and administration. The
church was founded by Chris Oyakhilome.
In a report published on its
website in November, the commission said its inquiry concluded that there were
serious misconduct and mismanagement in the church’s administration, inadequate
recording of its decision-making processes and failure to comply with its
grant-making policy.
The commission said it opened an
inquiry into Christ Embassy to investigate issues ranging from transactions
between the church and “partner organisations”, administration; governance and
management of the charity; financial controls and management of the charity and
if the trustees had complied with their responsibilities under the charity law.
The commission found out that the
church, between 2009 and 2011, paid substantial grants to organisations
classified as “partner organisation”.
According to the report, the
church’s account showed grants amounting to £1,281,666 were paid to Loveworld
Television Ministry; £118,995 to Healing School, £186,616 to International
School of Ministry, £10,000 to Christ Embassy Canada, £10,566 to Christ Embassy
France, £37,216 to IPPC Conference and £77,266 to Rhapsody of Realities.
However, after examining the
church’s records, the interim manager (IM) found no evidence of compliance with
the church’s grant-making policy in the documents examined.
“Documents examined showed a lack
of records and receipts to account for grants made and there appeared to be
little consideration given to whether the receiving parties had expended grants
appropriately and for intended purposes, as was required by the policy,” the
report said.
“This demonstrates failure to
comply with its grant-making policy and inadequate recording of decision making
by the trustees which is misconduct and/or mismanagement in the administration
of the charity.”
ADMINISTRATION AND MANAGEMENT
The inquiry noted that it had
“serious concerns” regarding the trustees’ decision making relating to the
charity’s relationship with Loveworld Limited, whose “primary objective was to
advance Christian programming in the UK and to provide entertaining and
educational programmes for the diverse demographics of the UK”.
According to the report, the
trustees informed the inquiry that payments made by the charity to Loveworld
Limited were not grants or donations as indicated in their accounts but
represented payments for broadcasting services provided by the company to the
charity.
But when asked to provide
documentation that recorded the decisions made in respect of payments made to
Loveword Limited, the charity could only provide two sets of minutes of trustee
meetings.
“However, neither set of minutes
included any decision or resolution to make payments to a company of which one
trustee was sole shareholder,” the report said.
“The trustees did not have any
formal contracts in place or indeed rationale for using Loveworld Limited as
opposed to any other broadcaster.
“The IM’s scrutiny of charity
records and documents demonstrated that the trustees had failed to comply with
the terms of the charity’s governing document and that they failed to comply
with the requirements of section 185 of the Act in paying for services by a
company owned by a trustee.
The inquiry also found out that
the church allowed Loveworld Limited to make use of its property valued at £1.8
million from 2006 to 2012 for free.
When asked, the trustees said
Loveworld had only occupied a “small part of the premises”, on an informal
basis, adding that the arrangement had been formalised since 2012 and the
company was charged £75,000 per year for use of the property.
But the inquiry considered that
the level of rent indicates that Loveworld Limited occupied a substantial
proportion of the building.
“This indicates that the trustees
failed to act in the charity’s best interests or with reasonable care and skill
in terms of their decision-making and in the negotiation of the arrangements
with Loveworld Limited and is not seeking appropriate advice regarding
formalising occupation of premises by the company,” it said.
“In addition, the fact that the
charity was also subsidising a proportion of the company’s utility bills
indicates a lack of reasonable care and skill and a failure to use the
charity’s resources responsibly. These actions were not in the charity’s best
interest or in furtherance of its objects and were misconduct and/or
mismanagement in the administration of the charity.”
CONFLICT OF INTEREST
The inquiry also discovered that
in 2013, the church paid Ventaja Limited £44,925 for construction and
decoration of a stage. It found out that the company was owned by Tony Obi
(trustee G) a member of the church’s board of trustees, who was also a zonal pastor
of the church.
“The IM found evidence indicating
that Trustee G had employed the services of Ventaja Limited to provide services
to the charity, but it was unclear from the charity’s records what
considerations were made regarding potential conflicts of interest. It is
unclear to the Commission that the decision-making trustees, in position at the
time payments were made, were acting only in the interests of the charity.
“The trustees failed to provide
any records to evidence that conflicts of interest had been identified or
correctly managed prior to the opening of the Inquiry.”
LACK OF UNDERSTANDING OF FINANCIAL MANAGEMENT
Under the church’s financial
control and management, it was discovered that cash collection and payment
recording processes were not uniform across the charity.
Nine bank accounts were
identified as holding funds belonging to Christ Embassy, Nigeria which is a
separate company to the church.
“The inquiry found no evidence to
suggest that any of the banking institutions were aware that they were holding
funds controlled by Christ Embassy Nigeria,” it said.
“In addition, the accounts were
not named in such a way as would indicate the funds are controlled from
Nigeria: for example, two of the active accounts are named Christ Embassy East
London.
“The inquiry, not being satisfied
that the funds held in these accounts were owned by Christ Embassy Nigeria,
exercised legal powers and issued orders dated 8 august 2014, under section
76(3)(d) of the Act, freezing six of these nine bank accounts, protecting funds
to a value of £615,420.
“In the absence of clear evidence
to support the trustees’ position, the Inquiry concluded that funds held in the
accounts belonged to the charity and these accounts remained frozen until the
order was revoked on 24 August 2016.
“This demonstrates the trustees’
failure to deal with the bank accounts appropriately and their lack of
understanding of financial management and the importance of clearly identifying
the charity’s property and/or assets held on behalf of another entity and is
mismanagement and/or misconduct in the administration and governance of the
charity by the trustees.”
FAILURE TO SUBMIT TAX RETURNS
The IM informed the inquiry that
the trustees’ failed to submit the church’s 2010-11 and 2012-13 self-assessment
tax returns on time thereby incurring penalties for late submissions.
“The IM established that the
charity had failed to maintain sufficient records or processes to show that
expenditure by employees had not been an employee benefit and therefore subject
to tax,” it said.
“Sufficient records to show that
charity vehicles were being used solely for charitable purposes and not used by
trustees/employees for private use; sufficient records to support the charity’s
claim to Gift Aid and to demonstrate the expenditure was in fact charitable.
“The interim manager agreed to
pay £250,000 to settle these violations with Her Majesty’s Revenue and Customs
(HMRC).”
UNDISCLOSED ASSETS
The Inquiry team also discovered
three UK properties that were not disclosed to the commission by the trustees.
The trustees reportedly said
despite the legal title of the properties being vested in the name of two of
the church’s trustees, the properties “were acquired on behalf of, and held in
trust for, Christ Embassy Nigeria”.
“The Inquiry noted that the Land
Registry entries in respect of the 3 properties made no reference to the
beneficial owner being Christ Embassy Nigeria and documentation supplied by the
trustees provided no evidence to support their assertions.”
INADEQUATE INSURANCE COVER
The inquiry discovered that the
trustees failed to secure adequate insurance to protect church’s assets and
protect them against claims for accidental damage to property/or compensation
for accidental injury to third parties.
“The failings of trustees to act
appropriately left the charity open to financial and reputational risk and
losses, as well as to risk of litigation,” it said.
UK govt are just hungry, lol..clear case of attack on the church
ReplyDelete