Regulator slams Christian charity which spent £450,000 on five-star hotels and travel
The Charity Commission has slammed Everlasting Arms Ministries after its statutory investigation into the charity found it had spent thousands on business class travel and five-star hotels.
It happened between 2016 and 2018 after the charity sold its main asset, a property in London, for £8million in a deal where the developer still allowed the charity to occupy the building.
Following the sale, the charity dramatically increased its spending without adjusting its budget accordingly, the Commission found.
The Commission opened a compliance case against the charity in 2019 to investigate the charity’s financial management. The regulator uncovered significant payments to directors and related persons and companies.
Following the findings, the regulator launched a statutory investigation later that same year. He concluded that there was ‘no long-term financial plan to sustain the expenses of the charity’ and that funds from the sale of the property were ‘significantly depleted’.
The regulator concluded that the charity’s financial mismanagement was evidence of mismanagement and misconduct in the administration of the charity.
Thousands of dollars spent on luxury travel and accommodation
The investigation found that after the sale of the property, the charity increased its spending without proper oversight and budgeting.
For example, in the financial years 2016 to 2018 the charity spent over £450,000 on ‘international reach’, including business class travel, five star hotels and payments to organisations. partners in China and India.
Due to poor record keeping and financial controls, the trustees were unable to demonstrate that all of its funds were spent solely on charitable purposes.
The charity spent over £181,000 on business class travel from April 2015 to October 2020.
Asked about this, the charity explained that a previous board had said at a meeting in 2016 that travel “can be tedious”, so business class travel was recommended so that administrators and administrators can be comfortable.
The investigation revealed that people who were not directors of the charity also benefited from business class travel. For example, an assistant senior pastor in 2016 was put on a flight to Ghana which cost £2,580 while the flight for an employee traveling economy class cost just £548.
Senior pastor’s salary increased by 61%
The investigation also revealed that after the transfer of ownership, the salaries of senior executives had been increased considerably.
The survey states: “In 2016 the senior pastor’s salary increased from £44,536.20 to £72,000 per annum and the assistant senior pastor’s salary from £45,000 to £54,000 per annum. The salaries of other employees have also increased, but not by such a large amount.
For the senior pastor, it is a salary increase of 61% and 20% for the assistant senior pastor.
Staff justified these increases to the regulator saying they were in response to the rising cost of living. However, the Commission found that the salaries of the senior pastor and assistant deputy minister had increased by far more than inflation.
The regulator is confident that the trustees have improved the charity’s finances
The charity’s directors changed during the investigation, and the Commission found that the former board was responsible for the mismanagement and misconduct.
Former trustees failed to properly manage finances, record charitable expenditures, or accurately document the sale of goods in its charitable accounts.
In 2020, the regulator froze the charity’s bank accounts. In 2021, he handed new trustees an action plan to improve Eternal Weapons Ministries, and the Regulator is pleased with the progress of the new board.
Amy Spiller, Head of Investigations at the Charity Commission, said: ‘It is essential that charities have sound financial management so that the public can have confidence that all of their funds are being used in pursuit of charitable purposes. With The Everlasting Arms Ministries, a sudden increase in revenue highlighted the failures of its then board of directors to put in place proper policies and governance.
“In order to avoid new management errors, our investigation had to intervene to freeze the association’s bank accounts and issue an action plan. We are pleased that the current directors have implemented the action plan and are committed to improving the charity’s financial management. We will continue to monitor their progress on this issue.
Civil Society News has contacted Everlasting Arms Ministries for a statement, but has not yet received a response.