The UK Commission in a report published on its website in November said its inquiry concluded that there was 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 as trustees 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 show 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.”
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”.
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.”
The inquiry also discovered that the church maintained a shoddy tax record such as the failure to submit its self-assessment tax returns for 2010-2011 and 2012-2013 on time thereby incurring penalties.
It further found that the church did not maintain “sufficient records or processes to show that expenditure by employees had not been an employee benefit and therefore subject to tax;” as well as kept “sufficient records to show that charity vehicles were being used solely for charitable purposes and not used by trustees/employees for private use.”
The interim manager agreed to pay £250,000 to settle these violations with Her Majesty’s Revenue and Customs (HMRC).
Having found widespread evidence of misconduct and/or mismanagement, the interim management exercised its power to remove two of the trustees of the church (names not disclosed). However, the said trustees resigned before the commission could complete the process.