Friday, 2 May 2008

'Key lessons' in charity collapse

Charity regulators have said there are "key lessons" to be learned from the collapse of a major charity and childcare provider last year.

One Plus provided a range of services to one-parent families.

The report from the Office of the Scottish Charity Regulator (OSCR) pointed to an apparent lack of "adequate skills" among board members.

It said no single factor was to blame for the collapse of the multi-million pound business.

However, it said the running of the charity and its response to funding issues were the main reasons for the collapse.

One Plus was one of Scotland's biggest charities with a turnover of £11m in 2005.


One Plus: One parent families (A report from the Scottish Charity Regulator) [116KB]
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But at the end of 2006 it had an overdraft of £2m which it had been told could not be extended.

The charity went into liquidation in January 2007 with debts of £2.27m

The report said while board members were enthusiastic "they did not seem to pay sufficient attention to the business aspects and support structures required to keep expanding services operating effectively."

It said members "did not appear to contain adequate skills and independence of thinking to reflect the needs of a multi-million pound business".

The report also said there appeared to be "no assessment of the range of skills needed in the board and no process to ensure that appointments to the board matched the charity's requirements".

The regulator also pointed to a "lack of timely or full financial information presented to the board."

'Skills inadequate'

Much of the charity's funding was also paid in arrears, presenting it with "substantial cash flow challenges."

The inquiry also found "a consensus of opinion" that the charity "delivered services for less than their full cost" because bosses did not think it politically acceptable to withdraw them.

The regulator also found a lack of timely or full financial information presented to the board.

It said: "The scale, skills and leadership of the finance department seems not to have been adequate for the size of the charity."

One Plus had been due to file its accounts with OSCR a month after it was placed in liquidation and that would have given warning of problems.

The previous Scottish Executive turned down a £2m rescue package for the charity which employed more than 550 people and assisted more than 1,000 families a year across the west of Scotland.

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