Independent Examination findings regarding previous projects
Thursday 15th October 2020
After new trustees joined the charity in 2019 they initiated a process of review of the charity’s projects and finances for the previous two financial years. In late June 2019 an Independent Examination was commissioned which completed its work and published its report in August 2020. As stated in our statement on the 21st August (seen here https://human-aid.org/news/independent-review-2020) there were “inadequate operational practices due to a lack of oversight by Management.” Below are some further explanations of these “inadequate operational practices” that both the new trustees uncovered as well as the Independent Examination.
New trustees identified two key factors related to delay in reporting for Hajj Ride. The first being a high turnover of staff, as there were 4 different Programme Managers who dealt with Hajj Ride alongside different Fundraising Managers. This resulted in gaps in communication and information sharing. The second was the financial recording system used at the time was inadequate and was unable to break down fundraising figures as was expected by the Hajj Ride team.
To resolve the issue the charity has started the process of implementing a new system/software called Salesforce to mitigate staff changes and any gaps in communication and information sharing. Also the charity has started using a new financial recording system, Xero which enables a more robust reporting and transparent financial reporting system.
This was a challenging project encountering obstacles from the start which resulted in delays in implementation. However, Alhamdulillah by Ramadan 2020, the project was initiated. Delays began with the closing down of the original partner organisation that would have partnered with Human Aid UK. Thereafter, the Charity Commission placed a restriction order on the Charity preventing Human Aid UK from sending any funds to Syria. Eventually after finding a new delivery partner who was able to deliver Hopeville the charity was granted permission by the Charity Commission to send the funds for Hopeville, which happened in Ramadan 2020.
The project is underway and regular video and photo feedback is being provided regarding the stages of development of Hopeville.
The Wellbeing Centre project also grappled with challenges that led to delays in project delivery due to the political climate in Bangladesh and the government's attitude towards the Rohingya. After transferring funds for the Wellbeing Centre, the bank account of our Charity Partner was frozen by the Bangladeshi Government. The Charity Commission were alerted to this unforeseen delay. After a lengthy delay Human Aid UK has managed to get in place an SLA for the transfer of funds from the original charity partner to a new one who can then go and deliver the Wellbeing Centre.
The new trustees recognise that there was a lack of communication with donors as to the delay of the implementation of Hopeville and the Wellbeing Centre. Going forward the charity will be sending regular updates, especially in the event of any unforeseen delays in the implementation of the project.
There were concerns about the water tanks that were purchased in/for Somaliland, as well as lack of regular reporting and breakdown from our delivery partner. The new trustees organised meetings with the charity partners to resolve the outstanding issues. A plan was put in place to work towards resolving the concerns.
Going forward the charity will no longer be working with this partner due to the difficulties Human Aid UK experienced in communication, reporting and financial management. The charity has a new partners policy which helps mitigate these kinds of problems from happening again through a new stringent reporting and payment process.
Grenfell Fire Project
After the Grenfell Tower Fire the charity raised £27,318.87 from donations as well as clothing. The charity was able to expend £17,971.87 for the delivery of this project providing cash donations, bereavement support and clothing. Due to the number of organisations providing support for Grenfell fire victims the charity was unable to identify further beneficiaries still in need. Therefore £9,085.85 remained unspent and is still ringfenced. The new trustees acknowledge the gap in communication that has taken place with this project and will be contacting donors soon about this ringfenced money.
The former trustees identified that the 100% donation policy wasn't manageable for the charity. After conducting a survey of the charity sector, it appeared that many charities claiming 100% donation were implementing that policy in a way that was correct yet different to what the average donor understood as “100% donation”. As a result, Human Aid UK amended its approach in the interest of transparency and openness and adopted an Ethical Donation Policy by the end of 2018 which moved away from 100% donation policy. All marketing of the 100% Donation Policy was removed. This policy was reviewed by new trustees and a more transparent policy was put in place, where for every £1 spent, 90p goes on charitable activities and 10p is spent on administrative costs. This policy can be seen on the Human Aid UK website. The policy was reviewed by the Islamic Council of Europe before being implemented.
To ensure the charity stays on target and in line with its donation policy, the budget is regularly reviewed with quarterly targets in place. If the charity fails to meet two quarter targets then necessary cut backs will happen to ensure the charity remains in line with its donation policy.
Gift Aid Claim
It is common practise for charities to use fundraising platforms to claim Gift Aid. MuslimGiving provided this service to Human Aid UK as have other fundraising platforms. Due to staff inefficiency there was a backlog of Gift Aid claims, therefore on one occasion only the charity used MuslimGiving to process the Gift Aid on donations received in that period. In October 2018 £25,958.09 of Gift Aid was claimed, this service provided by MuslimGiving was at a significantly reduced cost of £342.50 (1.32%) which was deducted from the total amount of Gift Aid claimed. It is important to note that MuslimGiving then further supported Human Aid UK by donating £1,000 to the charity in January 2019.
The charity recognises that employees of Human Aid UK were also members of Muslim Giving at the time of this particular Gift Aid claim. The charity further recognises that there were clear conflicts of interests, something that has been addressed in the Independent Examination report. Nevertheless, the administration of Gift Aid was performed as per the charity’s internal operational rules at the time. Following the internal review the charity is relooking at how gift aid claims are authorised and the correct process to safeguard the charity from any potential harm.