IF Charity claimed money in the Government’s Corona Virus Job Retention Scheme even though its filed accounts for the previous years indicated it had no employees.

IF is a charity whose mission is “to empower the people of Gaza in their efforts to build strong and resilient communities through poverty relief, education, community development and medical aid.”

IF’s 2019 accounts, which were signed  by its trustees and accountant on 28 October 2021, have only this week been filed, and published on the Charity Commission website.  The accounts reveal some concerning issues.  IF’s auditors, M Akram and Co, have offered a “Qualified Opinion”.

The auditor’s report states:

“The charity operates through trustees and advisors and, as reported in prior years’ financial statements, the charity does not have any employees or payroll. During the course of our audit, we noted grants were being received from HM Revenue & Customs relating to Coronavirus Job Retention Scheme (CJRS) by the charity, post year end. We brought this to the attention of the trustees, and it was acknowledged that the charity has been operating payroll for several years.

Further review of payroll records revealed a number of individuals on payroll and the aggregate salary expense from the period I January 2014 to 31 December 2019 amounts to £181,142. The expense has not been recognised in the financial statements over these years.

We have been unable to obtain personnel records to verify the existence of these employees. We have not been provided with records which would demonstrate work carried out by these employees and how their wages were paid. We have been unable to perform alternative audit procedures to verify if the individuals on payroll were employees of the charity. The management’s response to a number of our queries relating to payroll were inconclusive.

Due to the limitation of scope imposed, we were unable to obtain sufficient and appropriate audit evidence to be able to form an opinion as to whether the payroll costs should be included in the financial statements and whether the trustees were administering payroll for the benefit of the charity. We are therefore unable to conclude that the information within these financial statements for the current or comparative period are free from material error or misstatement.”

IF’s annual reports for each of the years 2014 to 2018 said that

“During the year the charity did not employ staff but engaged with external suppliers for such support services.”

In response to the Auditor’s qualification of their accounts,  IF’s Trustees report stated:

“These accounts have been qualified on the basis of an error of non-reporting regarding payroll. The trustees provided an explanation to the auditors and are satisfied the issue had no negative bearing on the charity. The issue has been resolved in line with the development plan, and an engagement with professional payroll services.

Furthermore, it should be noted this oversight amounted to less than 2% of the financial expense in any one year and as such this unintended error was not picked up earlier. At the time of the audit the previous trustee was incapacitated with Covid-19 and was unable to engage with the auditors. Despite this, we were able to provide all the relevant records available to us.”

We hope that the Charity Commission will investigate these discrepancies.

IF has a history of discrepancies regarding its claims on government funds.    IF is not recognised for Gift Aid  according to the Charity Commission website, but nevertheless previously advertised that its donors could claim Gift Aid.  However, HMRC was informed of this discrepancy and the reference to gift aid was removed from IF’s donation page on its website earlier this year.