Regulator Appoints Manager To Charity Wick Academy Development Fund As Part Of Decade-long Inquiry
16th January 2021
The Scottish regulator has appointed a manager to take over a charity as part of a decade-long inquiry to ensure its trustees do not part with its property without consent.
The Office of the Scottish Charity Regulator opened an inquiry into Wick Academy Development Fund in September 2010 after concerns were raised about its public benefit, and a failure to make use of its accumulated funds.
Formed in 2002, the charity's purpose is to "provide facilities, or assist in the provision of facilities, in the interests of social welfare for recreation and other leisure-time occupation so that their conditions of life may be improved".
Up until April 2009, the charity raised £140,000 by selling lottery tickets in the Wick community. However, none of the money was ever spent, according to the OSCR.
Over the next decade the regulator said it had engaged repeatedly with the charity to try to ensure that its funds were used to further its charitable purposes.
But apart from unsuccessful discussions with the local authority about support for Wick High School, the regulator said the charity had not undertaken activities in furtherance of its charitable purposes in the period since it suspended fundraising.
The OSCR said it was necessary to act in order to protect the property of the charity.
Its report says: "The charity is not providing public benefit and is therefore at risk of removal from the Scottish charity register.
"Should the charity be removed from the register the charity trustees would remain under an obligation to apply the charity's assets in accordance with its purposes.
"We have no confidence that the charity trustees would comply with this requirement."
In October last year the charity's trustees were told they could not part with its property without the consent of the regulator.
Trustees then sought to dissolve the charity and transfer its property to other charities, but this was refused.
Further attempts by the OSCR to engage with the charity trustees to address the issues were unsuccessful, the regulator said.
It said that as a result, Eileen Blackburn, a chartered accountant at the accountancy firm French Duncan, had been appointed as a permanent “judicial factor" to manage the charity's affairs and ensure its property was used for public benefit and in furtherance of its charitable purposes.
Section 33 Report by OSCR
THE SCOTTISH CHARITY REGULATOR (OSCR)
Updated report made under section 33 of the Charities and Trustee
Investment (Scotland) Act 2005
SC032787 Wick Academy Development Fund
A judicial factor has been appointed to manage the affairs of Wick Academy Development Fund. As a result of inquiries undertaken it appeared to OSCR that it is necessary to act to protect the property of the Charity, and ensure that this was used for public benefit in furtherance of its purposes.
Wick Academy Development Fund is a charity established in Scotland (Scottish Charity Number SC032787) and was recognised as a charity by HM Revenueand Customs (HMRC) on 15 March 2002. The Charity's objects are to:
"promote for the benefit of the inhabitants of Wick and the environs without distinction of sex, sexuality, political, religious or other opinions by associating with the local statutory authorities, voluntary organisations and inhabitants in a common effort to advance education and to provide facilities, or assist in the provision of facilities, in the interests of social welfare for recreation and other leisure-time occupation so that their conditions of life may be improved".
From its formation until April 2009 the Charity engaged in fundraising activity by selling lottery tickets in Wick. That activity ceased on 28 April 2009.
In September 2010 OSCR opened an inquiry into the Charity, having received concerns as to whether the Charity was providing public benefit and about its failure to make use of its accumulated funds. In the period since then OSCR has engaged repeatedly with the Charity to try to ensure that it used its funds to further its charitable purposes.
The Charity has not undertaken activities in furtherance of its charitable purposes in the period since it suspended fundraising by lottery (other than the making of enquiries in relation to available land and ultimately unsuccessful discussions with the local authority about support for Wick High School). It has failed to undertake such activities while holding funds of approximately £140,000. These
funds were raised within the local community in order to further the Charity’s purposes.
Following our inquiries, we concluded that there is no realistic prospect of activities being undertaken by the charity trustees in furtherance of the Charity’s objects. The Charity is not providing public benefit and is therefore at risk of removal from the Scottish Charity Register. Should the Charity be removed from the Register the charity trustees would remain under an obligation to apply the
Charity's assets in accordance with its purposes. We have no confidence that the charity trustees would comply with this requirement.
Given the seriousness of the situation and our concerns about the Charity’s funds, we considered it necessary on 13 October 2020 to take interim measures to protect the charity’s property, directing the charity trustees not to part with it without OSCR’s consent.
While some of the charity trustees then sought OSCR’s consent to dissolve the charity and transfer its property to other charities, OSCR was unable to consent to these proposals. Further attempts to engage with the charity trustees to address the issues were unsuccessful.
OSCR therefore applied to the Court of Session to appoint a Judicial Factor to manage the affairs of the Charity, and on 7 January 2021 the Court appointed Eileen Blackburn, Chartered Accountant, French Duncan LLP as permanent Judicial Factor to the charity.
8 January 2021