The air ambulance charity that saves lives across Warwickshire loaned £27k to an employee and also lost £111k on a failed West End fundraising event, a watchdog has found.
Inspectors at the Charity Commission investigated detailed allegations about The Air Ambulance Service making significant losses after bulk-buying tickets for the flopped musical The Bodyguard in London.
The commission discovered it had aimed to sell on the tickets at a profit but instead made a £111,000 loss.
The case study report says: “We found that the event was poorly planned and failed to apply proper project management methodology.
“We also found that the charity failed to make adequate risk or due diligence assessments.
“We concluded that the processes in place for managing the event were significantly inadequate and that this amounted to a serious failure on the part of trustees.”
Trustees accepted that the management of the event was poor, but maintain that, at the time, they felt they were appropriately overseeing staff involved in the event.
None of the information they were provided at the time by the charity’s senior executives indicated that it would cause such large losses, the trustees said.
Trustees also insist that, although the original purpose of the event did not raise funds, it raised the charity’s profile and identified future donors. It may even have led to a recent substantial donation, the Charity Commission conceded.
After a separate tip-off, the watchdog also found a £27,000 loan had been made to one of the charity’s senior employees, which The Air Ambulance Service has said was “to retain a high-performing member of staff”.
The staff member in question is repaying the loan and payments are up-to-date.
But inspectors said it was “not clear on what legal basis the loan was made”.
The Charity Commission report continued: “Charities may only apply funds in a way that helps them further their purposes for the public benefit and in the best interests of their beneficiaries.
“We established that the loan was put in place by the CEO [Andy Williamson] and the chair, and that the wider trustee board was only informed after the event.
“The charity told us it had telephoned the commission’s helpline to discuss the loan.
“However, we have made clear that our helpline provides generic advice.”
The Air Ambulance Service trustees insisted to the watchdog that the loan was in the charity’s best interest, as it helped the charity retain the member of staff concerned.
However, the Charity Commission said, they could not demonstrate that trustees made the decision properly and collectively at the time.
In conclusion, the Charity Commission said trustees were over-reliant on the CEO and their chair.
It said the Air Ambulance Service must:
- ensure it adheres to its charity’s governing document and ensure trustees are involved appropriately in key decisions of the charity.
- the trustees must satisfy themselves as to the exact legal basis for agreeing to the loan.
- the trustees must provide the Charity Commission with a full report detailing the events that led to the failed fundraising event. The trustees must learn the relevant lessons to ensure that any future events are properly managed, events undergo appropriate feasibility scoping, and that proper methodology and skills are in place before the project commences. -review written role descriptions for the chief executive, chair and trustees setting out the distinction between the trustees’ ultimate and collective responsibility for the administration and management of the charity and the CEO’s parameters as an employee
Both incidents happened in 2012 and a spokesman for The Air Ambulance Service (which incorporates The Warwickshire and Northamptonshire Air Ambulance Service) said lessons had been learned.
He said: “In 2012, TAAS purchased seats to resell for the London premiere of The Bodyguard, a method of fundraising used by other UK charities.
“Unfortunately the event was not commercially successful due to poorer than anticipated ticket sales.
“2012 was a record year for fundraising for TAAS and this was the only event not to make a profit.
“TAAS now has in place an experienced fundraising team and robust strategy to ensure each event is profitable in its own right.”
Of the loan, he said: “The loan was a one-off and made to a valuable employee facing unforeseen personal circumstances.
“It was interest-bearing and came with a guarantor so there was no financial risk to the charity.
“We have worked closely with the Charity Commission to ensure governance is tightened and all employees and trustees are fully aware of their roles and responsibilities.”