An evangelical church which stages its Sunday services at the Fairfield Halls is under investigation by the Charity Commission over its use of £280,000 of charitable funds.
The charity regulator stepped in three months ago with a statutory inquiry after the church’s auditor qualified its accounts for the year to the end of September 2013. “Qualified accounts” are usually issued when auditors are dissatisfied with the financial records or evidence of how an organisation’s money has been handled.
Last week, the Charity Commission handed the interim management of the church’s affairs to staff from law firm DWF, with instructions to review Rhema’s governance.
In September, the Charity Commission said: “The Commission has been engaging with the charity as part of an operational compliance case since February 2015, after the charity’s auditor qualified its accounts for the year ended September 2013. The accounts and annual return were filed late and the auditor qualified the accounts on the basis that they had been unable to obtain sufficient audit evidence to quantify how much of the expenditure incurred on the charity’s credit cards of £203,707, and petty cash expenditure of £76,161, was incurred in accordance with the fulfilment of its objects. This included £86,055 relating to overseas development workshops. This raises regulatory concerns that charitable funds may have been misapplied.”
Rhema London was founded 25 years ago by a South African couple. According to the Rhema Church’s website, “Pastors Martin and Sandy Phelps were truly sent by God from South Africa to found Rhema Church London in 1991. The hand of God has been the force behind the success of this church as it grows from strength to strength.”
Past accounts have shown that the church, which operates a PO Box in Caterham, has an annual income of nearly £1 million. The church’s 2014 accounts are overdue and yet to be filed.
In a Charity Commission statement last week, it was said that interim managers were appointed to “control of and protect the charity’s assets”. They will also review the church’s internal financial controls and policies, its overseas activities and its arrangements with people working on its behalf.
“The review will also examine whether there has been (and, if so, to what extent) any breach of duty and/or trust by the charity trustees in relation to the operation of the charity, and what steps may be necessary and in the best interests of the charity to regularise any breaches of duty and/or trust,” the Commission said. The interim management will also ensure that the charity’s accounts are filed.
The church’s activities are understood to be continuing as usual, including the well-attended Sunday services at the Fairfield Halls.
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