Out-of-school club provider in cash query
Catherine Gaunt
Tuesday, January 6, 2009
One of the largest out-of-school providers in the country is being investigated by the Charity Commission for an illegal donation to the Labour Party.
A formal inquiry has been opened into Catz Club, whose working name is Schoolfriend etc, which runs hundreds of breakfast, out-of-school and holiday clubs in England, after new evidence came to light regarding a payment of £15,000 made to the Labour Party in 2007, in connection with an event the charity attended.
The charity told the Commission that the Labour Party had characterised £5,000 of this payment as a donation.
Donations to political parties are not permitted under charity law.
The Commission said the discovery of the donation had led to the opening of a statutory inquiry.
This is the second time an illegal donation by Schoolfriend etc to the Labour Party has been discovered by the Commission.
The commission has been looking into the charity since September 2007 in relation to financial management and governance issues, including concerns relating to internal financial controls and overdue submission of accounts.
On 23 December 2008, Catz Club submitted its accounts and its annual return 146 days late. The accounts reveal a loss of £5,656,864 for the financial year ending September 2007.
The report of the trustees said, 'Although the charity has incurred a loss, the chairman is continuing to provide the funding support needed to maintain the financial stability of the organisation. However, following a review of the likelihood of obtaining local or central government funding to support the trustees' aim of opening clubs in rural locations and areas of deprivation, the trustees have had to take the difficult decision to close some clubs that are not financially viable, due to low attendance.'
At the end of September Catz Club was running services for an average of 5,500 children a week.
Last August, the Commission received a complaint from Greg Clark, the Conservative Party's charities minister, about a cash donation of £7,500 accepted by the Labour Party on 27 June (News, 18 September). The charity said the donation was 'an administrative error' made at the same time as another £7,500 payment, which was deemed legal, but asked the Labour Party to return the full £15,000.
