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Three trustee issued warnings after borrowing £1.9m in poorly documented loans.

18th February 2021

The Charity Commission has issued three individual trustees, from The Bersam Trust, with official warnings after they put the charity at ‘undue risk’ by borrowing £1.9m in inadequately documented loans.

The Bersam Trust’s objects include “providing Jewish Children with a strictly orthodox Jewish religious education”. They pursued this object by leasing a building to an independent Orthodox Jewish faith school and helping support some of their costs.

The Commission opened the enquiry in January 2019, due to concerns about the financial arrangements and governance of the charity. They found that over a four-year period the charity received 56 loans totalling £2.4m. They found that 49 of these loans, accounting for £1.9m, were not documented in a loan agreement. These loans were borrowed by trustees on behalf of the charity often only with an oral agreement. “Whilst there is no evidence money that  was lost by the charity in this way”, the Charity Commission says that this exposed the charity to “significant and unnecessary risk”.

The Commission also found that the charity was failing to reflect the school and itself as separate organisations. For example, one loan was secured on the basis that the school received a good Ofsted report, which the Charity has no control over, and which would have led to a significant financial loss had the school not delivered.   

Other actions that led to the warning included failure to manage conflicts of interests and to follow an action plan to address previous failings that the Commission had identified.

Amy Spiller, Head of the Investigation said, “the trustees of the Bersam Trust failed to ensure [good governance] and indeed, through their lack of financial management and basic governance, agreed a significant number of undocumented loans that risked their charity’s future”.

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