Probed housing charity fails to file accounts

by Mario Christodoulou

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09 Jul 2009

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The accounts relating to a charity for the homeless that is being investigated by the housing regulator for alleged misuse of public funds within the organisation are now 159 days overdue.

The Novas Scarman Group, is being probed by government watchdog the Tenant Services Authority, which could seize the charity's property.

The authority hired BDO Stoy Hayward to look into the possible misuse of public funds and financial mismanagement.

In a statement the TSA reserved its right to take over properties owned by the charity and hand them on to another landlord. 'Subject to representations, [the TSA] can use its statutory power to direct the NSG to transfer its land to another registered social landlord,' a spokeswoman said. 'However, no decisions have yet been made.'

The late accounts relate to what was The Scarman Trust for 2007/08, in the year before it became part of the Novas Scarman Group early last year. The Charity Commission said it was in the process of removing the trust from its register. An executive summary of the BDO investigation has been circulated on the internet since late June after being leaked to online whistleblower website WikiLeaks.

The report, dated 15 December, 2008, alleges that the company's financial woes are in part the result of financial mismanagement, nepotism and cronyism within the NSG.

NSG rejected the allegations saying in a statement posted on its website: 'This one-sided document contains a number of allegations that have been strenuously disputed by NSG.'

NSG attributed its financial difficulties to plummeting property prices and credit issues. It offered an apology for what it described as 'failure to manage some elements of our finances'.

NSG did not respond to questions by Accountancy Age. BDO said that the report was not leaked by the firm and it was trying to establish how the report got into the public domain. NSG will meet with the TSA later this month.

NSG was formed following the merging of three bodies - The Novas Group, PATH and The Scarman Trust - in early 2008.

The 159-day default period comes on top of a ten-month grace term extended to all registered charities following the end of the financial year.

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