Probed housing charity fails to file accounts

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

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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