After successive UK charity scandals, who guards the moral guardians?

Bodies set up to do good should themselves be bound by clear moral concepts, writes Damien McElroy

File photo of Justin Forsyth. Bryan R Smith / AFP

The repercussions of the British scandal over the behavioural standards of senior charity workers have gone international. With the resignation of the deputy leader of Unicef, Justin Forsyth, a reshuffle will now take place in staffing one of the biggest UN agencies.

Draw back from the immediate details and there is an issue of principle: bodies set up to do good should themselves be bound by clear moral concepts.

Charities, non-government organisations and even those private firms described as the third sector, fall into this category.

There are obvious restraints on any organisation. Governments are accountable to their citizens according to usually quite clear traditions. Private firms thrive or die on the basis of their reputation.

The third sector groupings have expanded massively for decades, often since the 1960s in the West, with much less defined boundaries. The laws of various lands provide the context for most of their activities but it is undeniable their global footprint is not clearly defined.

Many entities are based in London or New York. Even those that are not registered in those centres are often in practice operated from the cities.

Who guards the moral guardians? From a British vantage point that is the real question to hold in focus.

Distracted by the messy process of Brexit, this is a long overdue debate that Britain appears incapable of handling. Given London's world-leading position as a base for these entities, the country should exercise global leadership through a radical overhaul of its rules and regulations.

Lax supervision of charities results in senior executives with a Narcissus complex harassing junior employees. Or, indeed, totally incongruous situations like front line aid workers putting in eight-hour days before using the evenings and nights for high jinx.

It has also seen movements like the Muslim Brotherhood wantonly exploit the lucrative tax exemptions and special status of charities to further their agenda. Without the British charity scene, the group would not have been able to promote its ideology and establish its influence across a broad global swathe.

Tackling this problem is now a massive challenge. Groups with hidden agendas like the Muslim Brotherhood are deeply embedded at all levels of the charity and voluntary sectors in British society.

The headline-making cases about Muslim Brotherhood-linked charities that funnel aid to boost and sustain extremist groups in war zones are constant. What is publicised is the tip of the iceberg. When extremists are killed on the battlefield or prosecuted in the British courts it is proven charities that have provided access to the region for ISIL or Al Qaeda followers.

A study published last week found that only a quarter of professional auditors that examined problematic accounts had alerted the Charity Commission, as they are required to do by law. Many of the reasons for modifying these accounts relate to poor documentation and an inability to account for the disposal of the charities funds.

Without cooperation and feedback from the accountants, the charities wrongdoing escapes the supervisory net. The idea that this happens in three-quarters of detected cases is mind boggling. And who could quantify how many more undetected abuses exist?

The situation comes amid a fresh row over the Charity Commission’s own leadership. The announcement that a Conservative former cabinet minister Baroness Stowell had been chosen as its chairman has triggered a backlash among MPs scrutinising the appointment.

In a letter warning that they would not support her move into the post, the parliamentarians in effect said the position was too important to be offered out as a political favour. They said the former BBC executive had not displayed the “real insight, knowledge or vision” needed in the job.

As the government pressed ahead regardless, she hinted that she would be more robust, questioning why the commission had not examined Oxfam more rigorously when its troubles happened in 2011.

The charities have until the end of this week to meet another test. If they cannot satisfy the department for international aid that they have now adopted adequate safeguarding standards, they could be blackballed from the contracts that represent their single biggest source of funding.

Withholding power of patronage is the ultimate fall back when things go wrong. After series of scandals among the so-called “aid barons”, a group of private consultancies that grew rich on government contracts, Whitehall banned some of the firms from new bids for up to a year.

All this amounts to a piecemeal and adhoc approach to government spending but wider social concerns.

An active and radical government would go back to the start. Why not set out charters to establish operating standards, clarify a regime of auditing and regulation, plus vigilantly prosecute any wrongdoing?

Ultimately the poorest and most vulnerable would benefit.