Britain's Muslim charity sector is in systemic crisis with leading organisations under scrutiny by regulators over governance and accounting issues.
As Islamic Relief Worldwide is forced to restructure amid revelations about the social media activities of its trustees, one organisation it funded is already under a formal investigation. one organisation it received funding from is already under a formal investigation.
Human Appeal, a charity in Manchester, is under a statutory investigation by the Charity Commission after upheaval in its management team and changes to its accounting practices.
A statutory inquiry is the most serious step the Charity Commission can take against a British registered entity and can lead to an independently led restructuring of its management.
"Our inquiry into Human Appeal is ongoing," the commission told The National.
“The charity submitted a serious incident report, in accordance with best practice, to the commission in December 2017.
"Since then, the commission has met with the trustees on a number of occasions and has been provided with independent reports commissioned by the charity.
“These raise serious concerns about the administration of the charity, including failures to account for the charity’s funds and operate within the charity’s policies and procedures."
It said the investigation would examine the financial controls and management of the charity’s funds.
It would also look into the trustees’ management of relationships and work with others, including donors and organisations, and their due diligence leading up to and during such relationships.
Very large 'in kind' donations not included
The latest accounts for Human Appeal for the year up to December 31, 2017, were filed at Britain's Companies House in February and showed a substantial revision from a draft version sent to the Charity Commission.
The accounts show Human Appeal had put a £30.3 million (Dh147m/$40m) figure on aid shipments from UN bodies, including the World Food Programme (WFP).
By the time the 2017 accounts were submitted, this figure was £3.8m.
Overall, the total income for 2017 was £44,200,742, down from £59,889,361 in the draft version.
"The difference in the figures quoted can be attributed to a very large ‘in kind’ donation from the WFP," a spokeswoman said.
"In the interests of transparency, the document submitted to the Charity Commission in early 2018 included 'in kind' valuations of aid distributed by Human Appeal in partnership with WFP and other UN agencies," Human Appeal told The National.
"It is possible to put an estimated value on ‘in kind’ products but there is no money exchange.
"Prior to finalising the 2017 financial statements, it was decided not to include these ‘in kind’ donations in order to ensure our income was not inflated.
"Human Appeal appointed a number of new trustees who participated in a review of accounting policies, resulting in many of the differences you identify."
As the financial year was closing, Human Appeal suspended its chief executive, Othman Moqbel, who was then dismissed the following year.
Mr Moqbel was at the helm when Human Appeal attracted substantial donations from Qatar Charity, an arm of the Doha government.
Under his leadership, Human Appeal also made grants to organisations that drew regulator concerns, including the Muslim Charities Forum, which was given £163,321 over the period 2014 to 2016£203,157 between 2013 and 2017.
Former British communities secretary Eric Pickles decided the government would withhold funds from the MCF in 2014.
“The Muslim Charities Forum has failed to reassure us that they have robust measures in place to investigate and challenge their members," Mr Pickles said.
"Concerns have also been raised about events held by member organisations, at which individuals with extremist views have been invited to speak."
Another group that underwent restructuring, Muslim Aid, was granted £50,000 by Human Appeal in 2017.
A Charity Commission investigation reporting in December 2018 said it could not account for how charitable funds were spent. It put Muslim Aid under a monitoring procedure.
“Muslim Aid appointed a new board of Trustees and a new chief executive," a statement from Muslim Aid said.
"All have worked hard together to take steps to reverse the weak financial controls and management issues of the past."
New dawn promised after misconduct inquiry launched
A new chapter in Human Appeal's history was promised by Dr Kamil Omoleso in its 2018 annual report.
“In 2018, Human Appeal reported a series of allegations concerning financial governance issues to the Charity Commission," Dr Omoleso wrote.
"Human Appeal’s trustees appointed a leading specialist auditor to investigate.
“Although a thorough verification process affirmed that all funds raised between 2015 to 2018 were spent correctly, upgrades in our internal policies, protocols and processes were recommended by the independent auditor.
"We are deeply sorry to report that every part of our organisation was shaken by the investigation.
“We acknowledge that during a period of fast growth of the organisation, we had not always done enough to ensure that the organisation’s culture and behaviour was fit for purpose.”
The UK Charity Commission launched an inquiry into misconduct at Human Appeal in April 2018, and a criminal inquiry was begun by Greater Manchester Police.
The move followed the emergence of a whistle-blower who had contacted Human Appeal about concerns at the charity in 2017.