A British-based Muslim charity is appealing against the UK aid watchdog's decision to open a new investigation into its affairs.
Muslim Aid is accused of failing to introduce an action plan from a previous investigation which raised concerns over its lack of safeguards to ensure it was not funding terrorist groups.
A Charity Commission report in December 2018 said the way charitable funds were spent could not be accounted for and it placed Muslim Aid under a monitoring procedure.
In September the Commission launched another inquiry into the charity, which Muslim Aid is now appealing.
“I can confirm that the Commission opened an inquiry into Muslim Aid in September 2020, over concerns about the charity’s governance and management, including its failure to fully implement an action plan issued during a previous statutory inquiry,” the Commission told The National.
“The decision to open the inquiry has been appealed and is due to be considered by the Charity Tribunal.”
Previous investigations into Muslim Aid operations
This would be the Commission's third investigation into Muslim Aid.
Despite being under public scrutiny, its latest accounts from 2019 reveal it received more than £2.2 million ($3m) in government grants and contacts that year.
Muslim Aid confirmed it was appealing.
“We continue to actively co-operate with the commission and have asked for the decision to open an inquiry to be reconsidered,” the charity said.
The charity previously told The National it was “working hard to take steps to reverse the weak financial controls and management issues of the past”.
Muslim Aid employs more than 800 staff and its income in 2019 was £30.5m, with £33.1m expenditure.
After a five year investigation, a Commission report in 2018 revealed the charity had failed to carry out proper checks to ensure it was not handing out money to terrorist or extremist organisations.
Former members of the management and staff at Muslim Aid – a group operating across 70 countries – were accused of failing to complete basic due diligence checks to ensure partners and recipients of donations were not on the British government's banned lists.
The Commission concluded there was no evidence of money going to proscribed organisations but said that was down to “good fortune” rather than sound financial practice.
Regulators found Muslim Aid's Sudan branch had bought medicine from a company part-owned by the charity’s former country director, that staff in field offices were lent money without any documentary evidence of repayment and a failure to ensure its logo was not used by other groups to collect money in its name.
Muslim Aid had failed to properly check relevant channels to ensure organisations with which it was dealing were not on banned lists.
The 2018 inquiry report said it was “thereby exposing the charity to the risk of unwittingly funding a proscribed organisation ... this demonstrated a clear lack of prudence”.
Alleged links to Hamas
The findings led to an overhaul of management and a new chief executive, who left last year, was brought in.
The Commission first investigated Muslim Aid in 2010 over claims it was financing a group with alleged links to Hamas.
The regulator found no evidence that it had illegally funded a banned group but was unable to demonstrate conclusively that Muslim Aid followed “its own due diligence and monitoring procedures consistently”.
The charity was set up in the mid-1980s in response to famine in Africa and now runs emergency aid and development operations across Africa, Asia and Europe with 13 operational field offices.
It is involved in vital relief work in places such as Syria and Gaza, as well as helping the Rohingya victims of security forces in Myanmar.
