IN THE wake of a complaint raised by a whistle-blowing trustee, the trustees of the Additional Curates Society have announced that almost £1 million could be distributed directly to PCCs over the next five years to support the cost of ministry in poor and populous parishes.
But the annual report in which the pledge is set out, filed with the Charity Commission last week, also includes the identification by the ACS’s new auditors of “weaknesses in the charity’s internal control environment, including deficiencies in the authorisation of expenditure”, leaving them unable to “obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”.
The firm, Jerroms, writes in the report: “We also encountered missing records and documentation that hindered our ability to verify the completeness of certain income and expenses categories. . . The nature of the anomalies identified, and the ongoing nature of the investigations, have limited our ability to conclude whether material misstatements exist. The potential financial impact of any adjustments that may be required could be material and pervasive to the financial statements.”
The auditors’ statement follows a complaint raised with the Board of the ACS in 2023 by a former trustee, who compiled a dossier raising a series of concerns about the governance of the charity, including the proper use of its funds, which now total £6.6 million (News, 9 May).
This asked questions about expenditure on the charity’s Birmingham properties, valued at more than £1 million, and which comprise the house provided for the General Secretary, Canon Darren Smith, and the ACS offices. Concerns were raised about the financial governance of the charity, listing a lack of annual budget, register of interests, quarterly management of accounts, and monitoring or sign-off of the General Secretary’s expenses and use of the corporate credit card.
“There is no allegation being made of financial impropriety,” the trustee wrote. “However, the absence of basic financial processes would certainly make financial impropriety easier to undertake and harder to detect.”
In last year’s report, the ACS reported that no employee earned £60,000 a year or more, and that the General Secretary’s salary was £54,000. The latest report states that one employee received between £90,000 and £100,000 last year with “aggregate compensation” of £94,680. Other expenditure included money set aside for potential furlough repayment of £89,245. The 2023 dossier had raised concerns about ACS’s compliance with the terms of the Government’s furlough scheme during the pandemic.
In response to the complaint, the ACS appointed new auditors and instructed an independent solicitor to “carry out a comprehensive review of the society’s governance arrangements and to provide wider charity law advice . . . to ensure that the charity has effective processes and internal controls in place to support decision-making in the best interests of the society, in furtherance of its charitable purposes, and in compliance with all legal and regulatory obligations”.
Between 2018 and 2023, the number of grants made for the support of clergy ranged from just one (in 2023, totalling £10,000) to five (in 2018, totalling £49,500). The dossier noted that at no point in the past six financial years had expenditure on supporting clergy posts reached even one tenth of the charity’s total income for the year. In response to questions from the Church Times, the ACS said in May that in the past two months it had greed £243,000 worth of grants to parishes and was “actively encouraging applications”.
The annual report says that the trustees have a “five-year grant allocation programme that could potentially distribute £997,264 directly to Parochial Church Councils to support the cost of ministry in poor and populous parishes. Many of these grants have been awarded to enable dioceses and parishes to recruit clergy and therefore the actual amount given will depend on the success or otherwise of an appointment.”
No new stipend grants were made in 2024, but £98,832 was paid directly to PCCs, up from £91,318 in 2023, but less than expenditure on staff costs of £119,000.
The annual report states that the ACS trustees “had believed that the main emphasis of the Society should be concentrated on the encouragement of vocations within the traditional Catholic constituency and will be considering ways in which this work might be continued in the future.”
Total income for the year was £508,480, down by 26 per cent, but unrestricted donations from supporters increased by 36 per cent to £105,055. Total expenditure for the year was £545,455, up by 26 per cent and included “governance costs” of £60,00 (up from £14,000) including £46,262 in legal fees.
A separate internal investigation is also under way “in relation to certain operational matters,” the annual report says. “As at the date of approval of these financial statements, the outcome of this investigation remains uncertain, and the financial impact, if any, cannot be reliably estimated.”
On Tuesday, a statement from the trustees said that it would be inappropriate to comment further until the independent review was published. They were “committed to responding to any recommendations appropriately and with full transparency” and to “finding ways as to how it can best use the charity’s significant resources, including the provision of grants to parishes, to further the mission of both the Church of England and Church in Wales in the mid twenty-first century”.
Of the nine trustees, four are new, having been appointed in the past nine months. Canon Smith remains the General Secretary. The key risks set out in the latest annual report are a decline in donations and vocations.
