A charitable trust supporting the work of Prince Andrew has been required to return more than £350,000 in payments made to a trustee after a public watchdog intervened.
The Charity Commission has revealed the Prince Andrew Charitable Trust broke the law by handing over large sums to the prince’s household to compensate for time spent on other activities by one of his employees.
The problem emerged last year following publicity over the prince’s interview on BBC Newsnight about his friendship with the disgraced financier and convicted paedophile Jeffrey Epstein. The highly critical report is a further blow to his position.
Examination of the charity’s accounts and records identified “issues of concern that required attention”, according to a lengthy statement by the commission released on Tuesday.
“As a result of this work, £355,297 has been returned to the charity, which will be redistributed towards causes in line with the charity’s purposes. The current trustees acted to rectify this matter once it was identified by the commission.”
The Prince Andrew Charitable Trust – which supported his charitable work in the areas of education, entrepreneurship, science, technology and engineering – has notified the commission that it intends to wind up. Remaining funds will be distributed to charities with similar objectives.
Helen Earner, the commission’s director of operations, said: “Charity is special – with unpaid trusteeship a defining characteristic of the sector. By allowing the payment of a trustee via its subsidiaries the Prince Andrew Charitable Trust breached charity law and by insufficiently managing the resulting conflict of interest from this payment the trustees did not demonstrate the behaviour expected of them.
“We’re glad that concerns we identified are now resolved, after the charity acted quickly and efficiently to rectify these matters. The recovered funds will now go towards the causes intended, and we will continue to work with the trustees as they wind up the charity.”
The trustee was paid by the charity’s three trading subsidiary companies as a director of those companies. The payments were for work carried out for the trading subsidiaries over a five-year period from 2015.
The commission added: “Trustees cannot be paid to act as directors of a subsidiary company, unless there is authority from the charity’s governing document or the payments are authorised by the commission or the court, none of which were in place at the charity.
“Trustees also have a duty to act with reasonable care and skill, taking account of any special knowledge, skill or professional status. This board of trustees, which included a lawyer, was expected to have had the knowledge and experience to act in accordance with charity law.”
The commission said the charity could not “show that conflicts of interest relating to the payments received by a trustee were managed adequately at trustee meetings”.
Other problems identified included that:
There was no standalone conflicts of interest policy at the charity for trustees to refer to.
Open and fair competition was not conducted before the trustee was appointed to the roles at the charity’s subsidiaries.
No evidence was obtained to demonstrate that these payments to the trustee provided value for money for the charity.
The commission’s report has been released amid a war of words between US prosecutors and the prince’s lawyers over his cooperation with the investigation into Epstein’s activities.