Inquiry Report: Jobs and Business Glasgow
The Scottish Charity Regulator (OSCR) has published the findings of its inquiry into Jobs and Business Glasgow, Scottish Charity Number SC023930. Jobs and Business Glasgow (JBG) an ‘Arm’s Length External Organisation’ (ALEO). An ALEO is a body that is formally separate from a local authority but subject to its control or influence. JBG is a company of which Glasgow City Council is the sole member.
OSCR opened an inquiry into JBG in December 2015. Our regulatory interest was in whether the charity trustees had met their duties in ensuring there was appropriate financial oversight of the charity, and in making the decision as to whether to repay £4.3 million of funding from two EU funding streams to Glasgow City Council.
We found that sufficient financial controls were not in place around the funding and that this was ultimately the responsibility of the charity trustees. However, we found that when notified of the failure of compliance the charity trustees put in place a number of new controls. We also note that the charity trustees individually believed that they were acting in the best interests of the charity.
We also found that the charity trustees exercised a significant degree of deliberation and challenge around the decision to repay the funding. However, the charity’s meeting minutes do not evidence that they had followed legal advice about dealing with potential conflicts of interest for Glasgow City councillors serving as charity trustees.
In addition we found that constitutional changes made by Glasgow City Council to resolve a quorum issue in the charity had the potential to compromise the independence of the charity trustees’ decision-making process.
Taking into account all these factors OSCR is taking no formal action, but we have highlighted for ALEOs and the charity sector in general some key issues to be aware of. This has been a long-running and complex inquiry, and OSCR has taken on board a number of learning points from it.