It has been discovered that a church spent £95,000 in charitable funds on international travel and gym memberships.
As a report on its spending was published yesterday, Rhema Church in Croydon, south London, had its charitable status withdrawn.
The Charity Commission’s investigation discovered that “day-to-day living expenses” like food, household purchases, medical bills, vet bills, and gym memberships—all of which appeared to be of a personal nature—were claimed and paid out by the charity in the absence of any expense policy or distinct financial controls.”
Trips to locations such as Italy, Greece and Austria were led by former pastor Martin Phelps.
He has since been disqualified from being a trustee any part of senior management functions at any charity for 10 years.
The investigation also uncovered that Mr Phelps had used cheques totalling £300,000 to move money from the charity’s account to his personal one – to reduce monthly mortgage interest payments.
Some £225,000 was transferred back to the charity, but no safety measures were put in place which left the funds at considerable risk.
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Most of the organisation’s spending was incorrectly categorised and lacked sufficient information to prove it was for charitable purposes.
This resulted in it being liable to pay £543,285.82 in additional taxes.
The Commission concluded that the charity’s trustees had ‘failed to fulfil their duties to protect the charity and its assets, and failed to demonstrate any effective oversight of senior staff leading to the serious misconduct and/or mismanagement, including misuse of funds and other assets.’
Rhema Church London was removed from the register of charities on June 7 last year.
Head of investigations Amy Spiller said: ‘Trustees must use their charity’s funds to further the charity’s purposes and ensure there are robust financial controls in place to stop the abuse of these funds.
‘The interim managers worked at length to settle the charity’s accounts and I am pleased they were able to recover over £136,000 which could be put to good use at charities with similar purposes.’