A CHARITY has been given an official warning by regulators over its financial management including diverting cash to help pay for the building of a new £1.3million mosque.

The Islamic Educational Society of Blackburn (IES) was reprimanded by the Charity Commission after a statutory inquiry into its affairs.

The investigation found the society had inadequate financial controls and had repeatedly failed to submit its accounts as required by law.

The probe highlighted the charity’s decision to divert funds towards the building of the Noorul Islam mosque in Audley Range where it is now based.

The Commission says the society, founded in 1969, failed to change its original constitution to allow it to pay towards the construction of the place of worship which opened in July 2010.

It admits its officials failed to respond to a bid by the IES in 2013 to change the governing document but said the onus was on the society to ensure the change was completed.

This month’s ‘official warning’ also reprimands the charity for failing to report a serious safeguarding incident to the commission in January 2018 and for allowing an individual to be in possession of £6,555 in cash belonging to the charity for bank deposit when two people should always be involved in such transactions.

The report said: “The inquiry found that building the mosque, which is a place of worship, does not fall within the scope of the advancement of education and is therefore not within the current objects of the charity. This remains an outstanding regulatory concern which needs to be addressed by the trustees.

“The inquiry concluded there was evidence of misconduct and/or mismanagement in the administration of the charity due to the poor financial management and governance in the charity.”

Amy Spiller, head of investigations team at the Charity Commission said: “By constructing a mosque, these trustees distracted from their original charitable mission and purpose. This was just one symptom of the failings we identified in the running of this charity.

“The trustees have already taken some steps to rectify the mismanagement and taken steps to ensure an adequate safeguarding policy is now in place.

“I am encouraged by these steps towards improvement.”

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A statement from the IES Trustees said: “We have been fully compliant and transparent with the charities commission. We have fully co-operated in the investigation.

“We have taken on board the advice from the commission and will fully implement all the required recommendations.

“We have put stringent actions in place within our organisation to avoid any non-compliance of charity law.”