Concerns over Kids Company management raised as far back as 2002

Concerns about collapsed charity Kids Company were being raised with trustees and regulators over several years, an investigation has found.

The investigation by BBC’s Newsnight and BuzzFeed News uncovered documents raising concerns about the charity’s management dating back to 2002.

The charity’s founder Camila Batmanghelidjh and chairman of trustees Alan Yentob are due to appear before MPs today to answer questions about the way Kids Company was run and how taxpayers’ money was used to support it.

The files uncovered by the Newsnight/Buzzfeed investigation showed that two charities which worked with Kids Company expressed reservations about the way it was managed.

The Pilgrim Trust agreed in January 2001 to fund two employees for two years to work on a specific project at a cost of £30,000 per year but the relationship turned sour.

The documents show Kids Company gave a series of excuses for not supplying the Pilgrim Trust with information, ranging from a “specific learning disability” which prevented Ms Batmanghelidjh from using a computer keyboard, to a bank manager responsible for reproducing withdrawal slips being off sick after “falling off a roof”.

In August 2002, Ms Batmanghelidjh said that £71,390 of income was recorded in the wrong financial year in their accounts “because of the confusion which arose at the time”.

“Our bookkeeper at the time mistakenly recorded some loans as donations,” she said.

Georgina Nayler, director of the Pilgrim Trust, wrote to the Charity Commission on December 6 2002, stating: “In the absence of financial acumen from the director of Kids Company, my colleagues were not convinced that the staff in place at the organisation had sufficient experience or seniority to deal with such complex matters.”

Ms Nayler told Newsnight and BuzzFeed: “Of the £60,000 that was offered by the Pilgrim Trust only £7,500 was paid and the rest withdrawn after Kids Company failed to give us adequate financial information or, indeed, any satisfactory report on how the first instalment of the grant had been spent. I was also concerned about the very large sum of money that appeared in a suspense account in the charity’s accounts which appeared to be owed to HMRC.”

In 2006, another charity, New Philanthropy Capital (NPC) raised other concerns in a private report sent to Kids Company trustees.

The NPC report said: “Many of the commendable aspects of Kids Company are attributable to Camila. Many of the problems though are also attributable to Camila.

“Weak finances, conflicting information about numbers of users, the absence to date of any internal attempt even to track and record results, over-reliance on one member of staff and lack of any strategic planning all threaten its long-run sustainability.”

The report said it was “alarming” that Ms Batmanghelidjh was not “more concerned about sustainable income streams, effectively claiming to muddle through each year”.

Whitehall’s spending watchdog has launched an investigation into Government grants to Kids Company.

The National Audit Office (NAO) inquiry is examining a £3 million taxpayer-funded grant handed by ministers to Kids Company earlier this year against the advice of a senior civil servant, as well as a further £4 million grant made shortly before the charity was shut down in August.

Kids Company is also the subject of a statutory investigation by the Charity Commission and an inquiry by the House of Commons Public Administration and Constitutional Affairs Committee.

Ms Batmanghalidjh and Mr Yentob, a senior BBC executive, will appear before the Commons committee on Thursday.

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