England & Wales Charity Commission releases result of inquiry into Albayan Education Foundation Limited

Earlier this year, the Charity Commission (the ‘Commission’) released the results of its statutory inquiry into Albayan Education Foundation Limited (the ‘Foundation’).

The inquiry was launched in 2018 in response to persistent failures by the Foundation’s trustees – Janet Laws, Ahmed Abdulhafeth and Ali Qasem – to address governance and management issues, including failures to carry out the regulator’s recommendations. The inquiry concluded that, despite frequent intervention and guidance from the Commission, the trustees failed to discharge their legal duties and there was persistent misconduct and mismanagement, placing the Foundation’s assets and beneficiaries at risk.

There were many wider issues at stake here, but a considerable part of the Commission’s inquiry report is concerned with the Birmingham Muslim School, run by the Foundation, and the trustees’ failure to operate it in accordance with the Independent School Standards.

The Foundation was removed from the register of charities on 21 February 2022 and the Commission has now disqualified its trustees from holding a charity trusteeship or holding a senior charity management position, for a period of twelve years (Laws) and ten years (Abdulhafeth and Qasem) respectively.

The Foundation’s charitable objects were broadly to:

• relieve persons who are in conditions of need or hardship or who are aged or sick;
• advance education by such means as the trustees may consider appropriate; and
  advance such other charitable purposes as the trustees think fit.

Although these are obviously very wide in scope, the Foundation’s primary focus was running the independent Birmingham Muslim School and providing poverty aid overseas.

The Commission first engaged with the Foundation in 2014 as a result of its persistent failure to file annual returns and accounts, and due to concerns over its activity in high-risk areas like Syria. The Commission issued recommendations to the trustees by way of an Action Plan in 2016, requiring the trustees to address governance deficiencies in their record-keeping, risk management, due diligence and monitoring of overseas expenditure. However, these had not been fully complied with when tested by the Commission again in 2018.

In respect of the Birmingham Muslim School, the Commission took into account matters including:

• consistently critical reports following Ofsted inspections;
• five separate directions that were issued to the trustees by the Department for Education (the ‘DfE’) to improve the standard of education, which were not complied with (any attempt to implement the recommendations was “piecemeal”, “inconsistent” and “often at the expense of another legal duty and responsibility”) – the school was eventually de-registered by the DfE on 16 November 2019; and
• the fact that the above directions were not reported to the Commission as serious incidents.

Key lessons for school governors

Obviously, a statutory inquiry into a charitable school is a relatively rare thing. And the circumstances considered here are even rarer; most schools do not sit within a charity that also undertakes entirely separate – and risky – activities overseas. And most are very well run. But still, there are some useful reminders:

• While there are obviously a host of obligations and requirements resting on governors’ shoulders, and those directly relating to education will be front of mind, remember that the Commission is an active regulator and will row in where it sees significant failings, even if those seem not to be directly within its remit. It is not enough that the inspectorates and DfE might also be taking severe action; the Commission will have its say too.
• Registered charities operating schools must remember that certain serious incidents must be reported to the Commission, even if other relevant authorities have already been notified. The Commission’s guidance on this can be found here: https://www.gov.uk/guidance/how-to-report-a-serious-incident-in-your-charity.
• It is always important to get the basics right. Specifically here, to ensure annual returns and accounts are filed with the Commission accurately and within the required timeframe. It was partly a failure to keep up with these basic requirements that first put the Foundation on the Commission’s radar.