A previous version of this article listed the address for Rhema Church London as 'Woodside Green' and included a photo which incorrectly depicted Rhema Christian Ministries. In fact, Rhema Church London is located on Whitehorse Road. We would like to make clear that Rhema Christian Ministries have no relation to this story. We are happy to clarify this and apologise for any confusion caused.
A church spent £95,000 of charitable money on holidays to Greece and Italy, gym memberships and personal purchases.
Rhema Church London on Whitehorse Road in Croydon has had its charity status revoked and a damning report following an investigation has been published today.
An inquiry by the Charity Commission into the church in Croydon, which was established in 1999, 'uncovered that day-to-day living expenses such as food, domestic purchases, medical bills, vets’ 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 clear financial controls.'
During the inquiry, the regulator found evidence that the charity spent approximately £95,000 on trips overseas without any authorisation or clear charitable purpose.
The trips, to locations including Italy, Greece and Austria, were led by former pastor, Martin Phelps, reports My London.
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.'
The inquiry also found that cheques totalling £300,000 had been paid to the charity’s former pastor between 2014 and 2015. £225,000 of the £300,000 had been transferred out of the charity’s account and placed into a personal account to reduce monthly mortgage interest payments before being transferred back to the charity.
The regulator discovered that no guarantee had been obtained or security measures put in place prior to transferring the significant sum, placing the funds at considerable risk.
The regulator’s investigation also found that most of the charity’s spending was incorrectly categorised and lacked sufficient information to prove it was for charitable purposes.
This failure resulted in the charity being liable to pay £543,285.82 in additional taxes. The charity also failed to submit accounts to the Commission on time for five consecutive years.
Due to the serious nature of the concerns, the Commission made use of many of its regulatory powers over the course of the investigation.
In 2015, the regulator appointed Interim Managers (IMs) to address issues uncovered by the inquiry and review the charity’s day-to-day governance, as well as consider its future.
The Commission disqualified the charity’s former pastor from being a trustee and/or holding any office or employment with senior management functions at any charity for 10 years. Rhema Church London was removed from the register of charities on the 7 th June 2022.
Amy Spiller, Head of Investigations at the Commission, 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.
“From our investigation it was clear that trustees at Rhema Church London had failed to meet this obligation, leading to significant misuse of funds by a former senior employee. These expenses did not appear to serve any charitable purpose or benefit to the charity’s beneficiaries.
“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.”
The IMs determined the most appropriate course of action was to wind down the charity, satisfy the charity's creditors and to pass on any surplus funds to a charity with similar objects.
Following the closure of the charity and settling of its finances, the IMs were able to recover £136,760.70 which was distributed to three nearby charities which all held similar charitable purposes.
