Exclusive: Former BAAF chiefs demand probe into collapse

In a letter to the Charity Commission – seen by CYP Now – Felicity Collier, who was in charge of BAAF between 1995 and 2006, and Barbara Hutchinson, who was interim chief executive for six months last year, highlight a string of concerns about the way in which the organisation went into administration.

“Although we accept that the charity was in a weak financial position, in our opinion more work could have been undertaken to consider alternatives to administration,” the letter states.

“We believe that the way the process has been managed has not only been unethical in some areas, but may not comply with legal requirements.”

BAAF announced it was closing with immediate effect on 31 July due to "significant changes and prevailing economic conditions".

Many of the organisation's functions were transferred to children's charity Coram including a number of government contracts such as the National Adoption Register and the Independent Review Mechanism, which reviews the suitability of prospective adopters or foster parents.

In the letter, Collier and Hutchinson claim that “senior management was effectively excluded from the decision-making process of the organisation” after it emerged, in March this year, that reserves had dropped to £900,000 from £1.8m in March 2014, and the decision was taken to reduce overheads and restructure the organisation.

This, they say, meant the senior managers were not able to comment on financial information presented to the board or make proposals about possible ways of addressing difficulties.

“We believe the decision not to involve these staff directors from London and the four UK country operations, who had effectively managed the charity for many years, was unacceptable,” the letter states.

“Instead, the board relied on a new chief executive (appointed December 2014) with no sector experience, a new treasurer (appointed February 2015) and an external private sector consultant (with no experience of BAAF’s area of work and no, or very limited, experience of charities).

“We understand that only two directors (development and publications), who were to be transferred to Coram, were brought in at a very late stage when the takeover decision had effectively been made. Surely this was a massive failing of trustee responsibilities.”

The letter also cites Charity Commission guidance which states that charities should “communicate with stakeholders or members who may be able to offer help that will enable a charity to get through a period of financial difficulties” and consider launching an “emergency appeal”.

“To the best of our knowledge, none of these options was seriously explored and the director of fundraising, including membership, was not even aware of the situation, and continued to submit and be awarded new project grants,” the letter states.

The letter also claims that, despite the board’s “firm intention to declare insolvency”, staff were “instructed to conduct business as usual as late as 27 July and were indeed accepting payments on 31 July 2015, the day the administrators arrived”.

A Charity Commission spokesman confirmed that the regulator has received the letter and will consider its contents before deciding whether to investigate.

"We are currently assessing whether it leads to any regulatory concerns," the spokesman said. "We will respond in due course."

Details of the letter to the Charity Commission, which was sent on Monday, have emerged amid growing demands for answers over how the charity, which had been running for more than 30 years, folded so quickly.

Last week, Labour’s shadow children’s minister Steve McCabe wrote to children’s minister Edward Timpson calling for an explanation of the circumstances in which the contracts were transferred from BAAF to Coram.

And on Tuesday, Andy Elvin, chief executive of The Adolescent and Children’s Trust (Tact) called on the Charity Commission to investigate the circumstances behind the closures of both BAAF and Kids Company to provide some clarity on the precise reasons, so that charities will be in a position to reassure organisations they are working with.

Matt Dunham, partner at Smith & Williamson, the administrators of BAAF, said: “BAAF has a tremendous reputation within the adoption and fostering world, but has been affected by a perfect storm of adverse issues.

"We have been able to achieve a transfer of many of the charitable purposes to Coram BAAF, a new part of the Coram group of charities.
 
“We are working with the governments in Scotland, Northern Ireland and Wales to achieve a smooth handover of these services to protect children's services. 

"Our priority is to ensure continuity of service and support to protect the needs of children and their families.
 
“Very sadly, as a result of the financial difficulties, there has been no option but for some staff to be made redundant; we will, however, be assisting them in making claims to the National Insurance Fund.”