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Michael Wake |
Charity staff’s Far East shopping trips
Visit on expenses to Paris Fashion Week also alleged in inquiry into Arlington House’s Novas Scarman
THE cash-strapped charity which had to bail out of an ambitious project to refurbish the landmark Arlington House hostel spent thousands of pounds on several shopping trips to the Far East searching for oriental art, it has been alleged.
The Novas Scarman Group, which gave up on its attempts to breathe new life into the historic hostel in Camden Town because of a shortage of funds, has been investigated over its financial dealings by the Housing Corporation – nationwide regulators – since October.
Auditors are expected to release their findings next week but a leaked copy of an initial draft seen by the New Journal suggests the validity of spending on foreign trips will be among areas of concerns that will be flagged up.
The expensive business trips, identified by independent auditors BDO Stoy Hayward, are said to have continued while Novas ran out of money needed to complete the refurbishment of Arlington House.
The building was transferred to the One Housing Group at “nil cost” last month, although it has been suggested that its renovation still requires around £8million.
In August last year, a $500 per night “sea villa” at the five-star Pangkor Laut Resort in Malaysia was booked on the charity’s company credit card. The staff member who made the trip has been questioned over why she went.
The draft report said: “On one of her trips, she said she went to buy Thai, Filipino, Indonesian and Malaysian art. It was telling that she could not give us the name of any Thai, Filipino or Indonesian artists during our interview with her.”
Staff from Novas are also known to have attended Paris Fashion Week on company expenses in 2007.
The investigation has pored over the contribution of Michael Wake, the charity’s founder and chief executive who left the organisation in May – a move which all parties insist was not related to the investigation.
A former Arlington House social worker who started up the charity in 1998, Mr Wake accepted an £80,000 redundancy package weeks before Novas issued an “unreserved apology” for its “failure to manage elements of the finances”.
Novas said the management had been “restructured” because it was “too complex and top-heavy”.
The draft findings allege that one staff member was given a redundancy package and then re-recruited a few months later.
The leaked report, dated December 15 2008, outlines a number of concerns relating to Novas’s two major building projects: Arlington House and a £13.8m Contemporary Urban Centre (CUC) in Liverpool.
It is suggested that money raised through the sales of other hostels to St Mungo’s were invested in the project on Merseyside rather than Arlington House, in contrast to what was originally agreed.
In Liverpool, Novas spent £190,000 on antique fittings and £60,000 on an Oriental kitchen bought on one of the trips to Malaysia. Thousands of pounds were also spent on decorative woodwork for the centre and, in a separate building, a £260,000 Chinese theatre was opened in Liverpool – only to close within months of its 2007 opening due to lack of use.
Novas Scarman claimed this week the draft report was “inaccurate and one-sided” adding: “We do not wish to prejudice the inquiry outcome by discussing details until after the TSA [the Tenant Services Authority, a new part of the Housing Corporation] has made its findings.”
Mr Wake was unavailable to comment yesterday (Wednesday). The New Journal tried to ring him and called at his home address.
The group reported operating losses of £2.5million in the 2007/08 financial year, admitting it had been “hit by the fall in property prices and limits to lending at the height of the banking crisis”.
A Novas Scarman spokeswoman said: “The BDO report which has been leaked is an inaccurate and one-sided case for the allegations made about Novas Scarman Group.
“We have provided substantial counter information which our regulator, the TSA has now considered. This is not reflected in leaked version of the BDO report. We have also taken extensive external opinion on key issues which have supported our response.” |
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