Charity in disarray as treasurer sentenced

Published: 16 Sep 2010 09:300 comments

THE chair of a county charity, recovering from the revelation that its former treasurer embezzled more than £6,000 of the group’s funds, says the scandal should have been uncovered earlier.

Cllr Forrest

Patricia Gordon, while on the committee of Musselburgh East Community Association (MECA), wrote 10 cheques for herself - totalling £6,480 - between April 1, 2007, and January 31, 2008, at its base in Musselburgh East Community Learning Centre, for work she had carried out in the group’s cafe.

Haddington Sheriff Court heard last Wednesday that Mrs Gordon had removed the ‘wages’ section from balance sheets during that time, to cover up the payments. She had been the signatory for the group’s accounts - with her husband, Ian Gordon, as the counter-signatory.

The offence, which Mrs Gordon admitted in court in July, was uncovered after complaints were lodged by members of MECA’s management’s committee.

A joint investigation was carried out by East Lothian Council and the Office of the Scottish Charity Regulator (OSCR) in 2008. The matter was then passed to Lothian and Borders Police.

Mrs Gordon had denied a second charge of embezzling £8,000 between February 1, 2008 and July 31, 2008 and this plea was accepted.

Ian Gordon, former chair of MECA, had faced the same charges as his wife but his not guilty pleas, made in April, were accepted by the Crown.

Mrs Gordon, who was in tears as the court heard details of her offence, was ordered by Sheriff Jamie Gilmour to carry out 135 hours of community service - a sentence that has been slammed by MECA’S current chair, Musselburgh councillor Andy Forrest, as a “total injustice”.

MECA represents between nine and 10 community groups in the Musselburgh East area. In 2005, the charity began operating from the new Musselburgh East Community Learning Centre, a purpose-built facility opened under East Lothian Council’s Public Private Partnership (PPP) initiative.

The centre is managed by Forth Electrical Services Ltd (FES) on behalf of the local authority and MECA arranges for use of the facilities for its various members. MECA also managed the centre’s cafe until Mrs Gordon’s misappropriation of funds emerged and it was returned to FES-control.

Her solicitor, Simon Collins, said that his client, though a volunteer, had “worked for a considerable period of time and devoted a lot of her life to develop the cafe” and other areas of the association.

“When she was treasurer she knew she wasn’t entitled to take a wage,” said Mr Collins.

“But the cafe itself required a lot of input and at times she was working up to 60 hours per week. The difficulty here arises from the fact she continued to be treasurer.

“She paid herself for the work that she did in the cafe on the same rate she would’ve paid anyone else that was doing it.”

The court heard that no other committee member had admitted to knowing Mrs Gordon had been taking money, but she had refuted that.

Said Mr Collins: “There are certain elements that Mrs Gordon doesn’t accept and one of them is that nobody on the committee knew that she was being paid a wage.

“Each of the submitted accounts shows the amount paid per month in wages, apart from the 10 months she was working there. That didn’t go unnoticed and there was a discussion with someone on the committee who said that was the way to go about this.”

And he added: “It’s my experience that her default position is that she doesn’t understand what she did was wrong. She has difficulty expressing it and that’s largely down to her own shame at what has happened.”

When approached by the Courier for comment, Mrs Gordon maintained her innocence, despite her guilty plea, insisting that council officials and committee members had been aware of her siphoning funds from MECA’s accounts as wages for her involvement in the centre’s cafe.

She said: “I took the rap and they all closed their doors to me, the council, the commmittee, after the investigation but they all knew what was going on. I did nothing wrong.

“Andy Forrest and Chic Moohan (committee member) harassed me for nearly two years. I’m not fussed any more, but if they accuse me of anything further I will sue them for defamation of character.”

Mr Forrest - who is also elected ward member for Musselburgh East and Carberry - believes her sentence was too lenient and described her sentence as a “total injustice”.

Mr Forrest, a member of MECA for the past 25 years, had pushed for an investigation into the group’s accounts alongside founding member Chic Moohan, 72.

Mr Moohan was the first to raise concerns over possible misappropriation of funds with OSCR in early 2008, however both he and Mr Forrest say that their concerns were dismissed by fellow MECA trustees when they accused the Gordons of maladministration at meetings.

According to minutes of a committee meeting held in July 2008, Mr Moohan accused the Gordons of failing to comply with OSCR procedures but was informed that, unless he had proof of maladministration, his claims would not be upheld.

Mr Forrest, a previous chair of MECA who re-assumed the position last May, said: “First of all it must be acknowledged that we faced tremendous difficulties in getting an Internal Audit carried out. The fact that the findings of this audit led directly to the recent prosecution prove how necessary and right this was but we had to fight for this to happen.

“For some reason people in positions of power refused to believe that the trustees were not following correct procedures.

“A prime example of money mismanagement was that there were no receipts issued so no paper trail was available of money coming in and going out. Even with limited financial know-how it seemed obvious that this was not correct procedure.

“It is obvious that there should have been alarm bells ringing earlier than they were and by those who had the responsibility to ensure the procedures were followed. Documentary evidence was ignored and those who did raise concerns were treated poorly and told to ‘put up or shut up’.

“If nothing else, this amount of money going missing indicates a serious lack of proper management and should not simply be ignored to prevent public embarassment. As elected officials, we have been placed in a position of trust and we should all live up to that trust or admit any inadequacies or wrong-doing.

“Had the people with the authority to call for an investigation done so at an earlier date there would have been far less money misappropriated. I believe the public have a right to know how this situation was so badly mismanaged and why an investigation had to be forced after a lengthy struggle.”

Two committee members subsequently departed the group when it emerged that the Gordons were being charged, and following Mrs Gordon’s conviction, a third member was told to leave the committee in July by trustees.

On the group’s future, Mr Forrest said: “MECA has, over the last two years, suffered through what can only be described as a traumatic period. The events that have now been dealt with through the judicial system have led to a serious loss of trust and confidence in those in charge of MECA and have caused rifts which must be helped to heal if we are to move forward in a positive way.”

He explained that various measures were being put in place by MECA, including OSCR training for office bearers.

A formal procedure for grant applications has now been put in place, requiring applicants to fill out a document with their details before their request is considered, to ensure a record of distributions.

The charity raises funds through a variety of initiatives, including grant applications to outside bodies, fundraising events and fees paid by community groups that use the Learning Centre facilities.

The cash raised is used to support its members with financial aid and improved equipment when necessary.

Chic Moohan, who attended court to witness Mrs Gordon’s appearance, blasted the community service order as a “mickey mouse sentence”.

However, he added: “This is a good organisation and if we can stick to that belief and sort ourselves out I have every confidence we’ll be able to carry on and get over this.”

The Courier understands that MECA’s current management committee is currently continuing to examine accounts and receipts from recent years. Mr and Mrs Gordon, of Goose Green Place, are no longer involved in MECA.

An East Lothian Council spokeswoman said: “The council’s internal audit team was asked to look at MECA’s accounts following concerns being raised regarding the management of the association’s funds.

“This led to a joint investigation between Internal Audit and OSCR, the findings of which were passed to OSCR and Lothian and Borders Police.

“Thereafter, the matter was subject to a full police investigation. The court has carefully considered this case and taken action and no further council investigation is planned.”

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