Minsters say enough is enough and order governance review at top Scottish charity
Government cash is to be withheld from an embattled charity until a probe is undertaken into the way it is run.
A leaked letter reveals that Citizens Advice Scotland (CAS) will have UK government cash restricted until it gets its house in order.
Last week the charity announced it was to undertake a governance review after treasurer Stephen Brown resigned.
But the charity failed to reveal that this had been forced on it by its major funder – the UK government’s Department for Business Innovation & Skills (DBIS).
Brown left less than four hours into the role after being exposed by a national paper for calling himself "Lord of Glencoe” after buying a heraldic title.
His resignation came on top of chief executive Margaret Lynch being sacked this month after being suspended back in October and John Dye, head of finance, resigning last month.
Some £2.9m a year unrestricted funding is given to CAS by the DBIS while £4.5m is given for consumer advice and advocacy.
We have concerns the current constitution of the Board and its relationship with the executive functions are a barrier to effective scrutiny
In the leaked letter Caroline Normand from DBIS said to chair Dominic Notarangelo: “Following the recent dismissal of the chief executive, and the recent departure of the CAS finance director, the department has considered whether CAS currently has the correct governance environment to support propriety and proper use of public funds.
“In particular we have concerns that the current constitution of the board and its relationship with the executive functions are a barrier to effective scrutiny and oversight of the funding BIS provides to CAS.”
Normand said she wants to see an independent governance audit undertaken to prove the board is able to lead the organisation as well as a number of other recommendations she says will aid transparency at the organisation.
Funding, she said, would be handed for six months initially with the remainder of the year’s funding withheld subject to the “delivery plan”.
It is believed Margaret Lynch was dismissed by CAS over expenses claims. The board was also uneasy about the way she criticised the Uk government over its welfare reform agenda.
It is not known why finance director John Dye resigned.
A CAS spokesperson said: "CAS, UK and Scottish Governments have been working together for some time to develop a course of action that will improve accountability, transparency and effectiveness at one of Scotland's largest charities.
"There is an appetite for change at CAS and member bureaux, and the assistance of UK and Scottish governments is welcomed...We will work with the UK and Scottish Governments to give Citizens Advice Scotland a strong and certain future."