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Funds concern over Cardiff charity Joshua Foundation Funds concern over Cardiff charity Joshua Foundation
(about 5 hours later)
Concerns have been raised about the way a high-profile Welsh children's charity is being run, a BBC Wales investigation has revealed. Concerns have been raised about the way a high-profile Welsh children's charity is being run, BBC Wales has revealed.
The Joshua Foundation provides holidays and trips for terminally-ill children.The Joshua Foundation provides holidays and trips for terminally-ill children.
But it has owed between £300,000 and £400,000 to HM Revenue and Customs for over-claimed Gift Aid for a decade. But publicly available accounts show the charity has owed between £300,000 and £400,000 to HM Revenue and Customs for over-claimed gift aid for a decade.
The charity says the debt resulted from gift aid mistakenly claimed and it plans to sell off an asset to pay the bill once legal issues are settled.The charity says the debt resulted from gift aid mistakenly claimed and it plans to sell off an asset to pay the bill once legal issues are settled.
BBC Wales understands that this is a restricted asset - donated to the charity specifically to provide holiday homes for terminally-ill children - which the charity's accounts state "cannot be disposed of without court consent".
It has emerged that the charity, which last year had an income of £428,000, was advised by regulatory body the Charity Commission three years ago that it should settle the debt as soon as possible.It has emerged that the charity, which last year had an income of £428,000, was advised by regulatory body the Charity Commission three years ago that it should settle the debt as soon as possible.
The Cardiff-based foundation was set up in September 1998 by Sarah Cornelius-Price, who named it after her son, who was diagnosed with cancer in 1996. He died in December 1998, aged seven.The Cardiff-based foundation was set up in September 1998 by Sarah Cornelius-Price, who named it after her son, who was diagnosed with cancer in 1996. He died in December 1998, aged seven.
She said the charity plans to sell off an asset to pay off the debt. The charity has helped hundreds of sick children and their families, sending them on individual trips and holidays, and holds regular group events such as breakfast with Santa and annual trips to Lapland. BBC Wales has spoken to a number of families who are full of praise for The Joshua Foundation.
BBC Wales understands that this is a restricted asset - donated to the charity specifically to provide holiday homes for terminally-ill children - which the charity's accounts state "cannot be disposed of without court consent". The charity has been associated with a number of beauty pageants such as Miss Wales and Miss Universe and now runs Miss GB International.
The charity has helped hundreds of sick children and their families, sending them on individual trips and holidays, and holds regular group events such as breakfast with Santa, annual trips to Lapland and a Mad Hatter's tea party.
Beauty pageants
The charity also runs a number of beauty pageants.
The HMRC debt has been on the charity's accounts since around 2003/04.
Further concerns have been highlighted about the charity's fundraising ratio and payments made by the charity to the president and her husband as trustees.
Under the gift aid scheme introduced in 1990, charities can claim from HMRC 25p from every pound donated to them, but must provide evidence of donations to qualify for the tax benefit, including donors' personal details, such as their address and postcode.
Martin Price, chair of the Institute of Fundraising Cymru, raised concerns about the Joshua Foundation's debt for gift aid and other issues with the Charity Commission in 2009.
Mr Price said the turnover over the last few years had been around half a million pounds.
"The actual debt to HMRC is a substantial amount. To have built that up, that represents a donation to the charity of well in excess of £1m.
"What it means is that the charity claimed to have had donations from taxpayers for at least £1m, perhaps more, and wasn't able to substantiate that when HMRC came to do an inspection. Because they do, of course, come and inspect to make sure that the funds are being used properly and that claims are legitimate."
Mrs Cornelius-Price told BBC Wales: "We claimed for everything to do with the Oz Experience, our overseas expedition which is still our biggest income generator.
'Last resort'
"And then we were then told that you can't claim on something if someone gets a benefit out of it.
"So because the youngsters get to go to Australia, that meant that every claim we had made in regard to that then became negated."
Mrs Cornelius-Price, who is trained as a lawyer and is a former winner of the Welsh Woman of the Year award, said the charity's subsequent gift aid claims were being retained by HMRC towards offsetting the debt.
She hopes to settle the outstanding debt, which is about £300,000, soon.
"We have an asset which is worth about equal to what the debt is at the moment," she said.
"There are a few more legal issues to deal with but we will be announcing that we will be putting this asset on the market."
The HMRC will not comment on individual cases, but said in a statement, "We work with charities to help them repay funds that are wrongly claimed under gift aid.
"We always look to work with taxpayers, including charities, with time to pay arrangements where it is appropriate. Enforcement action is a last resort."
Meanwhile, accounts show that nearly 60% of Joshua Foundation's income in the year 2010-2011 was spent on the costs of fundraising and running the charity; while 42% was spent on its charitable aims.
Martin Price said: "Looking at the costs of the charity, in the latest set of accounts something like 40% of the income is actually used for charitable purposes, which is a relatively small amount in comparison with other charities."
The Joshua Foundation says this is due to the nature of its Oz Experience, which challenges teenagers to raise funds for the charity in return for taking part in a trip to Australia.
Mrs Cornelius-Price said: "I think [the ratio] is as high as it can be, given that our biggest fundraiser remains the Oz Experience.
"The way the Oz Experience works is that youngsters raise a sum of money to go on a trip and 50% of that pays for the trip and 50% comes to our work.
"So we get 50p in the pound from that project… so we are working to reduce the dominance of the Oz Project."
Mrs Cornelius-Price and her husband have taken salaries for their work for the charity in the past, and over a number of years received payments through Shram Events, a company which they run.Mrs Cornelius-Price and her husband have taken salaries for their work for the charity in the past, and over a number of years received payments through Shram Events, a company which they run.
Accounts for the year 2010-2011 show that Shram Events Limited, registered at the couple's home, received "consultancy fees" of £59,987 from the charity in that year.Accounts for the year 2010-2011 show that Shram Events Limited, registered at the couple's home, received "consultancy fees" of £59,987 from the charity in that year.
Strict conditions
Previous payments were made to the company to the value of £45,491 in 2009-2010, and £22,000 in 2008-2009 - the same year as Sarah Cornelius-Price also received a salary of £15,000 from the charity.Previous payments were made to the company to the value of £45,491 in 2009-2010, and £22,000 in 2008-2009 - the same year as Sarah Cornelius-Price also received a salary of £15,000 from the charity.
Payments to charity trustees are not illegal, but Charity Commission guidelines include strict conditions on how such payments should be handled, and state they should be approved within a charity's constitution.Payments to charity trustees are not illegal, but Charity Commission guidelines include strict conditions on how such payments should be handled, and state they should be approved within a charity's constitution.
Sarah Cornelius-Price told BBC Wales: "Whatever our specific roles were, or are in fact, then it was payment for those services… since we ran our own business and had our own company, we took advice from the charity's accountants and they advised that this was the best way for us to be paid for what we did for the charity."Sarah Cornelius-Price told BBC Wales: "Whatever our specific roles were, or are in fact, then it was payment for those services… since we ran our own business and had our own company, we took advice from the charity's accountants and they advised that this was the best way for us to be paid for what we did for the charity."
She said she had "since learnt that this may not have been the best advice," and that she and her husband were now salaried by the charity once again.She said she had "since learnt that this may not have been the best advice," and that she and her husband were now salaried by the charity once again.
It is understood the Charity Commission advised the charity to look at these payments going forward when they visited them in 2009.It is understood the Charity Commission advised the charity to look at these payments going forward when they visited them in 2009.
The Charity Commission confirmed it had engaged with the Joshua Foundation in 2009 and again in 2010 following concerns raised.The Charity Commission confirmed it had engaged with the Joshua Foundation in 2009 and again in 2010 following concerns raised.
It then contacted the charity in December "for an update" after BBC Wales approached the Charity Commission.It then contacted the charity in December "for an update" after BBC Wales approached the Charity Commission.
A spokeswoman said: "The charity continues to be in contact with HMRC in relation to the debt and plans to be able to realise some assets to reach a final settlement shortly.A spokeswoman said: "The charity continues to be in contact with HMRC in relation to the debt and plans to be able to realise some assets to reach a final settlement shortly.
"They are aware of the need to have a larger trustee body to be able to handle conflicts of interest and have recruited five trustees who include people with experience of legal and accountancy, who will be starting in February.""They are aware of the need to have a larger trustee body to be able to handle conflicts of interest and have recruited five trustees who include people with experience of legal and accountancy, who will be starting in February."
The charity has also recently sold land it owns in Australia which it used for its Oz Experience project.The charity has also recently sold land it owns in Australia which it used for its Oz Experience project.
The charity has said that the proceeds from this will be used to expand its services and create "much needed reserves."The charity has said that the proceeds from this will be used to expand its services and create "much needed reserves."