Rhema Church London Hit by Charity Commission for Massive Mismanagement
The Charity Commission has dropped a bombshell report exposing serious misconduct and bungling at Rhema Church London. The inquiry revealed the charity’s trustees failed spectacularly to protect funds and assets, leading to misuse and financial chaos.
£95,000 Wasted on Unauthorized Overseas Trips
Set up in 1999 to promote Christianity and aid the needy, Rhema Church operated out of Croydon. But the probe uncovered the charity splurged around £95,000 on overseas trips to Italy, Greece, and Austria. These lavish jaunts, led by former pastor Martin Phelps, had no approval or clear charitable purpose.
Personal Expenses Run Wild
Investigators also found the charity footing bills for personal day-to-day expenses. These included food, domestic purchases, medical and vets’ bills, and even gym memberships. With no expense policy or financial controls, charity money was essentially treated as a personal slush fund. The Commission froze Rhema’s bank accounts as early as November 2015 to stop the haemorrhage.
£300,000 Cheques to Pastor Spark Alarm
Further shock: between 2014 and 2015, cheques totaling £300,000 were paid to the former pastor. £225,000 of this was shuffled into his personal account to cover mortgage interest, then returned to the charity—without any guarantees or security. This reckless move put the charity’s assets at huge risk.
Financial Chaos Leads to Tax Bill and Charity Closure
The Commission’s hunt found much of Rhema’s spending was wrongly categorised and lacked proof it served charity aims. This cock-up left the charity with a whopping £543,285.82 tax liability. To make matters worse, Rhema failed to file accounts on time for five years running.
In 2015, the Commission appointed Interim Managers to clean up the mess and took tough action, including disqualifying the ex-pastor from holding any charity role for a decade. They also ordered the sale of three charity-owned properties to help settle debts.
Amy Spiller, Head of Investigations at the Commission, said:
“Trustees must use their charity’s funds to further the charity’s purposes and ensure there are robust financial controls in place to stop the abuse of these funds.
From our investigation it was clear that trustees at Rhema Church London had failed to meet this obligation, leading to significant misuse of funds by a former senior employee. These expenses did not appear to serve any charitable purpose or benefit to the charity’s beneficiaries.
The Interim Managers worked at length to settle the charity’s accounts and I am pleased they were able to recover over £136,000 which could be put to good use at charities with similar purposes.”
With the charity in ruins, the Interim Managers decided to wind it down, settle outstanding debts, and transfer leftover funds to similar local charities. Over £136,000 was recovered and distributed accordingly.
Rhema Church London was officially struck off the charity register on 7th June 2022.
