Established 2005 Registered Charity No. 1110656

Scottish Charity Register No. SC043760

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Goings on at Novas

September 26 2009
The Novas Group is exonerated but not off the hook One of London's largest homeless charities is continuing to make headlines with allegations of budget-breaking shopping trips and improper relationships, despite official attempts to keep them hushed. The recently-published Tenant Service Authority (TSA) investigation into financial mismanagement of Novas Scarman concluded "serious failures‚Äö?Ñ?? within the organisation were a collective executive responsibility. The homeless charity is still plagued by scandal despite the report letting specific individuals off the hook. As money for refurbishment of Novas's flagship hostel, Arlington House in Camden, dried up, former chief executive Michael Wake travelled around the world with female colleagues spending thousands of taxpayer pounds on Asian art, a leaked draft report claimed. Despite independent auditors, BDO Stoy Haywards, handing the results of their nine-month investigation into the financial management of Novas to the TSA in June, the TSA decided against publishing the damning report, despite Freedom of Information requests that it be made public. A copy of the executive summary still found its way into press hands. It stated the charity's monies had "deliberately been hidden from central and local government and Novas' regulator‚Äö?Ñ?? and they were "many substantial and irregular payments and or subsidies to executives and staff, from corporate credit cards to expensive art purchases‚Äö?Ñ??. While the desperately-needed refurbishment of Arlington House ground to a halt, Wake, 48, traveled in style on expenses. He and fellow director Edwina A-Ghafar, 33, stayed in a $500 per night "sea villa‚Äö?Ñ?? at the five-star Pangkor Laut Resort. The pair spent thousands of taxpayer's pounds on art for the organisation's ¬¨¬£13.8 Contemporary Urban Centre in Liverpool from Malaysia. He later promoted A-Ghafar to art director, a move the report suggests had more to do with their relationship than her suitability for the job. Staff trips to Paris Fashion week in 2007 on expenses and the re-hiring of a recently -redundant staff member were also on a list of money-wasting activities. Novas described the leaked allegations as "wild, unsubstantiated and, in some instances, ridiculous‚Äö?Ñ??. In what became quite a public spat, Novas claimed: "BDO highlighted personal relationships which were irrelevant to the financial issues facing NSG. We consider much of their report, produced at substantial cost to the public purse, to be unprofessional in the extreme.‚Äö?Ñ?? A more moderate TSA concluded: "the inquiry report disclosed insufficient evidence to support a finding of misconduct in relation to any individual, despite the finding of a collective failure of management.‚Äö?Ñ?? TSA chief executive Peter Marsh said: "This inquiry has identified serious failures by the Board and senior management in the running of the Novas Scarman Group. This mismanagement meant that Novas Scarman was unable to complete a flagship hostel redevelopment programme and the organisation's viability and reputation was put at risk.‚Äö?Ñ?? The charity is not off the hook, though. Condemnations from former staff members still beleaguer the organisation, raising concern about the conditions in the recently sold Arlington House. In a letter to the Camden New Journal, a former staff member wrote: "Most of the men have now moved into new rooms in the partly renovated building but they are more isolated than ever.‚Äö?Ñ?? A former senior employee added: "I can confirm that the BDO report is entirely accurate and has uncovered many of the failings and dynamics of this corrupt organisation.‚Äö?Ñ?? While denying the more salacious charges, Novas said it ‚Äö?Ñ??apologise[s] unreservedly for failure to manage some elements of our finances and have since focused on and delivered significant improvements‚Äö?Ñ?? and insist changes have been made. Wake, who founded Novas Scarman in 1998, left with an ¬¨¬£80,000 pay-off in February. A spokesperson said: "We now have a chief executive in charge of the entire organisation and we have strengthened our board, executive and financial management team.‚Äö?Ñ?? One Housing Group took over Arlington House, Europe's biggest 'wet' hostel, on 15th June but daily services are still provided by Novas. They were unavailable to provide information about specific improvements made, though a statement stressed that the organisaiton was no longer in debt and that it is hoped refurbishments will be complete by the end of the year. * To read more from the inside of Novas go to a blog on the matter: