A SCANDAL-hit charity which was embroiled in a bonus controversy will shut down this month.

Harrow Association of Voluntary Services (HAVS) had limped on for the last five months after an investigation uncovered management failings and secret bonuses handed out to staff.

Harrow Council pulled its funding of the charity, which acts as an umbrella organisation for the voluntary sector in the borough, and this week decided not to reinstate the money.

In light of the news, HAVS board of trustees has opted to wind-up the charity and has issued redundancies notices to staff.

Councillor Bill Stephenson, leader of the council, said it was a “sad day”, but insisted it would give rise to a fresh approach to the voluntary sector.

He said: “This was a difficult decision because HAVS has a long history and track record in the voluntary sector, and a lot of people have put in time and effort.

“It is something really sad but we could get something really positive. We, as a council, remain totally committed to supporting the voluntary sector, and enhancing what HAVS did.”

After the allegations were first reported by this newspaper in July last year, chief executive Julia Smith who had received nearly £30,000 in bonuses and unapproved payments on top of her annual salary, resigned.

Chairman of the trustees Alan Peel resigned in January last year, and his replacement Asoke Dutta also quit in the wake of the scandal.

New trustees were appointed, and a way forward committee – meeting every fortnight – had tried to reform the way the charity was run.

But Cllr Stephenson said concerns continued that the management and finances of the charity are not in order, and also that HAVS only had 200 members out of more than 1,000 third sector organisations across Harrow.

Councillor Susan Hall, leader of the Tory opposition, called for HAVS' abolition in September last year in the wake of the PwC probe, and accused Labour of not acting quickly enough once the allegations had been made.

She said: “Harrow’s voluntary organisations deserve a better run and more transparent representative, which is why the replacement for HAVS must have far tighter financial controls and procedures.

“It is disgraceful that Harrow's Labour administration have let this whole saga drag on for another six months, when they could have dealt with it the instant HAVS’ failings became apparent.

“Instead they made hundreds of voluntary groups wait while they made up their mind.”

Cllr Hall criticised Councillor Rekha Shah, the cabinet member in charge, for “dithering”, and said deputy mayor Councillor Mrinal Choudhury “should be ashamed” for failing to declare being a trustee at the charity until after the scandal broke.

Cllr Choudhury, the treasurer of HAVS for at least two years, has steadfastly refused to discuss the problems at the charity or his role in approving payments which were not properly disclosed to the board of trustees.

Cllr Stephenson said he found some of the revelations which have out “shocking” and said lessons had been learned, but Brendon Hills, corporate director of community and environment services, rejected the accusation that the council had not acted swiftly enough.

He said: “We moved quickly to cut off the funding when the problem arose, we moved quickly to put in place a way forward group, and we have provided a short but reasonable period to work with HAVS to see whether it could be rebuilt as an organisation. “We reach the end of the road today.”

HAVS will formally wind-up at the end of this month, and discussions are already underway to determine what will take its place across the voluntary sector.