London drama school investigated by charity regulator

The Charity Commission has opened a statutory inquiry into a North London drama school after its failed to comply with an official warning.

Kogan Academy of Dramatic Arts (KADA) has not filed accounts due for three financial years (2019-20, 2020-21 and 2021-22), with the oldest now 820 days outstanding.

Its most recently available accounts, for financial year 2018-19, were filed 653 days late and showed a total income of £190,857 and total expenditure of £327,792.

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In March, the Charity Commission issued an official warning, requiring the charity to file its overdue annual accounting information within two months.

It also advised the drama school to have the “correct” number of trustees in place – requesting three, rather than an existing one.

The charity watchdog says it had seen no indication KADA intends to follow the instructions set out in its warning, so it has escalated its engagement with the drama school to a statutory inquiry.

The inquiry will examine the extent to which any failings in the administration of the charity are a result of misconduct or mismanagement.

It will also look into whether trustees are complying with their legal duties in respect of their governance and management of the charity, with particular regard to their accounting and reporting responsibilities.

It will also assess the future viability of the charity and has the option of expanding the scope of the inquiry if additional regulatory issues emerge.

A report detailing the findings of the inquiry and any actions taken will be published once it is concluded.

‘Significant governance issues’

In the report for financial year ending July 2019, submitted in January 2022, independent examiner Asim Manzoor said there is reason to believe accounting records at the drama school have not been kept in line with the Companies Act 2006.

“We have relied on bank records to produce the accounts and are unable to determine balances owed as at the 31 July 2019 with any certainty,” Manzoor wrote.

“We are unable to agree payments made to the Head of School of £50,015. We are unable to reconcile student income in accordance with the SORP of recommended practice 

“There has been significant governance issues due to lack of trustees with sufficient oversight associated this charity and there remains an issue regarding the replacement of trustees who have left. 

“The charity owes a significant amount as a result of an onerous operating lease for the premises it occupies and unless this is surrendered successfully it will not be able to continue. 

“Currently this stands at £197,000 of 1 Feb 2022 and loans owed to HSBC as at the balance sheet year end amounts to £73,000.”

The end of year report shows the drama school had four trustees at the end of July 2019. As of January 2022, the drama school's lone trustee, Alexander Dower, added a special note to the report in light of its late submission, stating the academy's current position was “seriously impacted” by lockdowns and the pandemic.

“Because the future was so uncertain we did not advertise for or take on students for the new academic years 2020-21 or 2021-22. The academy finances were so badly affected that we did not know whether we would be able to complete incoming students' education, especially if new lockdowns were imposed,” Dower added.

He added at the time, the drama school was “reviewing options for keeping the academy open and building on our long history and success”.

KADA was registered in 1992 and offers acting and directing courses for adults. Formerly known as The School of the Science of Acting, it is now named after its founder Sam Kogan.