The Regulator of Social Housing has said that Eldonian Community Based Housing Association is “non-compliant with the Governance and Financial Viability Standard”.

In a full judgement, the RSH said it received a report from the association that showed “the Management Committee did not understand its responsibilities”.

It added that it was “not meeting the regulatory standards, and lacked capacity to address the issues”.

The Regulator also found problems with staffing at a senior level, with the retirement of a CEO and Finance Director, as well as a series of resignations from the Management Committee.

The RSH added: “Through our investigations and information obtained, including our engagement with Eldonian CBHA, we have identified a serious breakdown in the governance, operations and control framework of the provider at the most basic level, which impacts upon the provider’s ability to operate effectively and within vires, potentially putting tenants and social housing at risk.

“Eldonian CBHA subsequently took steps to appoint a number of non-tenant members to the Management Committee, contrary to its constitution.

“As a result of these failures we have concluded that Eldonian CBHA has failed to ensure that its governance arrangements are effective or meet the required outcomes of Governance as set out in the Governance and Financial Viability Standard.

“There are significant weaknesses in the leadership of the organisation both at executive level and within the Management Committee. The executive positions are now being covered by interim officers, and recent attempts to add new independent members to the Management Committee were in breach of the organisation’s rules.

“We therefore lack assurance that Eldonian CBHA is managing its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence, and foresight. We also lack assurance that Eldonian CBHA is adequately managing its financial resources and any potential conflicts of interest.

“Eldonian CBHA did not alert the regulator to the existence of the independent governance report which set out a range of longstanding governance concerns and have failed to take action to implement the recommendations despite having received the final report in October 2020.

“Eldonian CBHA also did not communicate with the regulator about the significant weaknesses in its leadership and management team. This is a fundamental failure of Eldonian CBHA’s governance arrangements and a breach of part 2.7 of the Governance and Financial Viability Standard.

“Eldonian CBHA has now started to assess its current position in respect of compliance against our regulatory standards. It has appointed consultants to senior management positions on an interim basis to take this work forward. Eldonian CBHA has expressed its commitment to working with the regulator to address the issues raised in this notice.

“The regulator will continue to engage with Eldonian CBHA as it seeks to become compliant with the regulatory standards and will consider whether any further regulatory action is required.”