The Charity Commission has opened a statutory inquiry into governance and management at the transgender rights charity Mermaids.
The regulator said it was looking into “newly identified issues” found after it started a compliance case into the charity in September.
A statutory inquiry allows the commission to use all its available legal powers.
Mermaids said that an independent report commissioned by the charity this year to look at its internal culture had raised “a number of significant issues for us”.
The charity told Third Sector that this report was separate from another piece of work it commissioned in October to review its trustee recruitment, following revelations that a Mermaids trustee had previously spoken at an event calling for reform of how society views sexual relationships between adults and children.
Mermaids said it would work with the commission “fully, openly and with complete transparency”.
The regulator said in a statement that it opened the statutory inquiry on 28 November. This was three days after Susie Green, Mermaids’ chief executive since 2016, left her position with immediate effect. The charity has not provided any details about why Green left the job.
The commission said in a statement this afternoon that it had “formalised its engagement by opening a statutory inquiry, due to newly-identified issues about the charity’s governance and management”.
It added: “The commission will investigate the regulatory issues to determine whether they indicate serious systemic failing in the charity’s governance and management.
“The trustees have fully cooperated with the regulator’s case, but their response has not provided the necessary reassurance or satisfied the commission at this stage.
“The regulator will seek to determine whether the charity’s governance is appropriate in relation to the activities the charity carries out, which involve vulnerable children and young people as well as their families.”
The inquiry will look at administration, governance and management at the charity, including “its leadership and culture”, as well as whether trustees have complied with their legal duties.
The charity said: “Earlier this year Mermaids decided to carry out a frank and honest appraisal of our internal culture and how we measure up in terms of equity, diversity and inclusion.
“As part of this process, we commissioned an independent external report which highlighted a number of significant challenges for us.
“We know we must do better and we are absolutely committed to doing so, and will be implementing the report’s recommendations as a priority.
“The charity has an unwavering commitment to safeguarding which is, and always will be, our top priority.
“We will continue to cooperate fully, openly and with complete transparency with the Charity Commission as its inquiry gets underway.”
In October the National Lottery Community Fund announced it was “pausing” a grant to Mermaids pending the outcome of the commission’s work.
Mermaids is also waiting to hear the outcome of its legal case challenging the registration of another organisation, the LGB Alliance, as a charity.