Children's charity Joshua Foundation funding concern

Concerns have been raised about the way a high-profile Welsh children's charity is being run, BBC Wales has revealed.

The Joshua Foundation provides holidays and trips for terminally-ill children.

But publicly available accounts show the charity has owed between £300,000 and £400,000 to HM Revenue and Customs for over-claimed gift aid for a decade.

The charity says the debt resulted from gift aid mistakenly claimed and it plans to sell off an asset to pay the bill once legal issues are settled.

BBC Wales understands that this is a restricted asset - donated to the charity specifically to provide holiday homes for terminally-ill children - which the charity's accounts state "cannot be disposed of without court consent".

It has emerged that the charity, which last year had an income of £428,000, was advised by regulatory body the Charity Commission three years ago that it should settle the debt as soon as possible.

The Cardiff-based foundation was set up in September 1998 by Sarah Cornelius-Price, who named it after her son, who was diagnosed with cancer in 1996. He died in December 1998, aged seven.

The charity has helped hundreds of sick children and their families, sending them on individual trips and holidays, and holds regular group events such as breakfast with Santa and annual trips to Lapland. BBC Wales has spoken to a number of families who are full of praise for The Joshua Foundation.

The charity has been associated with a number of beauty pageants such as Miss Wales and Miss Universe and now runs Miss GB International.

Mrs Cornelius-Price and her husband have taken salaries for their work for the charity in the past, and over a number of years received payments through Shram Events, a company which they run.

Accounts for the year 2010-2011 show that Shram Events Limited, registered at the couple's home, received "consultancy fees" of £59,987 from the charity in that year.

Previous payments were made to the company to the value of £45,491 in 2009-2010, and £22,000 in 2008-2009 - the same year as Sarah Cornelius-Price also received a salary of £15,000 from the charity.

Payments to charity trustees are not illegal, but Charity Commission guidelines include strict conditions on how such payments should be handled, and state they should be approved within a charity's constitution.

Sarah Cornelius-Price told BBC Wales: "Whatever our specific roles were, or are in fact, then it was payment for those services… since we ran our own business and had our own company, we took advice from the charity's accountants and they advised that this was the best way for us to be paid for what we did for the charity."

She said she had "since learnt that this may not have been the best advice," and that she and her husband were now salaried by the charity once again.

It is understood the Charity Commission advised the charity to look at these payments going forward when they visited them in 2009.

The Charity Commission confirmed it had engaged with the Joshua Foundation in 2009 and again in 2010 following concerns raised.

It then contacted the charity in December "for an update" after BBC Wales approached the Charity Commission.

A spokeswoman said: "The charity continues to be in contact with HMRC in relation to the debt and plans to be able to realise some assets to reach a final settlement shortly.

"They are aware of the need to have a larger trustee body to be able to handle conflicts of interest and have recruited five trustees who include people with experience of legal and accountancy, who will be starting in February."

The charity has also recently sold land it owns in Australia which it used for its Oz Experience project.

The charity has said that the proceeds from this will be used to expand its services and create "much needed reserves."