The Charity Commission has launched an investigation into the finances of a strictly Orthodox charity.

Chessed L’Yisroel Ltd, which operates in Manchester and Salford, aims to promote religious activities in accordance with the Orthodox faith and alleviate poverty.

The independent regulator of charities in England and Wales opened its inquiry last month after uncovering a “significant discrepancy” in the charity’s accounts.

The inquiry, announced this week, will examine the reliability and accuracy of the charity’s financial reporting, while assessing whether funds have been lost, misappropriated or misapplied.

In June the commission announced that it was adding Chessed L’Yisroel to its class inquiry into charities.

This was for failing to file annual returns, reports and accounts with the commission by the due dates over four years. Analysis of bank statements for 2011 revealed a reported income of approximately £140,000 and expenditure of £139,000.

The charity has since resubmitted a conflicting set of accounts for that year which show an income of approximately £632,000 and expenditure of £724,000. The resubmitted accounts contain a qualified audit opinion, which prompted concerns about the charity’s financial affairs.

Chessed L'Yisroel took out a loan for £131,489 the same year. It has not been repaid. The charity has not explained why it did not repay the money or what it did with it.