A disaffected former trustee of the British Friends of the Hebrew University is calling for the Charity Commission to investigate its handling of millions of pounds worth of donor funds.

Geoffrey Simmonds, who resigned three years ago amid disagreements over the way the Friends was run, claims that the charity has been deducting money for management costs which should be going directly to the Jerusalem-based university.

A chartered accountant, Mr Simmonds has spelt out his concerns in a three-page memorandum, which has been passed to the JC.

Wendy Pollecoff, BFHU executive director, defended the charity’s conduct, saying that the Charity Commission had “raised no queries” over the management levy. She said that Mr Simmonds’s assertions “are inaccurate and a misrepresentation of information available” in the charity’s accounts, in submissions to the Charity Commission, and in answers to his lawyers.

Mr Simmonds is joint executor of the estate of a non-Jewish donor, Millie Carew-Shaw, who died in late 2006, leaving around £5 million to the university. The money was to go towards recruiting top scientists, especially in medical research.

But he said he had been concerned about an item in the charity’s accounts for the year ending September 2006. It recorded that the charity had taken 20 per cent of the income from endowment funds held in the UK to meet administration costs.

If that were to be applied to Mrs Carew-Shaw’s legacy, Mr Simmonds said, it would amount to £60,000 a year. “Any charge on Millie Carew-Shaw’s [fund] is absolutely not appropriate,” he said. “Millie Carew-Shaw never agreed to a management charge in London… If need be, we will go to court to get a ruling.”

He says he has no issue with fees charged on endowment funds by  professional investment managers or deductions by the Hebrew University itself for administration in Jerusalem. But he is adamant that the British Friends should not be taking a cut of endowment-fund income for its own overheads if donors had not agreed to it. “Any administration costs should be covered by general fundraising,” he said.

Mr Simmonds has also queried a transfer of £234,000 in 2006 from the university’s restricted and endowment funds to help cover a shortfall on its general expenditure account.

Three law firms acting for various donors, and briefed by Mr Simmonds, have taken up the question of the management charges. But Ms Pollecoff, in Jerusalem for the start of this week’s board of governors’ meetings, said: “The management charges have been fully disclosed to the Charity Commission, which have raised no queries in relation to the proposed structure, and follow a policy suggested by leading counsel.”

According to a letter seen by the JC, lawyers for the Friends explained that the 20 per cent charge had been to cover a “significant amount of administrative and accounting effort” spent on the funds.

But a new sliding scale of charges would operate, effective from October 2006, ranging from 1.5 per cent on the first £50,000 of a fund’s capital to 0.15 per cent above £1 million.

Ms Pollecoff said that the university was yet to receive the “full amount of the monies” due from Mrs Carew-Shaw’s estate, but if it came to £5 million, the annual management charges would now be £10,050.

She said that of the BFHU’s annual overheads of £600,00 to £700,000, “only approximately £100,000 was raised in the past from the management charge”. Subject to audit, the charity’s income for the year ending September 2007 was £7.8 million. She also pointed out that during his time on the board, Mr Simmonds had been the “only director to request and receive significant compensation for the expenses he incurred in undertaking work on BFHU’s behalf”. She added that the allegations appeared timed to coincide with the unavailability of BFHU staff and trustees, currently in Israel, to respond in any detail. Mr Simmonds denied this.

Mr Simmonds, who remains a governor of the Hebrew University, responded: “I used to receive a contribution for office and secretarial help but I never received personal remuneration.” He added that he had personally helped to finance four legacy tours he had conducted on the Friends’ behalf.

On the question of the £234,00 transfer, Ms Pollecoff explained: “The BFHU has a number of endowment funds that are available for funding the general expenses of the charity. Mr Simmonds was a member of the administration committee, and was fully aware of this and had approved the expenditure of these funds for the purposes of covering the overheads.”

She added: “The £234,000 relates to an adjustment of amounts incorrectly allocated in previous years’ accounts which were identified following an accountant’s review of the charity that I initiated on taking up the post of executive director. This has already been explained to Mr Simmonds in correspondence.”

But Mr Simmonds contended that nothing had been adequately explained “despite several attempts to get answers”.

He has pressed the Charity Commission to review the management-charge policy. “It is untenable and unacceptable that the commission do not look into it more carefully,” he maintained.

A spokesman for the commission said this week that “concerns” had been raised “regarding the charity’s management of its Living Legacy scheme, and the application of endowment funds raised by the charity”.

But the spokesman added: “The level of costs associated with the Living Legacy agreements are a matter for the trustees and any concerns should be raised directly with them, as the commission is not able to act in the administration and management of a charity. We are still considering concerns raised about the content of the Living Legacy agreements.”