A pay-off of £500,000 to a regeneration boss in Glasgow has been described as "misconduct" and "wholly unsatisfactory" by Scotland's charity watchdog.
Glasgow East Regeneration Agency, which was set up to alleviate poverty, paid the sum in redundancy and pension enhancement to former chief executive Ronnie Saez in 2011.
After press reports of the payment, the Office Of The Scottish Charity Regulator investigated to check if it was in the charity's best interest.
A report published today by the regulator says the actions of the trustees in approving the pay-out "constituted misconduct" and they have been warned about their responsibilities.
Glasgow East Regeneration Agency (GERA) was one of five regeneration organisations set up by the council in the 1990s and had charitable status. In 2011 the five bodies merged into one, Glasgow Regeneration Agency, and GERA was wound up.
The report states trustees of the GERA board – which included councillors Jim Coleman, who was board chairman, the now former councillor Catherine McMaster and East End councillor George Redmond – approved the package.
It included a statutory redundancy payment of about £40,000 and pension contributions of around £200,000, in line with Mr Saez's terms of employment.
However, they also decided to augment his pension pot by an extra 6½ years, which was worth another £232,708 and was paid from the charity's assets.
According to the regulator, the trustees said this was to reward the boss in a similar fashion to senior council officials, even though he was never employed by the council.
Four weeks after the winding up was approved and three days before the winding up date, the board met to agree the enhanced package.
The regulator's report said: "We consider the actions of the charity trustees in this instance constituted misconduct in the administration of the charity.
"However, the payment has already been made and the charity is in the final stages of being dissolved. We find this position wholly unacceptable but, unfortunately, have no powers to recoup the funds for use in the charitable sector.
Mr Coleman, Ms McMaster and Mr Redmond and two others on the board attended the meeting to approve the package. The other three sent apologies, but did not appear to have accessed the agenda sent to them.
However, the regulator said this does not absolve them of responsibility, stating they should still have read their papers and made their opinion known.
John Mason, who referred the complaint to the regulator, said "Even if part of the payment was a binding obligation, the Charity Regulator is clear £232,708 was not a requirement.
"That money should have been helping poorer people, not richer people."