FURTHER evidence has emerged of potential fraud at a charity with close ties to Waltham Forest Council which is being investigated by police.

O-Regen was accused of flawed accounting and providing “fictional figures” by the council months before the charity went into financial meltdown last year, documents released under the Freedom of Information Act show.

A police probe was launched soon after O-Regen entered administration in May following a complaint by Hackney Council.

The charity, which owned community facilities such as the Epicentre in Leytonstone, was handed contracts worth £400,000 by the authority between 2008 and 2010 to help the long-term unemployed.

Despite evidence that the charity failed to fulfil its obligations, it was in July 2010 handed another similar contract worth more £1.1m.

The council soon became concerned about the charity’s performance and an auditor was sent in to investigate.

He found “problems across the board”, including flawed accounting and pre-signed employee time sheets.

The minutes of a meeting between O-Regen bosses and council officers in August 2010 recorded front line charity staff had not been allocated to the project “as made to believe”, but were reporting performance data to other projects.

And at a financial review meeting in January last year the cabinet member responsible for contracts with the charity, Afzal Akram, accused bosses of providing “fictional figures”.

A tense exchange then followed between O-Regen chief executive Julian Martin and Cllr Akram on the issue of “double counting”, a term used when a transaction is registered more than once in accounts.

According to the minutes, Mr Martin appears to brush off the concerns by saying the figures were registered the previous year.

Council officer Kerry Prestidge then asked Mr Martin whether he is concerned about double counting.

His answer has been redacted from the disclosure.

After Cllr Akram demands an action plan detailing how O-Regen will fulfil its obligations, Mr Martin asks for a reassurance that the council and the charity were still a “partnership” and expressed concern about an unspecified “hidden agenda”.

However, Cllr Akram then said he would inform Mr Martin of funding for programmes the following year and offered to be a “facilitator” for possible O-Regen sub-contractors.

The new evidence has been given to police.

A report by the administrator found bailiffs regularly turned up at the charity’s offices and suppliers refused to deal with the organisation in the months before its collapse.

The charity’s board of trustees was chaired by Conservative group leader Matt Davis and included Labour’s Cllr Terry Wheeler and Kevyn Limbajee.

The council and police are yet to comment.