An investigation has found the RSPCA breached branch rules after allowing the daughter of its Maidstone chairman to pick up a salary and live rent-free at a converted cattery, while still being registered as a trustee.

The Charity Commission launched a probe after it emerged last year Katie Toms was residing at the property in Headcorn with her family, while earning £18,000 a year as a live-in animal carer.

The watchdog's investigation looked into whether there was a conflict of interest, whether the trustees properly handled such conflicts and whether it had a duty to recover unauthorised benefits received by Ms Toms.

Bosses were content that the purchase of the property in Maidstone Road in 2011 was justified as the branch had a long-term aim of acquiring an animal welfare centre.

However, while it was known the centre would require a live-in manager, no intention had been expressed that Ms Toms, daughter of branch chair Daphne Harris, would be interested in such a position, which had been advertised both internally and externally.

The probe found the charity sought to manage conflicts of interest when Ms Toms applied for the role, as her mother stepped back from any involvement in the recruitment process.

Its national society established a selection panel consisting of the branch treasurer, the RSPCA regional manager and the branch support specialist.

However, the investigation found it had failed to declare Ms Toms' resignation as a trustee in writing before she was offered the cattery manager role in November 2011 - a step which is required for a resignation to be effective under the RSPCA's branch rules.

There was also no record of a resignation or the appointment in the minutes of the trustees’ meetings or AGM and Ms Toms continued to attend trustee meetings.

Furthermore, the annual return submitted to the Charity Commission still listed her as a trustee until September 2013.

The watchdog concluded that steps were taken to manage the conflict of interest, but felt the connection created "a real risk to the perception of independence of the recruitment process" and therefore "jeopardised public confidence in the charity".

The report added that in failing to resign as a trustee, the salary and rent-free accommodation Ms Toms received from her position were in breach of branch rules, which prohibit remuneration of or other material benefit by a committee member.

The commission did say however that Ms Toms would likely be entitled to "an equitable allowance for the benefit received" in exchange for her work as cattery manager.

The investigation also identified failures in the charity’s governance and deemed this should have been of a higher standard given Ms Harris' knowledge and experience.

It found the minutes of trustee meetings and the AGM provided were minimal and did not properly record decisions or appointments made, while the annual reports from the period were also deemed inadequate.

As a consequence, the watchdog has issued formal regulatory advice to the charity’s trustees in the form of a strict action plan, setting out a number of steps which need to be taken to resolve weaknesses in its management and administration and ensure the trustees meet their legal duties.

It has also made clear that trustees failing to comply with the plan could be guilty of misconduct and/or mismanagement and that the commission would likely take further regulatory action.

The Charity Commission's head of regulatory compliance, Tracy Howarth, said: “When donating to charities, the public expect and deserve to have faith that they are run properly and that those in charge take their responsibilities seriously.

"One of the key duties of charity trustees is to manage any situation where a trustee’s personal or professional interests could conflict with their duty to act in the best interest of the charity.

"In this case, we found no evidence that there had been deliberate mismanagement. But we did find concerning gaps in record keeping and shortcomings in the process for appointing the chair’s daughter to a paid position, which also involved purchasing a property at which she would live.

"In charities, good governance and sound processes matter – and where charities do not demonstrate the highest standards of governance, public confidence can be undermined.”

An RSPCA spokesperson said: "The branch trustees have co-operated fully with the Charity Commission and have embraced the recommendations that have been made, many of which have already been implemented.

"The branch trustees, who are all volunteers, acted in good faith and believed that they had followed the proper procedures, but accept that, on this occasion in 2011, they fell short.

"Although we accept the Charity Commission’s findings, we would stress that having a cattery was a ‘long term aim’ for the branch, as the ruling has acknowledged.

"It was built in response to a clear and desperate animal welfare need in the area and following an eight-year search to find suitable premises which fulfilled the strict criteria set by the national society.

"It is a professionally run and successful rehabilitation and rehoming centre, which has helped the branch rehome 1,300 cats, as well as paid towards the vet treatments of 1,600 others."