An independent review, commissioned by Arklet to investigate a number of complaints it had received, concluded that the Association did not comply with the Regulatory Standards of Governance and Financial Management.

The investigation identified a number of serious weaknesses in relation to the procurement and management of certain contracts and the payment of inappropriate benefits.

The review also identified further serious weaknesses in the governance and financial management of Arklet including “a persistent failure to comply with important aspects of its constitutional requirements, poor handling of conflicts of interest, and recording and submitting false information”.

Arklet had recognised that it needed external support to address the serious issues that it faced and it has been supported by two co-optees to its governing body since October 2016. It had also carried out an options appraisal following the departure of its senior officer.

However, the Regulator said the work done since then has demonstrated the extent of the failings of Arklet’s management and governance.

The Regulator added that it decided to intervene to “protect the interests of Arklet’s tenants and other service users” and that the appointments aim to ensure that the Association implements an action plan to meet Regulatory Standards.

Christine Macleod, director of regulation (governance and performance), said: “Our sole objective is to protect the interests of tenants and service users. The governance and financial management weaknesses at Arklet pose a serious risk to these interests.

“We’ve taken this decisive action because our judgement is that Arklet is unable to address the underlying causes of its failure to meet Regulatory Standards without statutory intervention. This is the most proportionate way to protect tenants’ interests, the confidence of public and private funders and the good reputation of registered social landlords.”

Catrina Miller, interim director at Arklet, said: “Arklet is committed to working positively with the Scottish Housing Regulator and their appointed manager to make the improvements required. We are confident that with the appointees assistance we can address these historical issues and once we have worked through our improvement plan we will be in a stronger position in the future.”

The Regulator will continue to engage with Arklet as it works to deliver the improvements needed.