The collapse of the Kids Com ny charity was a result of an «extraordinary catalogue of lemons», a committee of MPs has said.
The Commons Public Administration and Constitutional Proceedings Committee ( CAC) also criticised the charity’s trustees and the Charity Commission.
Kids Coterie closed in August after questions over management and finances.
Camila Batmanghelidjh, who ground the charity in 1996, said the report was «a product of bias and rumour».
«The exclusive place we got a rigorous fact-based investigation was with the police,» she divulged, while former trustees condemned the report as inaccurate, unbalanced and weak.
However, Conservative MP Bernard Jenkin, who chairs the committee, told the BBC the cabinet had been «very careful with this report because we knew it was so provocative».
The inquiry had heard «an extraordinary catalogue of failures of governance and control at every square — trustees, auditors, inspectors, regulators and government», he said.
The committee had heard positive accounts of valuable work by Kids Band, and of «inspired and motivated employees», which made the trustee lodge’s failure to ensure the charity’s sustainability «all the more tragic», he declared.
But he added that there had been «a litany of allegations of inappropriate ‘group therapies’, lavish spending and abuse of power within the organisation».
The alms-giving supported deprived and vulnerable inner-city children and young people in London, Liverpool and Bristol.
By Lucy Manning, BBC News special correspondent
The arrive s res no one: Camila Batmanghelidjh, the trustees, government ministers, the auditors and regulators are all criticised.
The weightiest criticism is for the trustees led by the BBC’s Alan Yentob.
He’s described as someone who condoned excess spending and lacked proper attention to his duties. The BBC is also accused of trivial leadership for failing to take action against him when he tried to liberate suggestions about the BBC’s reporting of Kids Com ny.
The report also make outs clear that even without the police investigation that triggered the philanthropy’s collapse, it would have been unlikely to survive due to the trustees’ monetary negligence and Ms Batmanghelidjh’s reluctance to restructure the organisation she founded.
Overall it grasps for very sorry reading about a charity doing some profit work let down by those who ran it, those who were supposed to oversee it and those who kept funding it without achieving proper checks.
Mr Yentob and Ms Batmanghelidjh kept insisting there had been no economic mismanagement. This report makes clear there certainly was.
Newsnight’s Chris Cook pores floor MPs’ verdict
While the committee’s report said ultimate responsibility for the consideration’s closure was on its «negligent» trustees, the government and regulators must also learn exemplars from its failure.
It was unacceptable that successive ministers appeared to put out funds to the charity «on the basis of little more than their relationship with a charismatic bandmaster, small-scale studies and anecdotes», it said.
The committee utters such an approach was an unjustifiable way to conduct government business and to handle consumers money.
Ms Batmanghelidjh and Kids Com ny «appeared to captivate some of the most elder political figures in the land, by the force of the chief executive’s personality as much as by the whirl and profile she generated for the charity», the report added.
The committee also highlighted «rare accounts of luxury items and holidays or s days being lavished on ‘Camila’s kids’, a chosen group of clients».
Temperate minister Oliver Letwin appeared before the committee in November to resolve why he overruled civil service objections to y a £3m grant to Kids Com ny justified days before it collapsed.
Speaking after the committee’s report was put, he said he believed it was «the right thing to do to give this charity one stay chance to restructure».
He said the government would be reviewing its grant-giving dispose of «in light of what we now know about Kids Com ny».
«By updating the dispose of by which grants are awarded we will make sure the most unchanging, most effective charities receive tax yer funds,» he prognosticated.
Kids Com ny timeline of events
June 2015: Touches raised by the Cabinet Office about Kids Com ny’s request for a £3m management grant, but ministers approve the funding
July 2015: Ms Batmanghelidjh be on ones guards down, denying the charity has been mismanaged. The Met Police launches an interrogation into allegations of failings and abuse linked to the charity.
August 2015: Helps say they want to recover the government grant. The charity closes. Ms Batmanghelidjh publishes the BBC that Kids Com ny was subjected to a «trial by media»
October 2015: Ms Batmanghelidjh and Kids Business chairman Alan Yentob (at the time also a BBC executive) appear formerly the Commons Public Administration Committee and again deny the charity was unsuccessfully run. The National Audit Office says the charity received at least £46m of every Tom money despite repeated concerns over its management
January 2016: The Met Constabulary says it has concluded its investigation into allegations against the charity, and concluded there is no signify of criminality
What went wrong?
The report also said the com ssion’s board of trustees ignored repeated warnings about the charity’s economic health throughout its 19-year existence.
It also failed to provide nutty evidence of the charity’s outcomes, or address increasing concerns about its set ups and behaviour of staff, it said.
The trustees’ negligent financial management was last analysis responsible for the charity’s inability to survive, and its closure left many helpless beneficiaries without support, it concluded.
‘Profile too limited’
The Metropolitan The cops last week announced they had found no evidence of criminality after exploring allegations of physical and sexual abuse at the charity. Kids Com ny had often denied the claims.
And the CAC also called on the Charity Commission to open its profile so as to provide a more visible outlet for people to raise involved withs with.
«The commission projects too limited a public profile to provide much reassurance yon charities and their regulation, and to attract complaints,» the report disclosed.
Camila’s Kids Com ny: The Inside Story will be broadcast on BBC One at 21:00 GMT on Wednesday 3 February, and on BBC Two in Wales.