A high-profile charity chief executive was suspended from her post amid a row over the body’s finances and attacks on UK welfare policies.

An internal Citizens Advice Scotland (CAS) minute revealed concerns about low reserves in the organisation led by Margaret Lynch and whether ring-fenced funding had been used for a reorganisation.

A board member also said funding could be “jeopardised” by political campaigning and queried the charity’s approach to opposing the UK Government welfare reforms.

CAS is the umbrella body for the 61 member bureaux that provide advice services to over 300,000 people every year.

A sizeable chunk of public funding comes from the UK Government’s Department for Business, Innovation and Skills (DBIS), which provided around £3.4m in 2015.

It emerged last September that Ms Lynch had been suspended. No reason has been given and she has now been off work for around six months.

However, the minutes of a CAS Board of Trustees meeting from April, obtained by the Herald, showed disquiet about the running of the charity.

On finance, a board member raised questions about how funding for the body’s Extra Help Unit and Consumer Futures team was being used:

“William Mitchell stated again his concerns about the CAS recharge to CF and EHU of £760k. He explained that part of these ring fenced monies was being used to fund the reorganisation.

“He was dubious as to whether DBIS knew about this when it was clear from the grant letter that the monies should be ring fenced.”

The minute added: “William Mitchell stated that DBIS have confirmed that core funding is being held at the same level as last year yet the organisation has increased staffing by 25%. The question is who is funding the reorganisation.”

Ms Lynch advised that this question had been “answered before” and explained the link between the funding and the reorganisation of the charity.

However, the minute noted: “William Mitchell doubted this. The £760k came from Consumer Futures and EHU funding which is ring fenced money.”

Three board members, including the chair, also questioned why the charity had only 11 days’ worth of reserves left.

On the political side, the minute noted Mr Mitchell’s contribution as “stating that as a funded organisation CAS must be careful when communicating to the outside world. He cited repeated use of the word “fighting” as an example”.

In response, Ms Lynch said CAS was “very careful” and “never uses the word ‘fighting’ in its communications”.

However, the board member continued: “He [WM] was concerned that if CAS got involved in political campaigning, that our funding might be jeopardised since so much of it comes from Government sources.

“He cited the example of the Strategic Aim which talks about ‘reducing the harmful aspects of welfare reform’ and that some people may not think welfare reform is harmful.”

Ms Lynch, a former SNP candidate, has been vocal in her criticism of the UK Government welfare agenda.

The minute also noted: “The Vice Chair agreed with William Mitchell in that the organisation should be apolitical. He stated that there is a danger of putting the organisations [sic] name to things where there may be a political agenda.”

It continued: “The Vice Chair said that he knew where Willie Mitchell was coming from, and that CAS only ever highlighted the bad – we should not appear to be left or right wing, we should be apolitical.”

The document recorded Ms Lynch saying she was “not happy about wild allegations being bandied about”.

Tory MSP Alex Johnstone said: “I am not surprised these concerns have been raised. A charity funded by the UK Government has been using its resources to oppose UK Government policy.”

A CAS spokesman said the charity had a reputation for working with all parties and both governments.

He said of the financial claims: “The funds designated for consumer landscape changes included allowances for the provision of back office services and premises. This is standard practice in third sector organisations and is detailed in our accounts for 2014/15 which have been approved by both our auditors RSM and by DBIS.”

Ms Lynch said: "I have no comment to make at this time."

A DBIS spokesman said: “This is a matter for CAS. We have received assurance from CAS and their auditors and are content that there is no misuse of public money.”