Bosses at Somerset's St Margaret’s Hospice have welcomed a new charity commission report.
It has found they complied with legal duties when they closed 12 beds at their Yeovil branch and agreed to focus on outpatient care in the area.
The controversial decision led to an investigation into how the closure was reached by the charity, which said it was part of long-term planning.
At the time, when it relocated services to Taunton and cut jobs, it had an almost £1 million surplus.
Bosses were concerned much of that had come from legacies and the total may not have been replicated in following years.
More than 1,300 people joined a campaign against the change and Yeovil MP Marcus Fysh believes many fundraisers had expected money raised locally to be spent in their area.
Jonathan Langdon, chairman of St Margaret’s Hospice Care, said: "We welcome the Charity Commission’s conclusion that our decision to remodel our services was properly made, in accordance with its guidance, and informed by accurate, up-to-date information.
"Following a thorough review, the Commission has found that our board of trustees acted appropriately and followed proper procedures throughout the lengthy consultation and decision-making process which led to the closure of our Yeovil In-patient Unit last year.
"It has also confirmed that the need to remodel our services was not linked to our investment in new commercial ventures.
"We hope these findings will reassure people that this difficult decision was taken after careful consideration, and in the best interests of the long-term future of our charity and the community we serve.
"Our priority remains ensuring a sustainable future for hospice care in Somerset.
"We will continue to use our resources to reach as many people as possible who need our specialist care and support, so they do not have to face a life-limiting illness alone.
"Now this case has concluded, we are focused on rolling out a model of hospice care that is fit for the future.
"This includes investing in expanding our community team in the Yeovil area and our In-patient Unit in Taunton, so that it can accommodate more patients from across Somerset who need this intensive palliative care.
"We are currently recruiting to fill key roles - something we were not able to do until we knew the outcome of the consultation process and had fully explored opportunities for redeployment with all affected staff.
"As St Margaret’s celebrates its 40th anniversary this year, we are working hard to ensure we can meet the rising demand for our care in the years ahead."
The full report can be found here