Check against delivery

　Seanad Commencement Matter

 

Tuesday 5 July 2016

The need for the Minister for Justice and Equality to implement the as yet uncommenced sections of the Charities Act 2009 dealing with regulation and enforcement.

 

Senator Marie Louise O’Donnell

/Senator Michael McDowell

Opening Statement by the Tánaiste and the Minister for Justice and Equality, Frances Fitzgerald TD

 

I would like to thank the Senators for raising this important issue.

 

Needless to say, I am deeply concerned by the recent revelations in regard to Console. I know people rely heavily on its services and I am pleased that the HSE is ensuring continuity of these services.

 

It is essential that all organisations funded by the State are regulated and managed in an appropriate manner. Likewise, all monies donated by the public must be managed appropriately and in line with good corporate governance. Anything less is a betrayal of the goodwill of thousands of people around the country and of the taxpayer.

 

I say ‘betrayal’ because people’s trust has been betrayed. The unwritten agreement between the charity and the people – ie. that the people’s money will be efficiently and appropriately used—has been broken. The betrayal also reaches to the collective trust charities place in one another—to uphold good governance standards and public confidence in the sector.

 

We have had cases like this before, but the details of this case appear to be particularly disturbing. There is a responsibility on many different bodies, on charities themselves and on those who see wrongdoing to report it.

 

For the Government’s part, it is essential we progress the regulatory reforms we have proposed in recent years. As Senators are aware, Part 4 of Charities Act 2009 deals specifically with the Charity Regulator’s investigatory and enforcement functions. Pending the commencement of Part 4, the Regulator had put in place an interim process for the handling of concerns it receives about suspected abuse of charitable status or fraud in charities. However, having been advised by the Regulator on Friday, I can confirm to Senators that today I am signing the necessary Statutory Instrument to commence Part 4, to take effect from 5 September 2016.

 

This commencement date is to allow for the recruitment over the coming weeks of the necessary staffing resources to support these important functions. My officials are also examining the legislation to determine if any other provisions are necessary at this time.

 

The establishment of the Charities Regulatory Authority (’Charities Regulator’) was one of my priorities when I first became Minister for Justice and Equality.

 

It was established as an independent agency on 16 October 2014 under the provisions of the Charities Act 2009.

 

The Act, introduced by the Fianna Fáil-Green Government, provided for the Regulator but its establishment was delayed because of the economic situation.

 

The previous Government and I as Minister, were determined to establish the Regulator to restore confidence in the charities sector after a umber of controversies.

 

Regulating a large, previously unregulated sector is a challenge and the scale of the job is not to be underestimated. However, there has been significant progress.

 

As you will be aware, the aim of the Charities Regulator is to provide for better regulation of charitable organisations through a framework of registration, regulation and support. Importantly, this framework is intended to enhance public confidence for the vast majority of charities who do immense and essential work.

 

The Regulator has a wide range of functions under the Charities Act 2009, which are being introduced on a phased basis, beginning with the compilation of the statutory Register of Charities.

 

The initial priority of the Regulator was on the development of the Register. Charities with tax exemption status from Revenue – some 8,000 in total - were registered on the Register of Charities on the establishment of the Authority.

 

In addition, any charity established before 16 October 2014 and not automatically registered was required to apply directly to the Regulator for inclusion on the Register by 16 April 2016. 1,500 such applications for inclusion on the Register are currently being processed along with a separate bulk registration process for 3,600 schools.

 

The Regulator has undertaken a variety of work since its establishment including establishment of the Register of Charities and a fully online system for registration and annual reporting by charities; communication with the 8,000 CHY charities with tax exemption status regarding the additional information and legal documentation required to support their registered status; development of an online system for organisations to apply for inclusion on the Register of Charities; provision of information to the charities sector on their obligations and duties under the new regulatory regime; and the continuation of services hitherto provided by the Commissioners for Charitable Donations and Bequests for Ireland.

 

In total the Regulator is engaged with in excess of 12,500 charitable organisations. Since its establishment on 16 October 2014 to the close of business last week, the Regulator has received approximately 300 concerns raised against 132 entities, the majority of which were charities. These concerns ranged from issues to do with an organisation’s purpose to the quality of services provided. Often concerns raised with the Charities Regulator are matters to be pursued by other bodies. These concerns relate to approximately 1% of the total number of charities in the country.

 

Many charities are companies limited by guarantee and as such, are also subject to the provisions of company law and are generally required to provide certain information to the Companies Registration Office under the Companies Acts.

 

Such charities are also subject to scrutiny and enforcement by the Office of the Director of Corporate Enforcement.

 

Obviously where allegations of criminal activity such as fraud arise, these are breaches of the criminal law which would potentially be investigated by An Garda Síochána, as I understand is the situation in the case of Console.

 

I welcome the cooperation between the Charities Regulator and other relevant bodies in recent weeks and I can assure the House that the Government is committed to ensuring that the Regulator has the necessary resources available to enable it to fulfil its statutory mandate. Significant additional resources – a budget allocation of €2.665 million representing an 88% increase over 2015 – have been made available to the Regulator in 2016. This includes additional funding of €1.25 million which is supporting an expansion in the level of staffing and other resources.

 

Senators will appreciate these processes are the building blocks necessary to ensure compliance and enforcement powers can be utilised effectively and the range of services to be provided by the Regulator is being developed on an incremental basis.

 

The act of donating to a charity, volunteering for a charity and even setting up a charity, should be valued and promoted. As Sean Moynihan of Alone has said, “when people choose to support a charity they do so because they are inspired by the work it does. People are moved by stories that reach into their hearts and connect with them emotionally....However we also know that we need to link these stories to comprehensive information about where your money goes, the number of people we support and the manner in which we support them. All charities should be judged on their impact and effectiveness, not just on an emotive story; we must value those that have quality standards, are accountable and transparent.”

 

Recent controversies give real pause for thought about the current charity landscape in Ireland. Are clients best served by having large numbers of charities to choose from, each providing similar services and each expected to operate on the basis of proper corporate governance structures? I believe a conversation is needed about how we can best support each and every charity in Ireland, tapping into the vast resources, expertise and experience evident within charities up and down the country.

 

It’s not good enough that people are let down by poor governance standards in parts of the charity sector—especially those charities that receive significant State funding. It lets down the thousands of good people that work in and contribute to the vital services the sector provides. It also undermines confidence in a sector that relies on goodwill. I assure the House that I will prioritise the role of the Charities Regulator, ensuring it has the adequate powers and resources to sustain and the promote the thousands of charities around the country. With the announcement of Part 4 commencing this September, today marks another step forward in the better governance of the sector.

 

ENDS