The Standards in Public Office Commission (SIPO) has called for an "urgent review" on how funding of the country's political parties is monitored as parties are by-passing the current rules.
In its report on donations published today, Sipo said that political parties should publish annual corporate-style accounts to show how much they receive in private donations.
Under the existing system, parties don't have to disclose political donations if they are under €5,079.
Sipo spokesman
However only €140,735 in private funding was declared in 2006 and nine parties including Fianna Fail and the Progressive Democrats made no disclosures at all.
Fine Gael hasn't filed disclosures since 2001.
"In the light of this pattern of disclosure, the legislation governing donations to political parties requires urgent review," said a Sipo spokesman.
Sipo also said it has no way of finding out how political parties funded their 2007 general election campaigns.
"A new approach is required to the funding of political parties, for increased transparency in such funding and for greater scrutiny of political party expenditure."
Sipo called for implementation of Council of Europe recommendations on rules against corruption in the funding of political parties and electoral campaigns.
"Political parties should be required to keep proper income and expenditure accounts detailing all donations and donors of amounts over a certain value should be identified.
"Accounts of political parties should also be presented at least annually to an independent authority." the spokesman added.
Of the four political parties who disclosed donations for 2006, Sinn Féin was the highest at €87,233, the Green Party declared 30,600 euro while the Socialist Party and the Labour Party reported €11,820 and €11,100 respectively.
Last year was the first year in which Fianna Fail declared no private funding while Fine Gael hasn't filed since 2001. The Labour Party produced nil returns in 2004 and 2005 while the Progressive Democrats has had nothing to declare since 2003.
Currently, the maximum value of donations which a political party can accept from the same donor in the same year is €6,348.69.
A previous Sipo report in April showed that donations disclosed by individual TDs, Senators and MEPs for 2006 amounted to €131,923.