New powers to enable the Charities Regulator to investigate financial mismanagement in charitable organisations will come into effect by early September.

Minister for Justice France Fitzgerald held a meeting with the new Charities Regulator John Farrelly on Thursday to discuss issues arising from the controversy over suicide awareness charity Console.

Sources in the Department of Justice confirmed last night that Part 4 of the Charities Act will commence within two months, giving the regulator new powers of investigation and enforcement.

Restoring trust

This is much earlier than envisaged and reflects concern to introduce measures quickly to restore public confidence in the charity sector.

The Act was passed in 2009 but key sections were never commenced, thus depriving the legislation of any real powers. The recession, and the consequent lack of resources, was the principal reason given by Government for this.

Part 4 dealt with powers of investigation. Another important provision, Part 7, dealt with the manner in which charities raised funds.

That was to deal with, and regulate, controversial practices such as “chugging”(approaching passersby on the street for donations) and charities adding their name to commercial activities, of which they took a tiny split of the proceeds. Part 7 is currently going through a thorough process of consultation.

Scandals

The Act’s ineffectiveness was highlighted by a series of scandals in recent years, over executive pay levels in organisations with charitable status.

The former Independent senator Mary Ann O’Brien also wrote a major report on the legislation, whose conclusions were highly critical of the delays in commencing its key provisions.

There are over 8,000 charities registered. There is a separate bulk registration system for 3,600 schools.

In all, 300 complaints have been received by the regulator’s office since 2014, most in relation to the quality of service provided. The budget for the office has been increased to allow it to increase its staff to 36.

Because Part 4 has yet to be commenced, Mr Farrelly and his staff had to rely on 1963 legislation in order to refer the issues in Console to the Director of Corporate Enforcement.