More charities will be subjected to financial audits while trustees will have to to notify the regulator about significant events under Government plans to increase transparency in the sector.
Minister for Social Protection Heather Humphreys will on Friday unveil new plans which would mean new financial thresholds at which charities must prepare full accounts lowered. There would only be an exception from audits where the balance sheet total does not exceed €10,000, gross income does not exceed €10,000, or that there are no employees.
In comparison, the current criteria for a company to avail of an “audit exemption” is based on fulfilling two out of three of the following criteria: that the balance sheet total does not exceed €4.4 million, that turnover does not exceed €8.8 million and the the number of employees does not exceed 50.
New legislation will also outline plans to increase reporting of risks or significant events in charities. The charities regulator wants to be made aware of any significant events that have caused or could cause a significant risk to a charity.
The measures will be contained in the General Scheme of the Charities (Amendment) Bill 2022. The Heads of Bill were approved by Government this week.
Ms Humphreys said: “Charities throughout the country do fantastic work every day but unfortunately there have been some high profile controversies in the sector in recent years.
“People want to know when they donate to charity that their money is going where it is supposed to and that it is being managed properly and responsibly.
“This Bill strengthens the powers of the Charities Regulator to carry out its functions effectively so that the sector is well regulated and maintains full public trust and confidence.”
Duties of trustees
The Bill will also clarify the general duties of trustees. Minister of State with responsibility for Charities Joe O’Brien said the plans will protect the sector and citizen.
“Proper regulation and guidance to the charities sector, operated independently through the Charities Regulator, protects the sector and gives our citizens the confidence needed to continue to give generously to many worthy charitable causes.
It is important that we strike the right balance between necessary regulation and proportionate governance, ensuring that a reasonable and fair approach is at its core,” he said.
