The Charities Bill 2007, highlighting proposed regulation in the Charity Sector, is expected to be put into legislation this autumn. The Bill was first published in March 2006 with a revised Bill being published in April 2007. “The purpose of the Bill is to enact a reform of the law relating to charities in order to ensure accountability and to protect against abuse of charitable status and fraud.” said Conor Woods, Partner, Russell Brennan Keane. “The bill will also provide a definition of ‘charitable purpose’ for the first time in primary legislation.”
The Bill proposes the establishment of a Charities Regulatory Authority and a Charities Register. Woods advises “The objective of the Charity Regulation Authority includes increasing public trust and confidence in charities, promotion of compliance by charity trustees, effective use of resources and accountability.” This Authority will also be responsible for establishing whether organisations are in fact charities and for establishing and maintaining a Register of Charities. All existing charities must register within 6 months of the establishment of the Charities Regulatory Authority.
“The Bill has some rigorous pronouncements that are key to charity trustees” says Woods. “For example, it is the responsibility of the Trustees to ensure proper books and records are maintained, they must also maintain an understanding and explanation for transactions and activities of the charity and they must keep books and records for up to 6 years.”
Charities will be required to file accounts and in some cases will be required to have an audit completed by an independent registered auditor. Currently the threshold for audit requirements is set at €100k, however this could change once the bill becomes legislation.
“In relation to Tax status, the bill clearly states that registration does not affect or make available eligibility of the charity for exemption from tax,” says Woods “this application for tax exemption must be made separately to the Revenue Commissioners.”
Provisions for the preparation and submission of Annual Reports, are also made by the bill, detailing activities in the previous financial year. Woods advises “These reports must contain income and expenditure account and statement of assets and liabilities and also a copy of the auditor’s report, if applicable.”
The Bill also provides guidance on raising funds and fund raising activities for charities and will initiate codes of best practice for raising funds and accounting/recording them.
