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Charities Update: New Investigative Powers for the Charities Regulator

13 July 2016

The Charities Regulator will soon have a range of new powers which it can use for the protection of charities and charitable donations.

Last week, Tánaiste Frances Fitzgerald signed an order bringing into force Part 4 of the Charities Act 2009 (the “Act”) with effect from 5 September 2016, which will give investigative powers to the Charities Regulator. In addition, the Charities Regulator will also have the ability to require charities to hand over documents and the power to search premises, obtain court orders and impose sanctions on charity trustees and charitable organisations.

These enhanced powers are being introduced at a challenging time for the sector. Extra resources and the use of these new powers are expected to result in increased public trust and improved levels of compliance and transparency for the sector overall.

The range and scope of these new powers include:

Power of investigation

The Charities Regulator will be able to appoint inspectors to “investigate the affairs” of a charity. Charity trustees and others who hold information about a charity’s affairs will be required to provide all documents under their control to the inspector. The inspector can also compel them to attend an interview and examine them under oath.

Inspectors will make a report to the Charities Regulator, which may be sent to the Director of Public Prosecutions or to the Revenue Commissioners. The Charities Regulator may also publish the report.

Power to compel production of documents

The Charities Regulator will have the power to compel a charity or its trustees to hand over books, records and documents, if it believes that the charity’s affairs have been conducted with intent to defraud or that its actions or omissions are unlawful.

If a charity or charity trustee does not comply with this requirement, the Charities Regulator or an inspector may apply to the District Court for a warrant to enter premises, search premises and take possession of documents.

Power to impose sanctions

If a charity breaches certain obligations within the Act, such as the requirement to keep proper accounts, or to submit its annual report, the Charities Regulator may impose “intermediate sanctions” including removing a charity from the Charities Register.

Power to apply for a High Court Order

The Charities Regulator may apply to the High Court to suspend or remove charity trustees or staff members and prohibit the removal or sale of charity property. The High Court may grant these Orders if it is satisfied that certain offences have been committed, such as:

  • that charity property is being misused;
  • that a charity trustee or staff member has engaged in misconduct or mismanagement of a charity’s affairs; or
  • that the provisions of the Act are not being adhered to.  

Conclusions

The introduction of Part 4 of the Act is a very positive and welcome step for charity regulation in Ireland.

If you would like further details on these provisions, please contact our Charities & Not-for-Profit team.


The content of this article is provided for information purposes only and does not constitute legal or other advice. 

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