Q&A: How are these charity scandals emerging with Charities Regulator in place?

First Console and now St John of God. How are these charity scandals emerging when there is supposed to be a Charities Regulator in place now?

The Charities Act came into being in 2009. So far, up to 8,000 various organisations, big and small, have registered with it. And another 1,500 charities are going through registration at the moment.

The Charities Regulator says it wasn’t aware of any of the antics at Console until it saw the RTÉ Investigations Unit’s Broken Trust programme. The HSE became aware of irregularities at Console when it commenced an audit in April 2015 on foot of concerns raised by the National Office of Suicide Prevention. Its report remains in draft form at present.

St John of God, meanwhile, because it carries out work on behalf of the State, is a section 38 charity governed by a particular set of HSE rules in regards to payment of salaries, and bonus and top-up payments. It emerged last weekend that it had made €1.64m in payments to 14 staff from its own coffers, a move it claims was above board. The HSE, which weren’t aware of it until last Friday, isn’t so certain and is to carry out an investigation.

So, is the Charities Regulator light touch regulation?

Yes and no. The Charities Act 2009, which set it up, hasn’t been implemented in full. Part 4, which gives it the ability to investigate charities following complaints, hasn’t been commenced and neither has Part 6, which governs how charities fund raise and administer corporate governance.

The Government left it toothless despite the furore about Rehab and the CRC a few years back?

The Department of Justice has said that, with the lack of revenue from 2009 onwards, the commencement of Parts 4 and 6 was postponed. After the Console scandal, Justice Minister Frances Fitzgerald is to expedite the process. Parts 4 and 6 should be in place by September.

So what powers does the regulator have now?

When it receive a complaint, and it has received 300 about 130 organisations, it can complete a risk assessment. If it believes the complaint is valid, it can forward the matter to the gardaí, the Director of the Office of Corporate Enforcement, and others. Because Part 4 isn’t in place, the regulator had to use 1963 legislation to refer the Console allegations to the Director of Corporate Enforcement.

What extra powers will the regulator have from September?

An inspector of charities will be hired, as will risk assessor specialists who will work from the office. Ms Fitzgerald held a meeting with Charities Regulator John Farrelly last week to discuss all issues arising from the Console debacle.

And where does David Hall come into all of this?

David Hall and forensic accountant Tom Murray were asked to review the management of Console by its board on the day the RTÉ Investigates programme was broadcast. Mr Hall’s interim report raised serious issues about the control, running, and governance of Console. He took steps to protect the charity, including informing the Charities Regulatory Authority, the Director of Corporate Enforcement, and the Garda Fraud Bureau.

So if Parts 4 and 6 are put in place, should we, at last, have a strong regulatory system for the charity sector in place?

The charities umbrella group Wheel wants more. Its director of advocacy, Ivan Cooper wants all charities to sign up to a governance code, that a set of principles around fundraising be applied to them and wants all financial reporting in the sector to be standardised and a compliance mechanism put in place.

Mr Cooper calls this the “triple lock mechanism” that will ensure public trust in charities.