Charities were today warned to put their books in order for a new law being passed by the Government.
Tighter regulations to be imposed on not-for-profit organisations will make directors and board members more accountable for finances.
Voluntary and community groups and social housing trusts will also have to register with a new regulatory authority under the Charities Bill, which is being reviewed in the Seanad.
Registration to keep charitable status requires handing over sets of financial accounts, the charity’s constitution, and details on how it intends to raise funds.
It is understood the revamped regulations will bring a greater level of transparency to the sector.
BHP Insurances, specialist brokers for the sector, warned liability cover for board members will be critical to protect executives and organisations from exposure to fraud or corporate malpractice.
Homeless agency Focus Ireland said there was no need for charities to fear the new Bill.
“Some smaller charities, in particular, have fears that the new legislation will result in an increase in administration and that they might not have sufficient resources to cope with the new requirements,” said spokesman Roughan McNamara.
“It is important to note that proportionality is a key element of the legislation and there will be varied reporting and audit requirements depending on whether a charity’s income or expenditure exceeds €100,000.”
Mr Roughan said it is important all funders and donors see exactly how and when money is spent.
BHP warned charities to start getting their affairs in order, or risk losing their charitable status making some insurance policies obsolete.
“Both Irish charities and voluntary forums have an excellent reputation, this bill will help ensure that this is maintained,” said managing director Mark Phelan.
“Charities will need to reassess their exposure levels, particularly in regards to ensuring that their insurance policies protect against a broader range of risk, ranging from directors and trustees insurance to developing policies to cover against business interruption, due to a unplanned loss of building or service.
“It is critical to verify the wording on your organisation’s policy covers these eventualities.
“These organisations could also be paying too much for a pre-existing policy that no longer suits their needs. In these challenging times, charities and voluntary forums could risk wasting money and still be exposed due to poor diligence on areas like insurance.”