Mr. John Farrelly:

I will answer the questions in reverse order. The Charities Act is appropriate legislation which has a built-in review mechanism that comes into play after five years. Having worked HIQA on the regulation of the disability and nursing home sectors, I know that there is always an immense amount of learning when regulation commences - by the people who are regulated, those regulating them and by the law makers - in terms of what is required. Public benefit is important but there is enough in the Charities Act to regulate the charity sector well.

The issue of balance is really important and I tried to make that clear in my presentation. As soon as one mentions regulation, people think of enforcement. The same is true of compliance but people will not be compliant unless they understand clearly what they must do. That is where the guidance comes in. In the voluntary sector, for example, there are very good fund-raising principles in place. We will be looking at adjusting them - because they are built on knowledge within the sector - and formally approving them. We will be building on what is already there. The same is true for governance. There are a lot of good governance codes already in existence but without the regulator's imprimatur, people will not necessarily sign up to them.

On the issue of governance, it would be unfair for people to think that it is only relevant to the charity sector. In the health area, for example, HIQA issued a number of reports on governance in the statutory sector. We reported on governance, leadership issues and the lessons that should have been learned in certain circumstances. In the context of regulation and governance, we must remember that there are so many well-intentioned and well-informed people in the charity sector. There are more of those people than individuals who are not well-intentioned or well-informed. Our aim is to create a State structure to regulate the sector which allows the sector to maintain its softness and to continue to fill the gaps not filled by the State. Having worked in regulation for ten years, I am well aware that one can end up using a certain type of language, much as one tries to soften what one says. It is important to make people aware of that.

Under the Charities Act, it is the trustees of charities who are charged with ensuring that the sector is well governed. The regulatory authority must make sure that those trustees are supported and given enough information to know what is required of them. The Senator is spot on with his comments on the protective elements in the Act. The Title to the Act makes reference to both regulation and protection. We do a huge amount of protective work to which I have not referred today, particularly around section 39 organisations. We have looked after 282 transactions in the past year or so in areas such as pension schemes, fund allocations, appointment of trustees and so forth. All of that type of work goes on in the background.

We need to become an efficient and effective organisation with a good corporate spine. From regulating disability issues in the health sector, I have learned that people queue up for bad news which sells plenty of newspapers. We need to strike a balance, however, by publicising all the good work being done. This will be a major challenge.

On my description of the sector as challenging and congested, I am not necessarily referring to charities because there are many actors involved, for example, strong legal and accountancy professions. Ireland has many charities. I live in Caragh, County Kildare where a charity competes with the GAA and political organisations at the church gate. It is important that fairness apply in the case of registered charities.

Generic competencies are not enough. Specific competencies are required, including data analysis and a knowledge of what one is doing to ensure one does not create a regulatory burden. If the Charities Regulatory Authority is inefficient, charities will provide us with information we do not need. The authority's head of compliance worked previously with the Office of the Comptroller and Auditor General. His accountancy skills add another dimension to the work being done by other staff.

Some of the charities on the register are large and wealthy, which means we need someone who has worked in a large wealth division. A mixture of specific skills is required and the authority must compete with the private sector to attract these skills. Ultimately, however, we need dedicated public servants who buy into the authority's mission and will be determined to implement the Charities Act impartially and fairly.