Mick Wallace (Wexford, Independent)
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52. To ask the Minister for Rural and Community Development if he is satisfied that the legislation governing the Charities Regulatory Authority is robust with regard to enforcement against certain bodies identifying as charities that may be in breach of the Charities Act 2009; and if he will make a statement on the matter. [1783/18]

Mick Wallace (Wexford, Independent)
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I welcome the Minister on this, his first opportunity to answer questions. This question relates to the Charities Regulatory Authority which I understand is within the Minister's remit. Charities have come under some scrutiny in recent years, but much more transparency and accountability are required. Is the Minister satisfied that the regulator is capable of holding charities to account? I note that section 4 of the Charities Act 2009 which deals with enforcement was finally implemented in September 2016, two years after the Charities Regulatory Authority had been set up. Will the Minister outline the role he envisages the regulator playing and areas of concern he believes need to be addressed?

Seán Kyne (Galway West, Fine Gael)
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The Charities Regulator, the Charities Regulatory Authority, was established on 16 October 2014 pursuant to the Charities Act 2009. Responsibility for the oversight of the regulator transferred to my Department on its establishment in July 2017 and to me in the delegation of functions in September.

The general function of the regulator is to regulate charitable organisations operating in Ireland in order to increase public trust and confidence in their management and administration. Under the Charities Act 2009, the Charities Regulator is fully independent in the performance of its statutory functions. As of the end December 2017, there  were 9,061 charities registered with the authority.

Part 4 of the Charities Act 2009 was commenced in September 2016 and conferred investigative and enforcement powers on the Charities Regulator, complementing its regulatory powers under Part 3 of the Act. Using these powers, the regulator imposed intermediate sanctions on a charity for the first time in January 2017 and secured its first prosecution against a charity in February 2017. Also during 2017, it commenced statutory investigations into a number of charities. The inspector's report on the first of these investigations was published in July 2017, while the remaining investigations are ongoing.

My officials continue to liaise with the Charities Regulator to review the operation of the legislation to ensure it is operating effectively. In early 2017, on foot of public consultation, the regulator proposed amendments to the Charities Act 2009 in order to ensure consistency and fairness in the accounting and reporting obligations of charities. My Department will be working with the Office of the Parliamentary Counsel to progress these amendments.

If anybody, including the Deputy, has concerns that a charitable organisation is in breach of the Charities Act 2009, he or she should forward details of his or her concerns to the Charities Regulator. All concerns expressed to the regulator are actively reviewed.

Mick Wallace (Wexford, Independent)
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We have a serious problem with some organisations that identify as charities when sometimes clearly they are something quite different. Let us take the example of Pobal. It has annual expenditure of more than €450 million. It is a private wing of the Government which was set up to provide administrative services and distribute payments for various Departments. It even states on its website that "Pobal's activities and priorities are shaped by the context and policies laid out in ... the programme for Government". It is registered as a charity and deemed to be a not-for-profit organisation. I do not understand the reason it has been registered as a charity or, for that matter, how it even qualified for charitable status. Perhaps the Minister of State might explain the reason to me. In 2014 an internal audit report in the Department of Children and Youth Affairs expressed concerns about payments made to Pobal to monitor compliance among child care providers. The auditors could not understand the annual fee received of €2.5 million. They also stated the work had been awarded to Pobal without a tendering process which might have been in breach of EU directives, but nothing happened in that regard, which is a little worrying. We need to take a proper and in-depth look at organisations that identify as charities to check to see if they meet the criteria laid down.

Seán Kyne (Galway West, Fine Gael)
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7 o’clock

I thank the Deputy for his comments. Clearly, issues regarding public confidence have arisen in some charities in recent times, as the Deputy rightly stated, but charities do a lot of very important work on behalf of this country. It is only right and proper to ensure they are all acting above board in performing their duties. This is why the legislation was introduced.

The Charities Regulator is independent in the execution of its duties. It would be irresponsible for me to comment on any particular group under investigation or on findings that may arise in that it could prejudice the investigation. Personally, I have not heard of any issues regarding Pobal. If the Deputy has information he would like to share, we would be happy to examine it within the Department.

Before Christmas, I met the Charities Regulator, including the chairman of the board and the three new members appointed to the board. Clearly, they have a roadmap for what they want to do. There has been an increase in the number of groups registered as charities, indicating an increase in compliance. As I stated, 9,061 were registered at the end of 2017. A number of others were registered automatically because they had a valid charitable tax exemption from the Revenue Commissioners. In addition to those, a number of others were registered for the first time, including a number of schools.

Mick Wallace (Wexford, Independent)
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I do not know how Pobal operates. I am wondering whether the Government knows either. Does it offer value for money? An internal document from the Department of Public Expenditure and Reform, dated August 2014, states, "In particular, Pobal has not produced evidence to show how it specifically has promoted social inclusion or countered disadvantage through the implementation of programmes."

On another issue concerning charities, I note the regulator issued guidelines last July regarding internal financial controls that it states will help to maximise value-for-money objectives on behalf of a charity. There is very little reference in the guidelines to salary scales, particularly at CEO level. I am not saying all charities' CEOs are overpaid but, if one examines certain charities, one notes their pay rates for CEOs can be extraordinary when compared with the overall output. The CEO of the Asthma Society of Ireland, for example, was paid €95,000 in 2016 but the organisation's expenditure for that year was only €885,000. Some 33% of its funding came from the Government, yet the CEO was paid more than 10% of all the expenditure. It seems a bit odd. I am not pointing the finger at any charity but just saying this is an area that needs much tighter regulation. We have some serious issues with some of the charities.

Seán Kyne (Galway West, Fine Gael)
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I concur that there has been public concern over the rates of pay for some CEOs in the charity sector. It has caused disquiet over recent years. The regulator regulates in respect of a number of areas. I will confirm its responsibility in regard to rates of pay for the Deputy. The charities have boards of governors and terms and conditions, and they publish their accounts. I know from conversations I have had with the Charities Regulator that it wants to ensure there is a single website and that one can find, in respect of any charity, its number of staff, its expenditure, whether its accounts are up to date and whether everything is correct in terms of corporate governance. It wants a one-stop-shop for all charities that would make the information available to everyone quite easily to ensure we have confidence in all charities across all sectors.

The Deputy mentioned Pobal. There are bodies in the health and education sectors that are registered as charities. Clearly, there are some smaller charities that we do not want to see overly burdened. We want to ensure they can continue to do their work and that people have confidence in them. The regulator is prioritising the larger charities in the initial phases.