Martin Heydon (Kildare South, Fine Gael)
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Question 306: To ask the Minister for Jobs, Enterprise and Innovation the plans in place to ensure that smaller charities are not required to incur the expense involved in carrying out full financial audits. [5576/12]

Richard Bruton (Dublin North Central, Fine Gael)
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Entities with charitable status are governed by the Charities Act 2009 under the aegis of the Minister for Justice and Equality and are answerable to their stakeholders, shareholders and funders.

Many charities which formed themselves as companies have done so as companies limited by guarantee (CLG). Due to their public membership structure they cannot avail of an audit exemption.

The Company Law Review Group (CLRG) 2009 Report examined the issue of extending audit exemption to companies limited by guarantee. It made the following recommendations:

"(i) Subject in each case to consultation with the Minister for Community, Rural and Gaeltacht Affairs and the charities regulator, the audit exemption regime contained in Part III of the 1999 (No. 2) Act be extended to such class or classes of CLG which are charitable organisations (within the meaning of the Charities Act 2009) so as to bring them into alignment with charitable organisations that are not companies, provided that 10% of the members with voting rights should be able to require an audit.

(ii) The audit exemption regime contained in Part III of the 1999 (No. 2) Act be extended to all CLGs which are not charitable organisations, subject to a veto right, by any one member of the company, and further subject to the requirement that audit exemption in respect of the following year, shall be an item on the agenda of the annual general meeting."

The recommendations of the CLRG in this matter will be considered in the context of the next appropriate legislative vehicle. The CLRG recommendations contemplate that any proposals in this matter will be subject to consultation with the Department of Justice and Equality which now has responsibility for charities regulation.