The principal primary legislation governing the operation of charities in Ireland is the Charities Act 2009, which provides for a definition of charities, their operation and reporting requirements, and also the establishment of the Charities Regulatory Authority. Responsibility for governance of the Regulator is under the Department of Rural and Community Development.
Higher Education Institutions (HEIs) are entitled to register as charities, as are third level foundations (philanthropic / fundraising agencies). However, third level foundations who obtain charitable status are not currently required to submit statements of accounts to the Regulator. Furthermore, third level foundations do not come under the remit of the Office of the Comptroller and Auditor General either. This issue was raised previously by the Public Accounts Committee.
Certain sections of the Charities Act do not currently apply to a charity that is an ‘education body’ and foundations are currently covered by paragraph (g) of that definition.
The Department of Rural and Community Development is currently progressing the ‘Charities (Amendment) Bill 2023’ and published a general scheme in May 2023. Under the explanatory note of ‘HEAD 3: Amendment of section 3 of the Act of 2009’ of the general scheme it notes:
At present bodies that raise funds for institutions of higher education are exempt from a number of key provisions of the Charities Act 2009 as they fall within the definition of “education body”. Funding bodies such as university foundations are exempt from having to prepare and submit annual statements of accounts to the Charities Regulator under section 48 and are also exempt from the requirement to have their financial statements audited under section 50. However, unlike institutions of higher education, such foundations are not subject to statutory audit by the Comptroller and Auditor General. The proposed deletion of paragraph (g) of the definition of “education body” provided for in Head 3(d) is intended to bring such funding bodies within the full remit of the Charities Act 2009 so that there is greater transparency and accountability in relation to their finances and activities.
Whilst this is a matter for the Oireachtas during the parliamentary stages of the Bill, I welcome both the Charities (Amendment) Bill 2022 and the provision contained within it to remove bodies established for the purposes of funding institutions of higher education from the definition of "education body". This is in accordance with good governance and accountability standards particularly given that there can be significant sums of money raised through these foundations and this funding should be subject to full governance and accounting oversight.
