In a sharply critical report, the Commons Public Accounts Committee says that the commissioners have failed to use new powers properly. One-third of charities fail to provide annual accounts and a quarter failed to provide annual returns, the report says. This is "unacceptable".
The commission claimed that abuse was a minor problem among charities but failed to supply sufficient evidence to back up its view, according to the committee chairman, David Davis, Conservative MP for Haltemprice and Howden.
"British people are very generous and are happy to donate very large sums to charity. They do so without question, in the belief that charity status cannot be abused. The Charity Commission must do more to ensure the regulatory framework does not fail public expectation. The commission were given much stronger powers in 1993 and the committee expects those powers to be used," he said.
"I am concerned that the commission is too complacent about the possibility of abuse in the charity sector and have shown a lack of management grip in their regulation of the sector.
"Their register is inaccurate, they have failed to secure proper accounts from many charities, and they place insufficient emphasis on monitoring and investigating charities."
The commission had paid too little attention to enforcing accountability and to promoting public confidence in the charitable sector. The commission is charged with regulating 184,000 registered charities in England and Wales. The charity sector has an annual income of pounds 16bn and assets of pounds 35bn.
However, 28 per cent of charities on the register had no income, and were potentially inactive. The committee urged the commissioners to remove from the register those charities which were no longer operating.
Despite a target of 90 per cent accuracy on its register, the commission had only achieved 76 per cent accuracy.
The committee expressed particular concern that only 8 per cent of the commission's staff were dedicated to investigative work. It also noted that the commission achieved only half its performance targets in 1996- 97.
Although it monitored cases where customers had asked for support from the commission, during the first three months of the operation only 17 per cent of cases involving inefficiency or irregularity had been rectified.
In 1995, 124 investigations into proven cases of malpractice were completed, but the commissioners' powers were used in only 10 of those.
During the first half of 1997, 60 trustees out of a total of 1 million resigned as a result of action by the commissioners, according to evidence given to the committee.
During 1995-96, 4,358 charities were removed from the register as a result of action by the commission. In 1996-97 the figure was 8,206.
The committee called on the commission to obtain accounts from all charities with an income in excess of pounds 10,000, and to develop clear policies for dealing with those who ignore requests for information.Reuse content