The Office of the Scottish Charity Regulator has called for changes in Scottish charity law that would allow it to take a more "proportionate and flexible" approach to its compliance work.
In its annual report, published last week, the OSCR says that, as a matter of "very high priority", it should be given the power to alter or revoke formal directions it makes to a charity that no longer meets the charity test.
Charities in that position currently have to take steps to meet the test by a fixed deadline or be removed from the register. The OSCR wants to be able to take into account new evidence or changes in a charity's circumstances.
"The change would allow a more proportionate and flexible response from the regulator, enabling us to facilitate compliance rather than adopting a sanctions-based approach," the report says.
After discussions with the Scottish Government, a question on the desirability of this change was included in a consultation on minor changes to the Charities and Trustee Investment (Scotland) Act 2005, conducted earlier this year.
Many of the other amendments suggested by the Scottish Government echoed recommendations made by the OSCR in its previous annual report. "We very much welcome the fact that ministers have noted these recommendations," the latest report says.
The regulator also wants to be able to direct trustees to take specific actions after a statutory inquiry - a governance review, for example. Under existing rules, it can only order trustees to desist from certain actions or suspend them.
It also thinks charities on the Scottish register should be required to have a continuing connection with Scotland, such as having an office or a trustee resident in the country, in order to protect the Scottish public's confidence in the charity brand.
The report notes that the number of charities that applied to the OSCR for approval to take certain actions, such as amending their constitution or merging with another organisation, increased by 40 per cent over the course of the year.
According to the report, this and other rises indicate a greater awareness among Scottish charities of their legal obligations under the 2005 act.