The Welsh Government’s handling of funding for the now-defunct All Wales Ethnic Minority Association (AWEMA) highlights the main weaknesses in its management of grants, says a National Assembly for Wales Committee.
20 June 2013
In a wider review of grants management, the Public Accounts Committee concludes that there is often a lack of communication or co-ordination between departments responsible for Welsh Government grants resulting in effective monitoring and safeguards not always being in place.
A report by the Wales Audit Office in October last year highlighted weaknesses in the management by the Welsh Government in funding AWEMA. The charity received more than £7 million over an 11 year period, but was closed down after allegations of financial irregularities.
The Committee concludes that some progress has been made in overhauling the system. It also recommends the publication of an annual grants report and that the Welsh Government develops a mechanism for escalating its monitoring arrangements in response to specific concerns arising around financial irregularities or governance issues.
The Committee states that a change in cultural approach to managing grants is necessary to ensure that the Welsh Government acts as a single organisation in its relationships with external recipients of public funding.
“The problems which emerged at the All Wales Ethnic Minority Association (AWEMA) are symptomatic of the weaknesses that have been identified time and again in the Welsh Government’s grants management systems.” said Darren Millar AM, Chair of the Public Accounts Committee.
“People outside the Welsh Government may think of it as a single entity: ‘the Welsh Government.’ But in managing its grants, the Welsh Government currently appears to operate as a collection of different departments that don’t necessarily know what other departments within the organisation are doing, or what they have done in the past.
“One of the biggest things that the Welsh Government can do is to itself prioritise the importance of getting on top of its grant management processes.
“We recognise and welcome some of the progress detailed to us during the course of our inquiry, but we believe a change in cultural approach to managing grants is necessary to ensure problems similar to those which came to light at AWEMA do not happen again.
“In a time of economic hardship, it is vital that Wales gets the best from every pound of public money spent.”
The Committee makes 18 recommendations in its report including:
The Welsh Government publishes an annual grants report which sets out how individual grants were reviewed in its Grants Management Review, which alternative funding options were considered, and what rationale was used to determine the most effective funding options in each case;
The Welsh Government sets out timescales for the introduction of a central grant management IT system, and the implementation of a Customer Relationship Management system; and,
The Welsh Government develops a mechanism for escalating its monitoring arrangements in response to specific concerns arising around financial irregularities or governance issues, including when an organisation is given ‘the benefit of the doubt.’
Link to more information about the Public Accounts Committee
Link to more information about the grants management inquiry