Thursday, 9 February 2012

Government stop cash to AWEMA

AWEMA are to have their cash stopped immediately by the government. This follows an inquiry into the organisation by Internal Audit Services of the Welsh Government and the Big Lottery Fund.

The report indicates a dysfunctional organisation. Indeed the Auditors had difficulty with their work because of
" The absence of audited accounts for 2010/11; 
The absence of any management accounts; 
The absence of other key financial information, such as bank 
reconciliations and creditors balances; and 
The inability of the organisation to provide us with information 
from its financial accounting software package.

Despite this they did come to a conclusion which can be summarised in the following 

This forensic investigation has identified significant and fundamental 
failures in the control and governance framework within AWEMA.  In 
light of these findings we cannot provide any assurance that there 
are appropriate arrangements in place to safeguard and make proper 
use of the Welsh Government,WEFO and the Big Lottery Funds 
entrusted to AWEMA.  These failings permeated the whole of the 
organisation and suggest that the Trustees, including the CEO, had 
little regard to the recognised standards in public life and the full range 
of their statutory responsibilities under charities and companies 
In the light of the damning nature of the report, Jane Hutt the Equalities Minister had little choice but stop the flow of cash to the organisation. She said that
"The investigation has identified significant and fundamental failures in the control and governance framework within AWEMA:
  • Governance arrangements in relation to management and to the AWEMA Management Board of Trustees;
  • Financial controls and processes;
  • An absence of key policies and procedures; and
  • An organisational structure that does not adequately support the operations of AWEMA.
In light of the current control framework the report concludes that it cannot provide any assurance that there are appropriate arrangements in place to safeguard and make proper use of the Welsh Government, WEFO and Big Lottery funds entrusted to AWEMA.
In light of this, Dr Rita Austin, Chair of AWEMA has been informed that funding for AWEMA under the Advancing Equality Fund is terminated with immediate effect. In addition Dr Austin has been informed that the three ESF Convergence agreements with AWEMA have also been terminated.  WEFO’s Project Inspection & Verification Team will carry out an immediate review of the eligibility of expenditure for EU funding under these projects and will expect the full co-operation of AWEMA in completing this work.  Action will be taken to consider whether grant funding should be reclaimed.”
She also announced a full independent review of the history of the funding of AWEMA by the Welsh Government.
In a parallel move a Welsh Labour spokesperson said regarding AWEMA,
"Today we have suspended both Naz and Tegwyn Malik pending the outcome of an internal enquiry. " 
Both are prominent members of the Labour party.This shows how damaging the events are to Labour. It was a Labour Government that funded the organisation. That funding continued despite questions being raised about the organisation seven years ago (see my last blog). 
It poses the question, was there a predisposition to carry on funding the organisation despite warnings that all was not right in its administration, because key officials in AWEMA were card carrying Labour members?  
The Labour Government need to provide answers, and soon, or this scandal could do them real damage.


  1. If this was a UK issue a Minister would resign. Due to the lack of a strong media in Wales Welsh Labour will get away with mis management AGAIN.

  2. Keep at it. Heads will have to roll in this one, I fear. But it will be the 'free press' that forces the issue!

  3. Does anyone else agree that in the light of the latest news, there needs to be action taken to ensure that those involved and mentioned in the allegations of financial corruption should not be allowed access to the AWEMA offices? In most organisations where there has been even a whiff of allegations, good HR practice means that you keep employees or trustees that might be involved in any pending investigations away from the workplace. This is for their own benefit as well as the organisation as they might have access to documentation and records that might be required for any pending or potential investigation."
    Looking at the AWEMA website the CEO and the Chair of the Trustees seem very much still involved in the organisation. All this is bemusing to me for the reasons mentioned above.
    I also don't understand how the Chair of the Trustees managed to get a considerable amount of money for work for the charity? I know for a fact you have to jump through hoops with the charity commission to pay any trustee money for work. You have to prove there is no other suitable candidate that can do the work. I presume they communicated with the charity commission on this

  4. Well done Gareth on your reporting of this subject, please keep it in the limelight. My pet hates are bullying, cronyism and corruption and I think there is plenty of this going on here. I have see so much similarity with a Welsh charity I used to work with, witnessed it going on in two others and I am sure this is just the tip of the iceberg.

  5. Anon 3.04pm,
    You are totally correct that this is the tip of the iceberg.
    So much European money is being abused by many benefactors, Wales being a small country should be able to audit this better.

    Out of everything in devolution I believe the failure of the Labour Welsh Government to control European funds and audit it correctly is perhaps the most damming. We've spend millions on ridiculous projects, where individuals have benefited privately. Rather than spend it on large infrastructure projects which really individuals cannot. And the fact that we are still entitled to European funds proves we have wasted billions.

    Ministers must resign on this issue - it is huge and paints a terrible picture of previous Welsh Governments.