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 

legislation. “

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.