ChangeUp, the Government's infrastructure-building programme, comes in for the strongest criticism in the National Audit Office report into third sector capacity-building, published today.
The NAO found that doubts over the accuracy and completeness of data meant that no proper record existed of ChangeUp spending in the first two years of its existence to April 2006.
The report quotes one sector chief executive as saying that the bureaucracy surrounding ChangeUp "diverted support organisations from supporting us".
It warns: "Unless other funding or income is available, more services and projects are likely to fail and there is a risk that the 2014 vision of excellent and sustainable support nationwide to the front line is not achieved."
The report recommends that Capacitybuilders, which has run ChangeUp since 2006, should establish objective measures of the impact of ChangeUp and help third sector support providers to plan ahead by telling them how long it will take to make funding decisions.
In a statement, Matt Leach, chief executive of Capacitybuilders, said: "I welcome the NAO report, and in particular its recognition of the emerging evidence of the positive impact of Capacitybuilders' funding on the quality of support available to front-line third sector organisations.
"Working closely with the Office of the Third Sector, Capacitybuilders will continue to develop our approach to supporting the sector, building on the recommendations contained in the NAO report."