Welsh government says it failed to recover nearly £300,000 after equality charity Awema closed

The government has confirmed the total after the case was discussed before the Welsh Assembly's Public Accounts Committee

Welsh Assembly
Welsh Assembly

The Welsh government was unable to recover nearly £300,000 of public funds after the closure and liquidation of the equality charity Awema, a committee of Welsh Assembly members has heard.

The All Wales Ethnic Minority Association, which received £7.15m in grant funding from the Welsh government between 2000 and 2011, was closed in March 2012.

A subsequent report by the Wales Audit Office said the government had been weak and unfocused in its management of the grant and its responses to concerns about the charity. The charity’s former chief executive, Nasir Malik, was tried and later acquitted at Swansea Crown Court of two counts of fraud, and a third charge was dropped.

The government today confirmed that it lost a total of £282,005 as a result of the charity’s demise. Its confirmation comes after Awema was discussed in a session of the Welsh Assembly’s Public Accounts Committee yesterday.

Sir Derek Jones, Permanent Secretary to the Welsh Government, told the committee there had been a "substantial loss to the public purse" of about £300,000. David Richards, director of governance at the Welsh government, said it had initially estimated that it might be owed up to £500,000.

Richards said: "We didn’t get very much out of it, but it wasn’t for the want of trying." Jones said the liquidator paid out 10p for every £1 owed to creditors.

The PAC was also told by Peter Ryland, deputy director of the Wales European Funding Office, that the public purse would not be taking a hit because of the June 2014 closure and liquidation of another government-funded charity, the Minority Ethnic Women’s Network. He said: "I won’t say a lot if you don’t mind, because there are still police proceedings going on around that one, but I can say that we’re not going to be losing money on that."

The Welsh government said in June that it had suspended funding to the organisation "as a result of an ongoing police inquiry relating to the organisation".

Jones, Richards and Ryland were giving evidence to the PAC after the release last month of the 2014 Welsh Government Annual Report on Grants Management.

This is the second year for which a report has been produced. It was commissioned because the Welsh government "has previously acknowledged the limitations of its overall management information and corporate data available to support decision-making on grants", the report says.

Jones told the PAC that he welcomed the extra scrutiny and transparency that publishing the report and appearing in front of the PAC provided.

"Matters are much improved from when I first sat in front of you a couple of years ago as a new principal accounting officer in the aftermath of the Awema affair," he said.

But he added: "There are still some quite important areas where further progress is needed and difficult cases aren’t going to go away; we’ve seen recently from the Cyrenians case that there’s a constant need for care and vigilance".

The homelessness charity Cyrenians Cymru said it would go into administration after two members of its finance team were arrested on suspicion of fraud.

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