Awema: Welsh government warned in 2004 to stop funding
The Welsh government was warned eight years ago to stop new public funding for an under-fire race equality body, BBC Wales can reveal.
A 2004 report into the All Wales Ethnic Minority Association (Awema) said no new projects should be funded until it demonstrated improved project and performance management.
It follows allegations of financial irregularity at Awema.
First Minister Carwyn Jones insisted his government had "nothing to hide".
The 2004 report, which was commissioned by ministers, also recommended more stringent scrutiny from civil servants.
Awema is currently at the centre of claims of financial mismanagement, with a Welsh government audit into its spending of £8.4m in public funding due to be published on Thursday.
Awema's chair, Rita Austin, has defended the charity, and said that media coverage of it was reminiscent of "a time honoured way of debasing and devaluing the contributions of black and minority ethnic people".
SUMMARY OF ALLEGATIONS
- Naz Malik used "Awema funds in an inappropriate way", including paying off credit card debts worth £9,340
- Mr Malik "has increased his own benefits package without due openness or transparency". This includes Mr Malik's salary being increased to £65,719 without approval from the board
- Mr Malik "has authorised inappropriate payments, expenses and purchases, which may constitute gross misconduct"
- Mr Malik's daughter Tegwen Malik "has been employed, and promoted on a number of occasions, without any internal or external competition". It is alleged her salary increased from £20,469 in January 2008 to £50,052 in August 2011
- Regular claims are made for relatively expensive meals and hotels, including alcoholic drinks
- The treatment of some junior staff was so poor that it contravened their human rights
- Source: Paul Dunn's report for trustees
Responding to the 2004 report, a Welsh government spokesman said its priority was to handle the current issues with funding Awema.
"However, and as we have already announced, the permanent secretary is currently reviewing the historical funding of the organisation. It would be inappropriate to comment until that work has been completed," he said.
The government announced last month it was suspending all public funding to Awema because of the concerns raised about the actions of chief executive Naz Malik and others within the organisation.
Opposition politicians say the report, which was found in the assembly's library by the Welsh Liberal Democrats, is evidence that the Welsh government had ignored warnings about the organisation.
Earlier, Mr Jones said it was "not clear" whether the report had been published.
By 2004, Awema had received £325,000 in taxpayers' money to engage with black and minority ethnic communities.
Even after the review recommended that no further funding be given, the Welsh government continued to fund the charity to the tune of £8.5m.
End Quote Kirsty Williams AM Leader, Welsh Lib Dems
In tough financial times, the public expect the Welsh government to ensure that their taxes are spent wisely... this is simply not good enough”
Kirsty Williams, leader of the Welsh Liberal Democrats told BBC Wales: "The Welsh Labour government was advised by an independent review not to continue to fund this organisation. Why did they not heed this advice? Awema have been in receipt of millions of tax-payers pounds since this report.
"In tough financial times, the public expect the Welsh government to ensure that their taxes are spent wisely. This is simply not good enough."
The most senior civil servant in Wales, Dame Gillian Morgan, accepted last week that Awema should have been designated as "high risk" in terms of receiving public funds, leading to calls for the government to publish the report.
Dr Austin has said that suspending Mr Malik would have incurred great cost, and that she she submitted a serious incident report to the police and Charity Commission before Christmas.
Writing on the charity's website, she said a disciplinary panel into Mr Malik concluded there had been "a completely inappropriate advance of expenses payments, the balance of which the panel instructed had to be repaid the next day".
The matter was regarded as gross misconduct, said Dr Austin, and Mr Malik gave an "open and transparent declaration" and a written warning was placed on his record.
"Should any evidence emerge which contradicts the panel's view, the sanction will be reviewed. And of course, should the police think fit at any stage they will take their own enforcement action," she wrote.
Mr Malik was given an oral warning following allegations of unauthorised salary and pension benefits.
The panel saw evidence that all salary and pension benefits were approved by the charity's board, but there were occasions when Mr Malik was not documented as declaring an interest in relation to his close family members.
Mr Jones told AMs at First Minister's Questions that it was "not clear" whether the earlier report had or had not been published.
The report was subsequently obtained by the Welsh Liberal Democrats. It was commissioned in 2003 by officials working for the then Social Justice Minister Edwina Hart and carried out by a firm of independent consultants.
After examining three publicly funded Awema projects, it concluded: "The overall recommendation is that no further funding is provided to Awema for new projects until Awema is able to verify that it has taken a systematic approach to project and performance management."
It was also critical of the civil service oversight and scrutiny of the projects, saying: "The primary concern regarding the role of the Equality Policy Unit (EPU) was the lack of scrutiny and performance appraisal exercised throughout all three projects."
Both Liberal Democrat and Conservative leaders raised concerns about Awema with Mr Jones, who said an initial report examining whether it was appropriate to continue receiving public funding would be published on Thursday.