Canolfan Cywain rural centre 'flawed from the outset'
A new report has criticised the way millions of pounds of public sector money was given to a heritage centre in Gwynedd that closed three-and-a-half years after it opened.
An investigation by the Wales Audit Office found that the Cywain Centre in Bala was likely to fail from the start.
But auditors say Welsh Government officials did not challenge whether the centre was capable of attracting as many visitors as managers had predicted.
The auditor's inquiry came about following a BBC Wales investigation into the collapse of the project which cost the public purse £3.4m.
Described as a "heritage, rural life and sculpture centre", Canolfan Cywain was officially opened by the then deputy first minister Ieuan Wyn Jones in April 2008.
Local enterprise agency Antur Penllyn initially received £2.2m of public money for the project and predicted 40,000 visitors a year after its first five years.
More money was pumped in after the centre ran into difficulties but it closed in September 2011 at a total cost to the public purse of more than £3.4m.
The auditor's report said the Welsh government and other public sector funders did not "adequately challenge flawed assumptions about the income the centre would generate" or a lack of clarity over what it was meant to offer.
It also said public bodies failed to take appropriate steps to reduce the risks of the centre failing, placing too much emphasis on its potential benefits and being slow to respond to the threat and eventual closure of the site.
Grant funders should in future share their assessments of a project's risks and step in sooner at the sign of trouble, the report added.
Auditor General Huw Vaughan Thomas said: "My report on the Cywain Centre highlights some serious weaknesses in grants management by public sector bodies that existed at the time.
"Subsequently, there have been some improvements in the way grants funding is managed.
"My recommendations are intended to further strengthen these arrangements and ensure that Welsh government grants deliver better value for money."
Darren Millar, chairman of the assembly's public accounts committee, said the report's findings were "extremely disappointing" but "should come as no surprise" in the wake of previous concerns about grant-aided projects.
A Welsh government spokesman said: "Safeguarding public money is something we take extremely seriously.
"We have already made improvements to the way we monitor projects, based on lessons learned from previous WAO reports."