Awema trustees left it vulnerable, says Charity Commission
The trustees of a defunct charity whose chief executive bought rugby tickets and hotel stays on expenses have been criticised by the Charity Commission.
Over a decade, the All Wales Ethnic Minority Association (Awema) received £7m, much of it from Welsh ministers.
On Wednesday, the commission said Awema was vulnerable because trustees did not put the right safeguards in place.
Chief executive Naz Malik was cleared of two counts of fraud against the charity at Swansea Crown Court in 2014.
Awema, which was based in the city, was created to help people from ethnic minorities access public services and give them more opportunities in life.
But in January 2012 serious concerns were raised about how the charity was run by Mr Malik.
That year, BBC Wales revealed how allegations were raised by staff members about sexual harassment as well as a conflict of interest arising from Mr Malik's daughter being employed and promoted within the organisation.
A Wales Audit Office (WAO) report into the scandal in that year concluded it should be seen as a "wake up call" for the Welsh Government's grant funding approach.
The report said warnings about Awema were not heeded for a decade and millions of pounds were awarded.
On Wednesday, a Charity Commission report highlighted its concerns about Awema's trustees.
The report said: "The failure of the trustees to put appropriate safeguards in place left the charity vulnerable to its resources being misused, which did in fact materialise."
The 2012 WAO report highlighted how Awema funds were used to pay for gym membership for staff worth £2,120, rugby and cricket tickets totalling £800, and a £110 parking fine for Mr Malik.
Other revelations included:
- that Mr Malik "has increased his own benefits package without due openness or transparency". This included Mr Malik's salary being increased to £65,719 without approval from the board
- that Mr Malik's daughter Tegwen Malik "has been employed, and promoted on a number of occasions, without any internal or external competition". Her salary increased from £20,469 in January 2008 to £50,052 in August 2011
- that Mr Malik used Awema funds in an "inappropriate way", including paying off credit card debts worth £9,340
In 2014, Mr Malik was cleared of two counts of fraud against the charity at Swansea Crown Court.
A jury failed to reach a decision on a third count, relating to the credit card debts.
Mr Malik insisted that the payments were made to himself for expenses.
On Wednesday, the Charity Commission also revealed that Mr Malik had used the charity's expenses to pay for "luxury hotel" stays and would "spend large sums at business cost at restaurants on food and alcohol".
The report said: "Records and invoices examined as part of the inquiry indicate that whilst travelling on charity business, the CEO [chief executive officer] and other staff members would stay in hotels costing in excess of £150 per night, whilst staying overnight in places such as Kent and Llandudno.
"They would simultaneously spend large sums at business cost at restaurants on food and alcohol."
The Charity Commission said Awema's trustees were not given enough training about their roles and responsibilities, and this led to a "lack of clarity amongst the trustees over who had authority to authorise the CEO's expenses".
The report continued: "This uncertainty resulted in poor controls over the authorisation of expenses resulting in a situation where the CEO was potentially able to issue himself cheques for large sums, including projected future expenses, with no meaningful oversight from the trustees."
'Never had proper training'
In an email Mr Malik accused BBC Wales of "choosing to rake up old discredited half truths".
He said the report "totally vindicates my actions on aspects of conflicts of interest".
Former Awema trustee Zakia Ahmed, said she felt "terrible" about what happened within the former charity.
Mrs Ahmed says she was never "active" in the management of the charity.
"I was in poor health at the time and I said to the chief executive, 'I can't get to these meetings' and he said 'It's OK you don't need to. If we need to consult you, we'll call you'," she said.
"I wasn't involved in the expenses. I wasn't in the meetings. I can't say anything about the others but I was telling them that I couldn't get there. I never had proper training".
"Our responsibilities weren't explained to us. I don't know how it all happened".