19 September 2003
A 'fundamental breakdown' in financial controls at the National Council for Education and Training for Wales meant that it failed to protect the interests of taxpayers, according to the National Audit Office.
The public spending watchdog said that controls over the projects the quango funded were inadequate and there was no proper analysis of expected outcomes.
Most damning of all, its report found that normal procedures at Elwa, as the organisation is known, ignored vital checks such as financial viability tests and project risk assessments.
Although one particular project, a £4m scheme to set up the Pop Centre Café in the Rhondda, south Wales, came in for severe criticism, similar failings were identified in the other 17 that Elwa financed.
According to the report, published on September 16, the contract between Elwa and Learn to Live Ltd to set up the café did not 'provide an adequate safeguard for public funds or a sound basis for the management of the project'.
Sir John Bourn, the auditor general for Wales, said: 'These audit findings demonstrate a serious and fundamental breakdown in the controls that should have been operated.
'It is not acceptable that public business was conducted in this way.'
A spokesman for Elwa acknowledged its 'serious deficiencies'. He added: 'These errors… are not acceptable and the organisation has been working to ensure that these mistakes are never repeated.'
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