The Wales Audit Office published a report on the Cywain Centre, a rural heritage attraction, which opened in April 2008 but closed less than four years later in September 2011, costing the taxpayer more than £3.4m.
Auditors found that all of the public sector funders involved recognised that the centre was unlikely to generate the revenue forecast. Yet, despite this, they approved grant funding and failed to put in place any measures to manage or mitigate the risk of financial failure.
Once the Cywain Centre became operational, funders did not monitor its operation adequately and were slow to respond to the threat of its closure, and the actual closure, in order to protect public assets.
Today’s report is the latest in a series from the WAO on weaknesses in grant-funded schemes. According to the watchdog, the changes implemented following these reports make it less likely that the mistakes evident in the funding of the Cywain Centre will occur again.
Auditor General for Wales 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.’
However, the WAO made two specific recommendations: a call on the Welsh Government to ensure all public sector funders are aware of risks when assessing individual projects; and more prompt action to protect the public’s interest when a project is in severe difficulties.
‘My recommendations are intended to further strengthen these arrangements and ensure that Welsh Government grants deliver better value for money,’ said Thomas.
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.
‘We will now consider the recommendations of the WAO’s report and will respond to the findings in due course.’
