Funding quango set bad example
The National Council for Education and Training for Wales suffered "serious management failings", according to the assembly's audit committee.
Jane Davies, the committee's chairman, said: "The national council is a telling example of what can go wrong when public funds are put at risk by poor project and financial management."
The report concluded that the committee was "deeply concerned by the evidence presented to us by the auditor general and witnesses on the actions of the national council and its staff".
It said the management framework intended to impose controls on public-funded projects, was "not fit for purpose" and put public money at serious risk.
It said the council, formerly known as ELWa, had raised "questions concerning the managerial competence of senior managers at the national council during its first two years", and recommended the assembly review its recruitment processes. It highlighted the quango's handling of the Pop Factory as an example of the "cultural malaise" within the organisation.
The Pop Factory was set up to create learning opportunities for young people in the Rhondda, using information technology. But there was poor supervision of the project by the national council which was to allocate the Pop Factory pound;4 million from its innovation development programme.
The council - which wanted to reduce its underspend in the 2000-1 financial year - gave the project pound;2m before the cash was needed, in breach of government accounting practice.
The report said it was concerned by the national council's management of the project and added: "(The project) seems to have been a viable concept.
But its handling by the national council was extremely poor at almost every stage." The report went on to stress the Pop Factory was not an isolated case and that serious flaws existed in the national council's handling other projects.