The National Council for Education and Training in Wales is to be slimmed down following the row over rising costs that led it to overspend by more than pound;2 million.
Staff numbers will be cut at the organisation, which manages the pound;500m education and training budget.
New people will be drafted in to manage its affairs.
Welsh Assembly education minister Jane Davidson, who came under attack from opposition members last week, defended the council's record. She pointed to the Assembly's audit report which said mis-spending happened when the four Welsh private-sector training and enterprise councils were swallowed up by Education and Learning Wales.
"The council has done well in its first few years in difficult circumstances. That does not excuse what has happened but it is important to understand that the council did nothing unlawful, nor can it be said that any expenditure was wasted," she said.