A spending watchdog has criticised a lottery group for the way it gave a £300,000 grant to an organisation which helps asylum seekers.
Fund was found to be within the law
Spending watchdog the National Audit Office (NAO) cleared the Community Fund of any wrongdoing, but said it hadn't been "sufficiently robust" when it carried out checks on the group.
The fund has been told to check applicants' activities more
closely to prevent the funding of "political and doctrinaire behaviour".
The NAO said the quango had not taken the National Coalition of
Anti-Deportation Campaigns' (NCADC) political campaigning into account.
David Blunkett ordered an investigation into whether the fund had broken the law after the NCADC's website accused the home secretary of "colluding with fascism".
The row was blamed for a drop in Lottery sales, and the grant was temporarily halted.
We must do everything to prevent this
Community Fund chief executive Richard Buxton
On Wednesday controller and auditor general Sir John Bourn ruled it had been consistent with the Fund's aims to help vulnerable people.
But it might have been less controversial if the Fund had made
wider checks on the organisation and imposed stricter conditions in the first place, he added.
Fund chief executive Richard Buxton said: "We failed to spot the more politically sensitive elements of the
"We must do everything to prevent this
But he added: ""The group have abided by the tough new terms and conditions we have
"And the public can rest assured we will be monitoring its
activities more closely in the future.
Organisations engaging in political activity are not eligible for lottery funding
Home secretary David Blunkett and culture secretary Tessa Jowell
"Much of the work the NCADC does is extremely valuable to refugees and asylum
seekers, many of whom are very vulnerable people."
The Fund is an independent body under the general supervision of the Department of Culture, Media and Sport.
In a joint statement Mr Blunkett and culture secretary Tessa Jowell said: "We need to be sure the activities of this organisation are conducted within the law.
"This is an essential requirement for the public confidence on which the Lottery depends.
"Funding organisations to campaign is clearly acceptable.
"However, organisations engaging in political activity are not eligible for lottery funding.
"This principle must be upheld."