Page last updated at 19:53 GMT, Wednesday, 17 March 2010

'Financial mismanagement' at Wrexham community scheme

Council housing Plas Madoc
A report found serious financial mismanagement

An audit investigation into a regeneration scheme in one of Wales' most deprived areas has found evidence of financial mismanagement.

The Plas Madoc Communities First scheme in Wrexham, had "fundamental weaknesses of management", the Audit Office said.

It found a car had been bought from petty cash, and more than £3,000 was spent on driving lessons for staff.

The Chair of the Assembly's Public Accounts Committee, described the findings as "scandalous".

Jonathan Morgan said: "Plas Madoc Communities First has clearly been misusing public funds for a number of years and urgent action is needed to ensure this doesn't happen again."

AUDITOR FINDINGS
A number of payments had been made to people who were not partnership staff members, many of whom the report says "are related to the coordinator."
The coordinator's brother received a mobile phone from the partnership costing £1,460.
Another brother received £40,615 for providing "Brazilian Ju Jitsu training

The findings has been referred to North Wales Police for consideration of possible criminal activity.

Plas Madoc Communities First (PMCF) came into being in 2003. Its annual income is about £735,000, with assembly government grants of more than £500,000 per annum.

Auditors found those governing the partnership "had little regard to recognised standards in public life".

They say assembly government monitoring arrangements failed to address serious shortcomings more than six years ago.

The report also said many weaknesses identified by auditors were first found by Wrexham Council's internal auditors as far back as 2003, but that it was unclear if any follow up action was taken.

Auditors noted many examples of what representatives of the partnership reportedly referred to as a "culture of generosity" created for staff and associates.

This included "generosity with public funds applied to PMCF trustees, employees and their families and friends", the report said.

Cooperation

Plas Madoc Communities First trustees board chairman Mark Leather said the partnership had co-operated fully with the audit team and suspended two members of staff at the outset of the investigation.

I deplore the actions which have led to public funds being diverted from their intended purpose
Social Justice Minister Carl Sargeant

Social Justice Minister Carl Sargeant said: "I deplore the actions which have led to public funds being diverted from their intended purpose.

"This matter has been referred to North Wales Police for consideration of possible criminal activity. "

Chief Executive of Wrexham County Borough Council Isobel Garner said Plas Madoc Communities First is an independent company and charity not associated with Wrexham Council in any way.



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