Page last updated at 13:43 GMT, Tuesday, 13 October 2009 14:43 UK

Assembly overseas work criticised

IBW has been heavily criticised in two reports following a row over its staff's expenses

A row over staff expenses has been followed by heavy criticism of the Welsh Assembly Government's overseas business promotion arm.

The performance of International Business Wales(IBW) is described as mixed at best, and there are questions over 10% of staff expenses.

The Welsh Liberal Democrats said the auditors' report "confirms our very worst fears."

Wales' top civil servant said the IBW would "work to address issues raised."

IBW was embroiled in a political row in July when First Minister Rhodri Morgan was forced to apologise to the Liberal Democrats.

He firmly denied claims they had made about staff expenses, which later turned out to be true.

The failure of Government to ensure that taxpayers' money is spent wisely and effectively is clear for all to see
Kirsty Williams, Welsh Liberal Democrats

Two reports were commissioned.

The first, an audit of expenses, has found some policies for staff expenses claims abroad are unclear.

Other claims, for items including business and first class flights, need further investigation and future disciplinary action, the report says.

The second, an evaluation of the performance of IBW, finds that it has significantly underperformed in the United States, Asia and some parts of Europe over the past five years.

The forensic investigation into expenditure was commissioned by the assembly government's permanent secretary, Dame Gillian Morgan, and was conducted by auditors KPMG.

We will work urgently to address issues raised by KPMG and to introduce the changes and improvements needed to strengthen expenditure control procedures
Dame Gillian Morgan, permanent secretary

The auditors examined more than 7,000 transactions in a detailed two-month study.

In their report they say they found the majority of procurement card and other transactions examined had been conducted appropriately.

Some policies, they said, were not clear enough, particularly for overseas-based staff.

A proportion, some 11% of the transactions reviewed, might be in breach of policy.

A small number, said the auditors, were clearly in breach of policy and appropriate action would be taken in those cases.

The 781 transactions (11%) where there may be breaches of policy require follow-up work to determine whether any further action is required, the auditors said.


It is expected that this follow-up investigation will be concluded by Christmas.

The report makes clear that where auditors have ruled a transaction to be 'out of policy' it may only be a small element of that transaction which is non-compliant.

Kirsty Williams, leader of the Welsh Liberal Democrats, said: "These reports justify our concerns in both areas.

"On performance, the report finds that IBW has not developed a strong brand, has failed to take advantage of opportunities from emerging economies like India and China and has left Wales at the bottom of the 12 UK regions when it comes to safeguarding jobs.

"On the issue of expenses, the report confirms our very worst fears about the culture of spending in IBW. The failure of Government to ensure that taxpayer's money is spent wisely and effectively is clear for all to see."

Ms Williams said that the assembly government should strongly consider whether IBW could continue to exist in its current form.

Dame Gillian, who commissioned the auditors' report, said she accepted the conclusions of the KPMG report and welcomed its recommendations.

"We will work urgently to address issues raised," she said, "and to introduce the changes and improvements needed to strengthen expenditure control procedures."

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15 Jul 09 |  Wales politics
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14 Jul 09 |  Wales politics

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