An inquiry is underway into the decision to close a residential centre for autistic children and young people less than a year after it opened.
Education Minister Jane Hutt said the decision to shut Hyfrydle raised concerns about Denbighshire Council.
Education services were severely criticised last year which led to the ousting of the former council leader.
Denbighshire council said the centre was not viable and could have lost the authority £500,000 a year.
Hyfrydle children's home opened in November for pupils attending Ysgol Plas Brondyffryn in Denbigh, after Denbighshire Council said a need for specialist care and education packages for autistic children had been identified.
But councillors voted last week to close the Denbigh-based centre after hearing the home had been affected by competition from other autism centres and only two of six available places had been taken.
The National Autistic Society has described the closure as "premature" and "devastating."
'Decision-making'
Susan Fleet learnt of Hyfrydle 's closure a week before her autistic son Elliot, 16, moved in last July.
She said the home offered "amazing" facilities but was the 18th centre she had visited to find a suitable placement for her son.
She said: "I can say I don't think it was marketed very well because if I had known about it, it probably would have been at the top of my list.
"I thought it was superb. I couldn't believe I'd found this little facility in the heart of Denbighshire."
The assembly government does not have the powers to overturn Denbighshire's ruling but will ask why a centre that was opened only last November was closed this July, and what impact it will have on the children who would have gone there.
In a written statement, Ms Hutt said the council's decision raised "questions about corporate decision-making within the authority".
She said she expected the review to be completed by the end of the assembly's summer recess when a further statement would be made.
Redundancy
A union also criticised the closure plan after 11 care workers were taken on at the home about a fortnight before councillors voted for the closure.
Denbighshire Council said Hyfrydle had been affected by competition from other autism centres in Wales.
Council leader Hugh Evans said: "There are only two young people living in Hyfrydle, only one of whom is from Denbighshire.
"On this basis, the facility was losing the council £500,000 a year.
"Even if the three other young people for whom placements had been identified - again only one of them is from Denbighshire - had taken them up, the annual loss to the county council would still have been £300,000."
Mr Evans claimed the council would rightly have been questioned if it had not "acted to stem such a significant financial drain on its resources".
"Intensive work is being taken forward both by our own officers, and those of other authorities, to find good alternative placements for the young people affected," he said.
"We are also doing our utmost to avoid redundancy for the staff involved."
Mr Evans also expressed regret at "the minister's attempt to link a decision on one facility to 'wider and systemic matters' and the council's corporate governance".
He pointed to "the many projects" that had been successfully managed and completed.
Last year, a damning report by the schools inspectorate, Estyn, led to the resignation of council leader Rhiannon Hughes, and the establishment of an independent education recovery board.
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