Race equality body Awema 'should have been high risk'
A charity facing allegations of financial corruption should have been graded "high risk", Wales's top civil servant has said.
Funding to the All Wales Ethnic Minority Association (Awema) has been stopped after a highly critical report.
Welsh assembly members were told it was up to the police to investigate whether there should be prosecutions.
Permanent Secretary Dame Gillian Morgan said the Welsh government was "extremely concerned".
A report commissioned by Awema's trustees details allegations against the chief executive Naz Malik, including that he approved his own pay rise without authority.
Dame Gillian told the assembly's Public Accounts Committee that the Welsh government was in discussion with the police and there were questions for the Charity Commission to examine.
Giving evidence on the way the Welsh government manages the grants it gives out, she said: "If you look at the grants programme it's clear that sometimes we have not necessarily been - and this is a big historical thing - as robust in making sure organisations have all the standards we would expect."
Annual checks were made into whether Awema was filing its accounts properly.
But she added: "We know that the processes over recent years have been fine, but I think we have to go back much longer than that to answer questions and to get some answers about our long-term management of an organisation which if you look at the history we should have graded as a high-risk organisation."
She added: "At the end of the day, if an organisation that we give a grant to decided to commit a fraud like any other organisation, it is very difficult either for the regulator or for the Welsh government to detect that."
Dame Gillian also referred to the case of Plas Madoc Communities First in Wrexham. The project's head was jailed last year for stealing £51,000.
The Welsh government must assure itself it is doing the right things when an organisation is "at risk", she said.
"It won't prevent this type of episode happening, but it will diminish the probability of it."
Organisations affected by the decision to withhold Awema's funding because they in turn are funded by the charity could contact the Welsh government which will take a "case-by-case" decision.
Awema receives £8.4m of public money, including European and lottery funding.
A message on the organisation's website says it remains open for business "through all our current troubles".
The internal Awema report recommends Mr Malik and his daughter Tegwen - who also works at the charity - should be "suspended immediately, pending a disciplinary inquiry and hearing".
Both remain in post having received a written and verbal warning.
Awema chairwoman Dr Rita Austin has declined to comment, saying the charity is waiting for the findings of a Welsh government audit.
Committee chairman Darren Millar said there had been three reports into Awema in a decade.
Speaking after Tuesday's meeting, Mr Millar said: "Is this the end of the line for an organisation which is clearly rapidly losing public confidence? I think it probably is."
He added: "There is a sort of pattern emerging, the Plas Madoc situation, this situation with Awema... we seem to have history repeating itself in many respects.
"The Welsh government clearly has questions to answers about the way it manages public funds that are passed on to other bodies.
"It's not just the Welsh government that have to answer questions, it's the other bodies that have funded this organisation."