Nearly £300,000 owed to the Welsh government by defunct race relations charity Awema has been written off, a senior civil servant told Welsh Assembly Members yesterday.

The Swansea-based All Wales Ethnic Minority Association (Awema) was wound up in February 2012 amid allegations that chief executive Nasir Malik used charity funds to write himself cheques, clear personal credit card debts, pay for a life-insurance policy and buy cat litter. Malik denied and was cleared of fraud in August 2014.

Sir Derek Jones, permanent secretary of the Welsh government, was giving evidence to the Welsh government's Public Accounts Committee yesterday. He said the £282,005.64 write-off was a "substantial loss to the public purse".

He said although the government had made sufficient efforts to recover outstanding funds, it had “learned a few lessons” from the experience.

In the future, the government would “work a bit harder” to “shorten the period of administration” of failing charities, which would reduce outgoing professional fees, he said.

"All the time a liquidation or administration is going on, professional fees are being paid from what remains from the company's or charity's assets”, he said. “Shortening that period of time would protect some of the money."

The committee was hearing evidence on the Welsh Government’s report on grants management in 2014.

According to Jones, administration costs per grant ranged from £45 to £13,843 – a variation of 0.27 per cent to 77.5 per cent.

Jones said the percentage of administration costs for a small grant would always be higher than for a large grant, because of the "need to always undertake the baseline processes".

But committee chair Darren Millar said it was "extraordinary" that a grant programme providing just £58 to an individual would incur an administration cost of £45 - some 77.5 per cent of the grant’s total.

Awema was set up in 2001 to promote race relations in Wales. It was the largest charity of its kind in Wales and received grants from both the Welsh government and the Big Lottery Fund, which were distributed to smaller charities to carry out work.

It was registered as both a charity and a not-for-profit company but lost its charity status and funding after investigations were launched into its finances in late 2012.