The Welsh government has suspended all public funding to the All Wales Ethnic Minority Association (Awema), until an investigation into alleged abuse of charitable funds is completed.
The charity had been awarded £8.4m in public funds to manage three projects under the European aid programme for West Wales and Valleys. The projects aim to improve the employment prospects for ethnic minorities.
But following a damning report into alleged misconduct at the charity, commissioned by former trustees who have since resigned, the Welsh government, the Welsh European Funding Office, and the Big Lottery Fund, have decided to suspend all payments to Awema.
The inquiry report, conducted by Paul Dunn, an independent investigator, lists a number of allegations of misconduct against Awema's chief executive Naz Malik.
These include extracting Awema funds for personal use; making inappropriate sexual remarks; bullying staff and causing a conflict of interest by hiring his daughter.
A Welsh government spokeswoman said: "Having assessed the information received in respect of Awema, the Welsh Government including the Welsh European Funding Office (Wefo), co-ordinating with the Big Lottery Fund, is currently conducting an investigation to ensure the public funding which has been provided has been properly spent and can be accounted for.
"Consistent with the Big Lottery Fund, the Welsh Government and Wefo have suspended all payments to Awema pending the outcome of the investigation. Welsh Government officials have been liaising with South Wales Police regarding the allegations. It would be inappropriate therefore to make any further comment at this time."
According to the BBC, Wefo is holding back £3m from Awema.
Dr Sibani Roy, former vice-chair of Awema, who resigned in protest at the refusal of chief executive Malik to step down, told civilsociety.co.uk that she was very concerned about charities who worked in partnership, and got funding from Awema: “The suspension in funding could be detrimental to these charities. I hope the investigation is conducted as soon as possible.”
Civilsociety.co.uk called Awema and spoke to Tegwin Malik, daughter of Naz Malik, who said the organisation was not commenting until the investigation was completed.
A statement from Awema’s newly-appointed chair Rita Austin on the charity’s website says it has been a difficult time for the charity:
“All the negative publicity in the past few weeks has made this a very difficult time for Awema: difficult for our clients who rely on us to support them as they seek to develop and improve their lives, and difficult for our staff to work through all the disruption,” says Austin.
“The trustees and I have been addressing the issues raised with us by the Charity Commission and our Welsh Government and Welsh European Funding sponsors, and we will continue to address them with vigour. Past wrongdoing has been dealt with and any wrongdoing identified in the future will also be dealt with. But we owe a duty of care to all our staff and we will not betray their confidence no matter how much we want to counter the misinformation which has been put about.
“The Welsh Government Internal Audit team is conducting a review of our internal financial controls and governance and will report in due course. Until the Welsh Government Internal Audit team has reported, we are unable to make any comment on media reports.”
