Welsh economy department 'at significant risk' - audit

A scathing attack on the way the Welsh Assembly Government has run its economy and transport department has been made in the wake of an internal audit.

The Liberal Democrats called the management of Ieuan Wyn Jones' department "a long list of failings and ineptitude".

The Conservatives called the report "disturbing reading".

The assembly government said it had now strengthened procedures and that the information used was out of date.

An internal audit had highlighted management weaknesses exposing the department to "significant risk".

The department, headed up by Ieuan Wyn Jones, the deputy first minister, is responsible for job creation, economic development and transport issues.

On Tuesday, it announced at least 250 civil service jobs would be cut, reducing the number in the department to around 890.

Its own internal auditors assessed the department's running and, according to reports seen by BBC Wales, they identified management weaknesses which they said exposed the department to "significant risk".

They referred to a major risk of "loss, fraud, impropriety, poor value for money, a failure to achieve objectives".

The failings led the internal audit to raise "significant concerns" about the way the department was being managed.

They refused to give a clean bill of financial health to 11 separate areas, including the Technium business incubator project, a trunk road programme and a number of other schemes.

Technium is one of the main projects that appears to have caused concern for the auditors.

Begun in 2001, Technium centres are aimed at helping new science and technology businesses to develop. There are 10 such centres around Wales.

The Technium network that was once a flagship government project is now under review.

There is no specific information about the various failures in the schemes.

First Minister Carwyn Jones has decided that a request from BBC Wales to release the relevant reports following Freedom of Information requests would be "prejudicial to the effective conduct of public affairs".

Opposition politicians have called for the documents to be published in the public interest.

The assembly government's head of corporate governance division said the department "does not have in place a fully effective framework of control" and therefore can only provide a limited assurance on its overall arrangements for risk management, control and governance.

More than half of the 274 recommendations from internal auditors relating to the department were classified as "fundamental" or "significant".

'Checks and balances'

Jenny Randerson AM, Welsh Liberal Democrat economy spokeswoman, said this showed "financial chaos" in the department.

"This damning report is just another in a long list of failings and ineptitude of the minister, and serious questions must be asked about how this department is managed," she said.

"Over the last three years, the one department that should have been at peak performance was economy and transport.

"However, unfortunately for the Welsh economy, this has just not been the case."

The Welsh Conservatives called for the department director to stand aside for the time being.

Shadow economy and transport minister David Melding AM said: "This report makes for incredibly disturbing reading.

"The assembly government's decision to refuse to release the full report under the Freedom of Information Act is unacceptable.

"I urge the assembly government to conduct a full and open investigation into the management failures in the department."

Responding, an assembly government spokesperson said: "This information is now out of date. Since the report was published we have strengthened and substantially improved our internal processes as acknowledged in the latest Annual Assurance Report for 2009/10.

"We have also announced 'Economic Renewal: A New Direction' that radically changes the way we support the Welsh economy.

"A series of additional checks and balances are being adopted to ensure the department delivers this support, together with a comprehensive system of evaluation."

With regard to the Technium network, he said: "A review into the network is under way and due to be completed later this year."

And relating to the FOI disclosure, he said: "The first minister has not refused to disclose the information - he has merely determined that the type of information requested by the BBC falls under Section 36 of the Freedom of Information Act.

"A decision on whether to release the information requested will be made shortly."

Former economic development minister Andrew Davies says the 250 job cuts in the same department could be a "smokescreen" for its failings.

But an assembly government spokesman said: "The date of the restructuring announcement yesterday afternoon had been widely trailed with staff since the economic renewal programme was launched."