A Crisis Brewing In Wales
Alison Goldsworthy thinks that the AWEMA scandal could result in uncovering more public funds abuses.
12 Feb 2012, 08:15
Naz Malik: Fraudster?
For weeks, trouble has been brewing in Welsh politics. In January, the Western Mail and BBC led rumblings around the funding of AWEMA (the All Wales Ethnic Minority Association). The charity had received millions of pounds of public funds, yet was engulfed in tales of inappropriate expenditure. In response the Welsh Government commissioned an investigation.
The CEO, Naz Malik, had signed a cheque to himself in excess of £9,000 to pay off a personal credit card. This came on top of strong rumours about Mr Malik’s inflated salary, and that of his daughter. As trustees resigned, staff whistleblew and pressure mounted.
South Wales Police, and the charity commission are now investigating. The Assembly rightly ceased funding the organisation as did the Big Lottery Fund, a joint report from them exposed some shocking misuse of public funds and concluded that they would no longer fund the organisation. Those in control of financial levers will have to justify their decision to continue funding AWEMA after a 2004 Assembly Government report – commissioned after previous concerns were raised - concluded WAG should suspend funding until the charity’s governance issues were resolved. Then in 2007, two trustees resigned notifying the Welsh Government and the Wales European Funding Office of their serious concerns. This is not a pretty tale for those who champion devolution as a way for people to do things in a better way.
Some, have made much of the links between AWEMA and the governing Labour party in Wales, the beleaguered Chair of Trustees who claimed that the crisis was “concerted attempt by powerful institutions to characterise Awema as a corrupt organisation: a time honoured way of debasing and devaluing the contributions of black and minority ethnic people.” She was a former Labour Cllr. Naz Malik had tried to stand for the party several times, and senior Labour figures had been out campaigning with them. Both Mr Malik, and his daughter Tegwen have now had their membership of the party suspended. Those links will doubtless continue to be scrutinised by the press, politicians and more.
That may mean that necessary scrutiny isn’t applied elsewhere. The Charity Commission is the body that regulates charities, they are now investigating AWEMA. The Commission plays an important role in ensuring that public confidence continues to exist in charities, and that when people donate money, it is used appropriately. Yet in 2009, the Head of the Charity Commission in Wales, Harry Iles, made an extraordinary admission in an interview with the trade magazine Third Sector:
He admits that Wales's 9,000 charities, mostly small, have a patchy compliance record. But he is hoping that his team's multi-faceted efforts to address that failing will soon see the average time it takes charities to submit their due documents become shorter in Wales than in England. "Well, you have to have an aim, don't you?" he laughs
To me compliance isn’t a laughing matter, and it shouldn’t be patchy. Yes the burden on small charities with paperwork can be difficult, but it isn’t an aim. It’s necessary.
There have been suggestions from others that Welsh public life has issues with governance, that other aspects may need to be looked at. The questions and implications of the last few weeks may end up going wider than Awema.
Comments (4)
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You have this exactly right. But another issue is that so called ‘charities’ are little more than another arm of Welsh Government. If you go to the accounts lodged with the Charity Commissioner, and look to see how much charities in Wales raised on their own, and how much they got in grants from WG, you find that many of them were almost exclusively funded from the public purse. Funding charities this way means there is too much political control of what gets funded, and as with AWEMA, that financial scrutiny is poor. But worse than that, giving money for the asking breeds entitlement mentality. I could be wrong, but apart from filling grant applications, shaking tins once a year, and clogging up the high street with charity shops, charities in Wales appear to make very little effort to raise money. Perhaps they could do something other than selling old clothes and begging?
13/02/2012 09:32Lots of charities in Wales do lots of innovative fundraising. Just look at the plethora of events that people put on every weekend - but like all walks of life, some are better than others. And some causes are easier to fundraise for than others (domestic abuse charities being amongst the most difficult). I think it's very unfair to suggest they just sell old clothes and do begging!
On the statutory/voluntary income mix you've hit the crux of a big issue. Charities are often the best placed to provide a service. But in winning contracts become dependent on Govt funding, and thus it can be harder to criticise them. Not always, but it's one the third sector and Government's of all colours and at both ends of the M4 are wrestling with.. answers on a postcard.. a very large one.
13/02/2012 21:08If charities in Wales could broaden their horizons past fun-runs and fetes, they might not have to go cap in hand to the taxpayer. What's wrong with commercial activity to fund charitable purposes?
14/02/2012 11:12This is the sort of initiative they should be trying.
http://www.walesonline.co.uk/news/wales-news/2012/02/13/cardiff-prison-to-open-a-fine-dining-restaurant-staffed-by-offenders-called-clink-91466-30323034/
14/02/2012 14:07