Auditors are being called on to investigate circumstances which lead to receivers being called in to the Cwmni Clydach Development Trust.
The Trust, which was responsible for the running of Forge Fach Community Resource Centre, went into administration last September, after running up losses in the ‘tens of thousands of pounds’.
Swansea Council has taken over the temporary running of the Forge Fach from the trust, which was run by a board of volunteer directors,
Last week, it was revealed the Welsh Government is looking to claw back funding it provided to the trust, although creditors are likely to be disappointed, according to liquidators.
Now, Conservative AM Byron Davies has called in the auditors to investigate what went wrong at the Forge Fach Resource Centre in Clydach, and has written to Welsh Auditor General Huw Vaughan Thomas expressing concerns over the management of almost £1.8million in public money to set up Forge Fach, including £1.2m from the Objective One fund administered by Welsh Government; £400,000 from the Local Regeneration Fund via Swansea Council; £95,000 from Clydach Community Council and £74,000 from the Sports Council for Wales.
He said: “This raises serious concerns about the initial investment, the long term monitoring of the trust and the broader points about mismanagement of public funds.”
The Auditor General said he has yet to receive the letter, but a Welsh Government spokesman said: “At this time we are seeking to claw back Welsh Government funding from the liquidators. We are continuing to help the most disadvantaged people in Swansea through a number of schemes. including our Communities First Programme where we are investing £7 million up until March 2015.”