This report seeks to answer two questions: Did Cymad misuse public funds? And, did the public bodies in Wales effectively manage public funds paid to Cymad, in the period after 1 April 2003?
In answer to the first question, we concluded that Cymad did not adequately control much of the public funding that it received and could not account for some of the public funding that it was awarded. In some cases, the company had also overcharged the funding bodies, but there was no evidence that it deliberately misused public funds.
In our view, these problems arose mainly from poor understanding of the stringent rules governing EU funding and weak financial management within the company.
In answer to the second question, we concluded that the public bodies in general managed public funding in Cymad effectively, although there were administrative
weaknesses in some public bodies which meant that they did not become aware of the problems in Cymad until the allegations were made in 2006. Funding criteria and contracts were generally robust but contract terms could have been stronger in some respects, especially to require the disclosure of suspected fraud by officials of the recipient body.