Welsh Government Faces Backlash After Encountering Costly Grant Giving Mistakes

Grant funding is a very complex and time-consuming process that requires meticulous detail-oriented attention at every step of the way. Most would agree with this from a grant seeker perspective but few think about the process behind the actual giving of the grants; especially government grants. When processes are not adequately put into place that enforce proper regulation and disbursement of these funds, mistakes can happen. When you are dealing with millions or sometimes billions of dollars in funding being disbursed, these mistakes have to be prevented as much as possible or properly handled once they occur.

One such issue came up in Wales, who after rigorous internal investigations and audits realized that their grant disbursed to failed steel firm Kancoat cost the Welsh government a total of 5 million British pounds, making it a massive mistake within the governmental grant system. If due diligence into the company had been done and listened to before the disbursement of the funds and grants being awarded to Kancoat these issues could have been avoided. This applies to organizations funding and disbursing grants worldwide.

A senior civil servant was even quoted mentioning ahead of the investigation that the investment panel that recommended Kancoat receive the support got the decision wrong and “should have never awarded the grant”. The reasoning behind this statement was that Kancoat had had several business structure issues and presented a weak business plan raising red flags within the grant approval process. This information seems to have been ignored by the Welsh government in order to make their final funding decision and seems to be a systematic ongoing issue, as stated by a conservative economy spokesman named Russell George who stated that this was “one of a long line of failings by Welsh government to adequately monitor the spending of public money.”

Issues like this are commonplace in some municipalities. Therefore, increased security measures in order to prevent fraud and misassignment of grant funding to undeserving or fraudulent entities need to be adopted. If these measures are adopted throughout all grant giving foundations, including and most importantly government entities, the entire grant community will benefit. In the US, federal grant money is closely monitored and appropriated to deserving foundations or individuals. However, the federal government has also put into place a method to help fight fraudulent activity. This has been done through the establishment of independent units within each government agency in charge of tackling any fraud or misappropriation of funding challenges. These units can later escalate these issues to the FBI if they deem necessary, and in turn help decrease the rate of fraud or mistakes as much as possible. The goal of the grant community should always be to appropriately fund grants to well deserving organizations, and any new measures that help reach that goal should be welcomed by all grant funding teams.

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