August Forestry Commission Wales Public Funding of Ffynone and Cilgwyn Woodlands

Transcription

1 357A Ffynone Woodlnds report - pv5:lyout 1 09/08/ :12 Pge 1 August Forestry Commission Wles Pulic Funding of Ffynone nd Cilgwyn Woodlnds

2 Forestry Commission Wles Pulic Funding of Ffynone nd Cilgwyn Woodlnds I hve prepred this report for presenttion to the Ntionl Assemly for Wles under the Government of Wles Act The Wles Audit Office study tem tht ssisted me in prepring this report comprised Json Blewitt, under the direction of Ceri Strdling. Gillin Body Auditor Generl for Wles Wles Audit Office 24 Cthedrl Rod Crdiff CF11 9LJ The Auditor Generl for Wles is totlly independent of the Ntionl Assemly for Wles nd Welsh Assemly Government. She exmines nd certifies the ccounts of the Welsh Assemly Government nd its sponsored nd relted pulic odies, including NHS odies in Wles. She lso hs the sttutory power to report to the Ntionl Assemly for Wles on the economy, efficiency nd effectiveness with which those orgnistions hve used, nd my improve the use of, their resources in dischrging their functions. The Auditor Generl for Wles lso ppoints uditors to locl government odies in Wles, conducts nd promotes vlue for money studies in the locl government sector nd ssesses complince with sttutory improvement requirements. However, in order to protect the constitutionl position of locl government, she does not report to the Ntionl Assemly for Wles specificlly on such locl government work, except where required to do so y sttute. The Auditor Generl for Wles nd her stff together comprise the Wles Audit Office. For further informtion out the Wles Audit Office plese write to the Auditor Generl for Wles t the ddress ove, telephone , emil: wles@wo.gov.uk, or see we site Auditor Generl for Wles 2010 You my re-use this puliction (not including logos) free of chrge in ny formt or medium. You must re-use it ccurtely nd not in misleding context. The mteril must e cknowledged s Auditor Generl for Wles copyright nd you must give the title of this puliction. Where we hve identified ny third prty copyright mteril you will need to otin permission from the copyright holders concerned efore re-use.

3 Report presented y the Auditor Generl for Wles to the Ntionl Assemly for Wles on 17 August The funding to Clon met the high-level grnt scheme conditions, ut the scheme criteri nd procedures for reviewing pplictions were not sufficiently roust, incresing the risk tht this significnt pulic investment my not e sfegurded.

4 Contents Summry 5 Recommendtions 7 Min report 8 The project met the high-level conditions for EU funding ut weknesses in the specific requirements of the Cydcoed scheme incresed the risk tht the pplicnt would not truly represent the community 8 Some Cydcoed procedures were lcking nd some of those in plce were not roustly pplied, resulting in the pprovl of n ppliction tht filed to stisfy ll scheme requirements or to fully mitigte risks to sustntil pulic investment 10 Progress ginst trgets nd intended outcomes is currently uncertin 14 4

5 Summry 1 Forestry Commission Wles (FCW) provides grnts to third prty orgnistions under vrious progrmmes to help in delivering the ojectives of the Assemly Government s Woodlnds for Wles strtegy. 2 Some of these progrmmes re funded from Europen Union (EU) schemes dministered y the Welsh Europen Funding Office (WEFO), some y Europen Agriculturl Fund for Rurl Development nd others funded from the Assemly Government s nnul resource lloction. 3 Between 2003 nd 2008, FCW initited nd operted the Cydcoed II Progrmme (Cydcoed) which supported community groups in improving locl woodlnds nd people s lives through: c d providing new jos nd opportunities; empowering communities; promoting helthy recretion, eduction nd conservtion; nd improving nd creting woods. 4 The Cydcoed progrmme trgets the most deprived communities in Wles nd those where there is limited or no ccess to community green spce. In these communities the progrmme ims to: mke existing woodlnd spces more ccessile; 5 The progrmme offered grnts of up to 100 per cent of costs to community groups in the Europen Ojective 1 region helping them to use woodlnd res for community development. Cydcoed, with 12 million funding from the EU under Ojective 1 nd the Assemly Government, ws lunched in Jnury 2003 running until Septemer FCW sumitted its finl ppliction to WEFO for the Cydcoed scheme on 28 Jnury It included detiled project description with key ims, priorities nd mesures. 7 WEFO pproved the ppliction in n offer letter dted 30 Jnury 2003, wrding n Ojective 1 grnt totlling some 4.2 million ginst eligile expenditure of 13.7 million to e drwn down over the period of the progrmme. The Assemly Government s Pthwys to Prosperity scheme ws ville to meet the lnce of eligile expenditure. Applicnts were therefore le to drw upon funding of up to 100 per cent of their eligile costs. 8 Ffynone nd Cilgwyn Woodlnds re in North Pemrokeshire. In July 2006, Clon yn Tyfu Cyf (Clon), workers co-opertive nd compny limited y gurntee, sumitted full Cydcoed ppliction to FCW. In Septemer 2006, FCW pproved grnt of 502,000, pying it in two instlments in Octoer nd Novemer c develop dditionl woodlnd spces; nd foster community involvement in the sustinle development of woodlnds. 5

6 9 Clon susequently received pprovl for n dditionl 236,177 for improvement works under the Better Woodlnds for Wles grnt scheme. These funds re pid to Clon s work is completed in line with n pproved mngement pln. Introduced in 2007, Better Woodlnds for Wles replced the UK-wide Woodlnd Grnt Scheme nd supports woodlnd improvements. The Assemly Government nd Europen Agriculturl Fund for Rurl Development fund Better Woodlnds for Wles nd its criteri re clerly ligned to the ojectives of the Woodlnds for Wles strtegy. We exmined Better Woodlnds for Wles s prt of our vlue for money report on the Opertions of the Forestry Commission Wles pulished in The recommendtions of tht report still pply nd we will e following up progress during We udited the EU Structurl Funds grnt clims for Cydcoed for to In line with the stndrd requirements of such clims, the udit ws limited to ensuring tht expenditure: c d complied with WEFO s offer letter; ws eligile, s per the offer letter; hd een defryed 1 ; nd excluded VAT. 11 We were not required to review the procedures nd underlying guidnce for the Cydcoed scheme. The udit confirmed complince with WEFO s requirements excepting tht pplicnts hd not defryed expenditure efore the wrd of the grnt y FCW. We reported this vrition to WEFO lthough we understood tht WEFO ccepted this filure to comply with the requirement due to the nture of the Cydcoed scheme (grnts to smll community groups without resources to mke lrge pyments to third prties prior to eing wrded the grnts). 12 In Jnury 2009, the Assemly Government s Structurl Funds Audit Tem reported on review of the governnce of Cydcoed including review of pproprite internl procedures. This review ws fter Cydcoed hd ended in Novemer The review tested smple of Cydcoed pplictions nd identified no significnt issues. There is no evidence tht the review tem looked specificlly t Clon s ppliction. 13 In July 2009, we were pproched y memers of the locl community nd the Chir of the Petitions Committee of the Ntionl Assemly sed on similr correspondence the committee hd received. In summry, the min concerns were tht there were serious filings in connection with the grnt wrd to Clon such s: c the wrding of grnt designed for community groups to privte compny without community consulttion prior to the grnt wrd; much of the informtion provided to support the funding id ws knowingly misleding, misrepresenttive nd inccurte; nd the grnt process lcked trnsprency. 14 In response to these concerns we hve exmined whether the wrd of pulic funds y FCW to Clon ws pproprite, imprtil nd in ccordnce with the greed criteri. The Director, FCW lso expressed his egerness for these concerns to e exmined independently. 1 Defryed expenditure is expenditure tht hs een pid. 6

7 15 We hve concluded tht the funding to Clon met the high-level grnt scheme conditions, ut the scheme criteri nd procedures for reviewing pplictions were not sufficiently roust, incresing the risk tht this significnt pulic investment my not e sfegurded. We cme to this conclusion ecuse: c the project met the high-level conditions for EU funding ut weknesses in the specific requirements of the Cydcoed scheme incresed the risk tht the pplicnt would not truly represent the community; some Cydcoed procedures were lcking nd some of those in plce were not roustly pplied, resulting in the pprovl of n ppliction tht filed to stisfy ll of the scheme requirements or to fully mitigte risks to sustntil pulic investment; nd progress ginst trgets nd intended outcomes is currently uncertin. Recommendtions 16 FCW should work with Clon to explore options for: greter community involvement in decision mking for the woodlnd to include community representtion on Clon s ord eg, s non-executive directors; nd longer-term protection of the sset for the locl community nd pulic purse. 18 All FCW stff should e required to complete n Annul Declrtion of Interest form which should e reviewed nd uthorised y Mngement Bord memer to ssess implictions for future res of working. Stff should e required to updte these during the yer when pproprite circumstnces rise. 19 Guidnce should e provided to stff on periodic sis on the requirements for Declrtions of Interest nd for Gifts nd Hospitlity to ensure stff remin wre of their responsiilities. 20 Building on the recommendtions rised in the Wles Audit Office s ntionl report, FCW should ensure tht ll stff re given pproprite risk mngement trining on periodic sis. 21 FCW should ensure monitoring rrngements for the Cydcoed scheme re more roustly pplied in the future. 22 Trgets set for future schemes should e roust nd chllenging to ensure tht pproprite vlue to the pulic purse is otined from funds wrded. 23 FCW should ensure tht risk rtings for Better Woodlnds for Wles pplictions received pre April 2008 re reviewed nd updted within the Better Woodlnds for Wles system to ensure the risk rtings re relevnt rther thn t defult of low. 17 FCW hs cknowledged need for more roust project mngement of grnt schemes using PRINCE2 2 methodology. Building on this methodology, FCW should ensure tht processes re in plce to provide ssurnce tht these procedures re eing pplied effectively for ll new nd existing schemes t the erliest opportunity. 2 PRINCE2 is n industry stndrd generic, project mngement method tht cn e tilored to specific projects. 7

8 Min report The project met the high-level conditions for EU funding ut weknesses in the specific requirements under the Cydcoed scheme incresed the risk tht the pplicnt would not truly represent the community The grnt to Clon met the high-level conditions for EU funding 1.1 FCW s ppliction to WEFO for Cydcoed set out the high-level criteri nd ojectives of the scheme. WEFO pproved the ppliction for eligile expenditure of 13.7 million nd wrded grnt of 4,210,077. The offer letter from WEFO descries the eligiility criteri, nd in prticulr, sets out items of expenditure ineligile for grnt. 1.2 In July 2006, Clon sumitted full Cydcoed ppliction to FCW for 502,000 to support the purchse of Ffynone nd Cilgwyn woodlnds. FCW pproved the ppliction in Septemer 2006 with grnt eing pid in two instlments in Octoer nd Novemer As the expenditure ws for the purchse of woodlnd nd in North Pemrokeshire (within n Ojective 1 re), the grnt met the high-level requirements of the WEFO offer letter for EU funding. The grnt to Clon met the Cydcoed scheme conditions ut the definition of community group ws not clerly specified 1.4 FCW produced numer of guidnce notes for use y potentil pplicnts nd internl procedures for use internlly y its stff. This guidnce stted tht FCW would not offer grnts to unitry uthorities, government gencies, Wles-wide non-governmentl orgnistions, profit-mking orgnistions or individuls. It required tht ll community groups receiving Cydcoed funds hve forml structure nd stted ojects. As minimum, the group must hve forml constitution. In some cses we will sk for the community group to e incorported. However, in no documenttion did FCW clrify wht it considered community group ginst which to ssess grnt pplictions s it deliertely wnted to ttrct rod rnge of pplicnts. FCW deemed Clon to e n eligile community group on the sis tht it is not-for-profit orgnistion, limited y gurntee nd sed in the locl community. 1.5 Therefore, Clon, privte compny, in common with ll other pplicnts, ws le to otin 100 per cent funding for the purchse of the woodlnd without contriuting ny of its own funds or shring in ny risks. 8

9 1.6 In ddition, it hs ccess to further funds through the sle of timer on the lnd nd through dditionl pproved grnt funding vi the Better Woodlnds for Wles scheme. Clon s ppliction sttes tht its intention is to reinvest surpluses otined ck into the woodlnd. 1.7 We hve seen no evidence to suggest tht Clon s commitment to reinvest in the woodlnd is not eing dhered to. However, whilst its rticles of ssocition specify Clon s eing not-for-profit orgnistion, this does not prevent the pyment to its owners of resonle remunertion nd onuses. As the compny only hs to sumit revited ccounts to Compnies House, it is not possile to review how much income generted y the compny hs een reinvested into the woodlnds. Project risks were incresed ecuse the scheme criteri llowed Clon to seek sufficient community involvement fter the grnt ws wrded 1.8 FCW s pproved ppliction to WEFO for Cydcoed funding sttes tht Cydcoed ws designed to support community groups nd it requires tht ll people in the community should e le to enjoy woodlnds. All people in the community should e le to prticipte in decision mking out how they re used, nd in their cretion, improvement nd mngement. 1.9 FCW issued supporting guidnce to Cydcoed pplicnts, which provided further informtion to help completion of ech section of their pplictions. The guidnce on community prticiption nd support sttes tht you must demonstrte tht the project meets the spirtions of locl residents for their community nd tht they re prticipting in the project or tht it includes work to gther more evidence or support nd generte more prticiption Clon s ppliction provides no evidence of community support t the time, ut sets out ctivities tht it intended to undertke to ensure community support nd prticiption in the future. In ddition, Clon s ppliction ctully highlights n expecttion of some locl resistnce to its plns There ws no pulic consulttion prior to the grnt wrd nd FCW did not verify the extent of ny locl support efore pproving the ppliction. However, letters of support were lter received from four groups, mostly sed in West Wles The Cydcoed Progrmme Mnger hs ccepted tht the lck of pulic consulttion ws fundmentl error nd stted tht this omission hs een fully nd openly cknowledged In 2008, FCW commissioned n independent consultnt to review the project following concerns rised y the locl community out their lck of involvement. The cost of this consultncy ws 8,000 which ws lso pid from the Cydcoed udget The consultnt concluded tht overll there ws division of opinion, with the wider community less concerned with the works in the woodlnd, provided they remined le to wlk there. Conversely, mny of those living close to the woodlnd re unhppy with the works tht hve tken plce. For these respondents there ws perceived lck of communiction nd trnsprency from Clon, s well s FCW, in mny instnces nd they felt tht they hd not een effectively consulted or engged. We understnd tht whilst ttempts hve susequently een mde to engge with the locl community these hve not proved prticulrly successful. 9

10 1.15 As workers co-opertive, Clon s memership is limited to workers only nd decisions regrding the mngement of the woodlnd re limited solely to the compny s Mngement Bord, which consists of only three people. Therefore, whilst the locl community my e consulted on decisions in the future, it is ultimtely unle to influence the outcome to the sme extent s n elected community group. Some Cydcoed procedures were lcking nd some of those in plce were not roustly pplied, resulting in the pprovl of n ppliction tht filed to stisfy ll scheme requirements or to fully mitigte risks to sustntil pulic investment Procedures were in plce ut were indequte for ensuring independence, evidentil support of pplictions, risk mngement nd the future protection of funding Forml procedures for ensuring independence were in plce for senior mngement in FCW, ut were not pplied to project officers 1.16 Memers of the pulic hve expressed concerns regrding the imprtility nd independence of the project officer ssigned y FCW to ssess, process nd monitor the Clon grnt ppliction. In ddition, further concerns hve een rised regrding Clon s offer to provide the officer with trining course t price elow its usul mrket rte We hve seen emil correspondence, which suggests closeness etween the two prties. FCW mintins tht the project officer hd notified his line mnger nd other grnt tem memers of his previous working reltionship efore he ecme more involved with the ppliction. There is, however, no forml evidence of this declrtion Cydcoed procedures nd guidnce specified tht project officers should work with community groups to help in the preprtion of funding ids. However, there ws no guidnce on the pproprite level of ssistnce tht should e provided to demonstrte equity to pplicnts. In ddition, whilst project mnger ws in plce, there is no evidence of independent review to ensure tht the level of ssistnce provided ws pproprite for specific pplictions We hve found no evidence tht the project officer concerned hd nything other thn professionl reltionship with Clon, uilding upon his previous contcts. However, we elieve tht the sence of forml procedures governing independence t the time exposed FCW to unnecessry risks. It hs register of interests for its Mngement Bord memers. However, until recently there ws no similr rrngement for its wider stff se. FCW hs now introduced register for Grnts nd Regultions stff In ddition, there is evidence tht the procedures in plce for gifts nd hospitlity hve not een followed. FCW hs Gifts nd Hospitlity Policy for stff which specifies tht: All offers of gifts nd hospitlity (except minor gifts detiled elsewhere in the policy) whether ccepted or not, must e recorded in writing y the officer concerned. Reporting or recording the offer/cceptnce of isolted gifts of trivil chrcter such s pens, or minor sesonl gifts such s diries or clendrs, is not required. But ll other offers of gifts must e recorded, whether ccepted or not. 10

11 1.21 The project officer did not formlly record Clon s offer of trining course s required y the Gifts nd Hospitlity Policy. In ddition, there is no evidence tht the project officer notified the offer to n pproprite line mnger. We hve confirmed tht the offer ws not ccepted. Procedures did not require FCW officers to ensure tht funding pplictions were supported y pproprite evidence 1.22 Although the Cydcoed procedures do not require project officers to verify nd sustntite sttements mde y pplicnts in their ids, we understnd tht FCW crries out verifiction in most cses. FCW hs, however, confirmed tht no such verifiction ws undertken in the cse of Clon due to the lnd purchse nture of the ppliction Concerns hve since een rised y memers of the pulic regrding some of the sttements mde y Clon in its ppliction. These include Clon s previous woodlnd mngement experience nd its filure to otin pproprite plnning permissions efore proceeding with works FCW mintins tht Clon s sttements out woodlnd mngement experience nd plnning consents did not ffect the wrding of the grnt s the ppliction ws solely for the purchse of the woodlnd nd did not cover ny future works to e performed Given the size nd nture of the ppliction, we consider tht relevnt experience should hve plyed prt in determining the eligiility of Clon s id. It is disppointing tht no forml checks were undertken or references otined FCW s the grnt wrding ody of 502,000 of pulic money hs role to ensure pproprite checks re in plce prior to the wrding of funds. More roust scrutiny could hve identified potentil issues with the project nd llowed risks to e mnged more effectively. Both corporte nd project risk mngement procedures were underdeveloped 1.27 Our ntionl vlue for money study on the Opertions of the Forestry Commission Wles pulished in Novemer 2008 referred to need to improve the risk mngement culture cross the orgnistion The Cydcoed scheme pre-dted tht report nd the risk mngement rrngements reflect the underdeveloped culture in plce t the time. Specificlly, for the Cydcoed scheme there ws limited risk mngement guidnce ville to officers The risk ssessment ws prepred y the project officer ssisting Clon in the preprtion of its funding id. There is no evidence of n independent review y nother officer to ensure tht the ssessment ws roust nd ll potentil risks tken into ccount The risk ssessment ws extremely sic nd rief nd contined wht we consider n inpproprite risk rting ( moderte ) for grnt ppliction of the nture nd size of Clon s However, ecuse Clon s ppliction ws over 250,000, the Cydcoed grnts tem esclted it to delegted group of FCW s Mngement Bord for review nd pprovl in ccordnce with Cydcoed procedures. This provided compensting control lthough we hve found further issues regrding the roustness of this process s set out in prgrphs 1.42 nd

12 The terms of the contrct greed with Clon were not sufficiently specific to protect the pulic funding wrded nd the community use of the woodlnd t the end of the project 1.32 A stndrd contrct ws in plce for pproved Cydcoed pplictions tht required pplicnts to comply with the terms nd conditions of the scheme for period of 10 yers (or 20 yers for lnd purchses) Contrcts stte tht lnd must e used for the purposes descried in the id for period of 20 yers nd tht non-complince with the terms nd conditions my result in the repyment of ll or prt of the grnt. However, FCW did not tilor the stndrd contrcts to the specific circumstnces of Clon. In prticulr, mny of the terms nd conditions were not relevnt for lnd purchses nd therefore those needing to e met were limited In ddition, the stndrd contrct greed with Clon provides incomplete sfegurds to protect the pulic investment in the following res: There re no further restrictions plced on pplicnts eyond 20 yers. As such, there is no gurntee of community use of this sset eyond this dte. We understnd, however, tht Clon hs mde commitment to dedicte the site under Countryside nd Rights of Wy (CRoW) 3 which should llow pulic ccess to the woodlnd in perpetuity. Should Clon go into dministrtion, there is no protection for the pulic ownership of the woodlnd, wekness cknowledged y FCW in pulic meetings held with the community. c Whilst contrcts require repyment of grnt funds should the sset e sold within the 20-yer period, contrcts do not provide ny cluses regrding restrictions on ny future sles proceeds which could e mde on the sle of the sset. As such, Clon, nd its memers, could profit significntly from future sle with no compenstion to the pulic purse. Procedures in plce to ssess grnt pplictions, risk nd vlue for money were not roustly pplied Specific evidence of vlue for money ws not otined s this is seen y FCW s implicit in the ppliction 1.35 Cydcoed guidnce required pplicnts to provide evidence of vlue for money eing otined. FCW did not undertke vlue for money ssessment of Cydcoed projects for individul pplictions or in comprison with other vlid Cydcoed pplictions We re prticulrly concerned out FCW s filure to commission n independent lnd vlution to confirm the resonleness of the vlution of the lnd or to verify the independent vlution otined y Clon from Chrtered Forester vi FCW s own qulified vluers. FCW hs overpid grnt to Clon y 6,000 y not dequtely pplying its own procedures 1.37 Cydcoed guidnce sttes tht FCW will fund the cost of uying lnd, including woodlnd up to mrket vlue determined y n independent qulified vluer. 3 The Countryside nd Rights of Wy Act 2000 pplies to Englnd nd Wles only. The Act provides for pulic ccess on foot to certin types of lnd, mends the lw relting to pulic rights of wy, increses mesures for the mngement nd protection for Sites of Specil Scientific Interest (SSSI) nd strengthens wildlife enforcement legisltion, nd provides for etter mngement of Ares of Outstnding Nturl Beuty (AONB). 12

13 1.38 An independent vlution ws otined y Clon, which vlued the woodlnd t 6,000 less thn the sle price. However, FCW pid the grnt sed on the sle price, nd not the independent vlution s required under its procedures. Therefore, FCW overpid the grnt to Clon y 6,000. Project ssessment rrngements were not roust 1.39 FCW estlished sugroup of the Mngement Bord to ssess pplictions over 250,000. The sugroup consisted of four Heds of Service who were memers of the FCW Mngement Bord Consequently, the Cydcoed grnts tem esclted Clon s ppliction to the sugroup for review nd pprovl. However, the sugroup did not meet to discuss the ppliction nd ll correspondence ws undertken vi emils etween the four memers of the tem This pproch did not llow sufficient scrutiny, fct tht FCW cknowledges. FCW hs stted tht future projects will follow the PRINCE2 methodology nd hs forml project ord in plce to meet regulrly. The Mngement Bord sugroup identified risks tht were not fully ddressed efore project pprovl 1.42 The Mngement Bord sugroup identified numer of concerns/risks s prt of its review of Clon s ppliction. However, these risks were not dequtely ddressed efore pprovl of the ppliction. The issues rised y the Mngement Bord sugroup include: The potentil future disposl of the sset nd need for pproprite sfegurds in the contrct with Clon. The project officer indicted tht Clon s rticles of ssocition cover this point. His response ws ccepted ut the filure to del with this risk in the contrct ws fundmentl wekness. Whether the grnt provides vlue for money. Other thn relying on the vlution otined y Clon, no vlue for money ssessment (ctul or reltive to other pplictions) ws undertken. No follow-up y the Mngement Bord on this issue is evident. c The need for FCW to otin n independent vlution of the woodlnd s required y Cydcoed procedures either externlly or vi FCW s own qulified lnd gents. We hve highlighted previously FCW s filure to secure its own independent vlution. The Mngement Bord sugroup susequently ccepted the independent vlution otined y Clon If the sugroup hd followed up its concerns, severl of the fundmentl risks tht hve since mterilised my hve een ddressed nd mnged erlier in the ppliction process. FCW did not define its specific requirements nd ccepted n indequte usiness pln s meeting the specil condition of grnt 1.44 As specil condition of the grnt wrd, FCW required Clon to sumit usiness pln y 31 Mrch Whilst Clon met the dedline, FCW deemed the pln to e indequte nd required Clon to prepre more roust pln. The pln ws sumitted to FCW in erly However, FCW did not define specificlly wht it required in the form of usiness pln. It ccepted Clon s first sumission s meeting the grnt condition y the required dte, despite this pln originlly eing indequte. 13

14 In common with other EU schemes, there ws pressure to mintin the Cydcoed expenditure profile, ut there is no direct evidence tht this influenced the pprovl of Clon s ppliction 1.46 WEFO s grnt offer letter emphsises the need for FCW to spend its grnt lloction or risk losing the funding wrded. This is stndrd requirement cross ll schemes Memers of the pulic hve rised concerns tht this offer letter plced pressure on FCW to mintin the udgeted position ginst the greed WEFO funding profile. They contend tht s the Clon ppliction represented lrge nd reltively strightforwrd trnsction (lnd purchse) tht could e quickly processed, it ws looked upon fvourly to mintin the udget profile. In prticulr, they refer to n underspend of round 700,000 s t Novemer 2008 s pulished on the FCW wesite As FCW monitored the Cydcoed udget on rolling sis, there is now no specific udget informtion ville for us to review. We re unle to confirm whether there were specific pressures to mintin the position ginst the funding profile t the time of Clon s id However, we hve seen correspondence from the Cydcoed Progrmme Mnger dted 7 August 2007, which stted s mny projects re flling ehind in their progress, the rte of Cydcoed grnt spend is well elow tht predicted to our funders. If slippge continues, we risk hving the overll mount of grnt reduced There ws therefore pressure to mintin Cydcoed expenditure in line with the profile greed with WEFO to prevent FCW losing grnt funding. Clon s ppliction in Septemer 2006 represented the lrgest grnt within Cydcoed nd it ws processed reltively quickly. This, long with the lck of roust scrutiny descried previously, could suggest tht the ppliction ws treted fvourly. FCW officers hve, however, strongly rejected ny suggestion tht the ppliction ws purposely processed in hste or without due considertion. Progress ginst trgets nd intended outcomes is currently uncertin FCW is now monitoring Clon s performnce ginst greed Cydcoed trgets nd outcomes, ut to dte the results re uncertin 1.51 There ws no requirement from WEFO to monitor trgets nd long-term enefits eyond the end of the scheme. FCW hs referred to lck of guidnce nd dditionl finncil support from WEFO to fcilitte monitoring eyond the end of the scheme. In prticulr, whilst WEFO keenly monitored finncil nd out-turn trgets during the grnt period nd required completion report to finlise the scheme, there ws no requirement to monitor outcomes or trgets fter the scheme ended, this eing left to the discretion of grnt recipient orgnistions FCW hs put in plce its own rrngements to monitor individul grnts wrded to ensure complince with trgets set nd terms nd conditions included in the contrct. In prticulr, FCW hs specified in Cydcoed 14

15 contrcts tht grnts will e monitored for period of 10 yers from completion (20 yers in the cse of lnd purchse pplictions) to ensure tht terms nd conditions set out in the contrct including greed trgets re dhered to FCW s project completion report on Clon sets out schedule for monitoring to e undertken every two yers from 2008 to This does not, however, cover the full 20-yer period FCW hs set for lnd purchse pplictions. FCW hs since tken ction to correct this dministrtive oversight Grnt pplictions were required to include trgets nd long-term enefits ginst which outputs nd outcomes could e monitored. The guidnce issued to pplicnts for completion of the ppliction stted tht pplicnts should mke long-term enefits simple nd esy to monitor. The trgets set for this ppliction reflect this: c d free pulic ccess to the woodlnd; Woodlnd Mngement Pln in plce nd eing implemented; ccess pths nd routes in plce nd eing mintined; nd woodlnd usiness developing It is our view tht, given the level of funding nd chrcteristics of this grnt, the trgets nd long-term enefits should hve een roust nd chllenging s well s eing just simple nd esy to monitor. In response, FCW rgues tht the Cydcoed EU nd Assemly Government funded cpitl progrmme ws time-limited, s ws the tem estlished to deliver it nd tht it ws known from the outset tht ll susequent monitoring would need to e undertken y existing FCW stff s n extr tsk. As result, it ws plnned tht the system would e s strightforwrd s possile, mking it more likely to e done FCW hs commenced its monitoring progrmme nd hs covered six Cydcoed grnts to dte, including Clon. As Clon s grnt ws the lrgest in the Cydcoed scheme, the monitoring of this grnt ws prioritised nd undertken first in Ferury An independent contrctor crried out the monitoring on FCW s ehlf. This contrctor is currently on FCW s list of pproved Better Woodlnds for Wles Mngement Plnners nd is n pproved contrctor for inspection of Better Woodlnds for Wles schemes. FCW hs informed us tht it outsourced this work due to stffing shortges ut tht FCW stff will monitor the mjority of Cydcoed grnts Despite the fct tht the contrctor hd no previous experience of the scheme, FCW did not provide ny specific guidnce on how to record the monitoring work. In ddition, FCW hs confirmed tht it hs not reviewed the work undertken to ensure tht the stndrd is consistent with tht normlly expected for scheme monitoring. However, FCW hs reviewed the monitoring report provided y the contrctor The monitoring report itself is rief nd does not clerly link to the trgets set for Clon. Consequently it does not provide conclusion either on ech individul trget or overll. FCW s review of this first inspection recognised this filing nd it hs tightened up the process nd developed new inspection proform. 15

16 1.60 The contrctor s report mkes some comments tht do not pper to support view tht Clon hs so fr met its trgets. In prticulr, the report mkes the following comments in reltion to ccess: It ws noted tht despite significnt injection of pulic funding nd the sttement tht incresed ccess for the community nd disled ws prt of the usiness pln, there ws no signge t ny of the entrnces to inform the pulic of the fcility or the fct tht it ws supported y pulic funds. Interprettion pnels nd wy-mrkers were not evidenced. A pulic footpth hd een locked y wind-lown trees on the edge of one of the clerfell sites nd this hd not een reopened despite the dmge hving tken plce some time go In ddition, the report ppers to cover some elements relting to the Better Woodlnds for Wles scheme. It refers to significnt clerfell nd significnt element of trck uilding nd upgrding which pper to hve een done to high stndrd nd permits lorry ccess to mny res of the property. This clernce work does not pper consistent with Clon s comments in its ppliction, which stted with input of lrge grnt to help purchse the woodlnd, the need to generte vst quntities of csh to service lons would e reduced or eliminted llowing much gentler clernce opertion to e implemented FCW considers tht Clon is meeting its trgets to dte nd tht issues such s one locked pth does not constitute significnt restriction to free ccess nd tht the degree of clerfell reflects woodlnd opertions set out in the susequent Better Woodlnds for Wles Mngement Pln In our view, it is still inconclusive from the report tht the Cydcoed trgets to dte hve een met nd so future monitoring should more clerly provide conclusion ginst ech trget to void ny misinterprettion of the results. Clon met the eligiility criteri for further Better Woodlnds for Wles funding, ut recent FCW inspection found tht Clon hd not fully complied with requirements nd some of the funding will e reclimed Clon met the eligiility criteri for Better Woodlnds for Wles funding 1.64 There re two key requirements for Better Woodlnds for Wles funding: pplicnts must own the woodlnd; nd n pproved five-yer mngement pln must e in plce Owners wishing to enter the scheme re given grnt-ided professionl help from qulified mngement plnners to prepre the initil ppliction, foundtion pln, nd susequently finl five-yer mngement pln Once mngement pln is pproved nd signed y the owner, contrct is issued which sets out in detil the work to e performed ech yer nd the grnts pyle for ech piece of work. Better Woodlnds for Wles permits the owner to dd new opertions provided they ssist in delivering the owner s outcomes nd to reschedule opertions to new yer, t the discretion of FCW. The five-yer pln is supported y 20-yer vision for the mngement of the woodlnd. 16

17 1.67 Clon susequently received pprovl on 31 Mrch 2008 for dditionl funding for improvement works under the Better Woodlnds for Wles grnt scheme following sumission nd pprovl of mngement pln. Following mendments to the initil pprovl, the totl grnt pproved ws 236,117. FCW pys these funds to Clon s work is finlised in line with the pproved mngement pln Clon therefore met the key terms nd conditions required for Better Woodlnds for Wles funding. FCW intends to improve rrngements to mesure nd monitor Better Woodlnds for Wles outcomes s we previously recommended 1.69 Our ntionl report on FCW pulished in Novemer 2008 referred to weknesses in monitoring of the Better Woodlnds for Wles grnt scheme. Specificlly, it stted tht: Better Woodlnds for Wles hs only een opertionl since 2007 the nture of woodlnds mens tht scheme outcomes my tke time to emerge. Nevertheless, FCW needs to develop series of performnce indictors for its grnt schemes, which mesure nd report progress ginst outcomes, rther thn performnce ginst spects of process, such s the re of woodlnd covered y schemes nd expenditure on them. FCW cknowledged tht it still needs to identify the most pproprite wy to mesure the outcomes of Better Woodlnds for Wles, nd determine relevnt indictors. To ensure tht it meets relevnt key performnce indictors, FCW needs to etter understnd the rriers experienced y pplicnts in moving towrds sumission of fully worked up mngement pln nd provide pproprite support Discussions with FCW confirm tht these issues re still relevnt, ut it hs lredy developed numer of grnt scheme indictors in response to our erlier report. It hs three-yer progrmme to implement the recommendtions contined within the ntionl report with Better Woodlnds for Wles recommendtions eing included for full implementtion y We hve greed s prt of our routine udit work t FCW to follow up the recommendtions rised in our ntionl report over period of three yers commencing in In response to pulic concern regrding the works undertken t Ffynone nd Cilgwyn Woodlnds, FCW undertook forml inspection resulting in some Better Woodlnds for Wles grnt eing reclimed from Clon 1.71 Better Woodlnds for Wles grnts re pid when pplicnts hve confirmed tht works in ccordnce with the pln of opertions set out in Mngement Plns hve een undertken. The pln of opertions sets out in detil the work to e performed ech yer nd the grnts pyle for ech piece of work. In ddition, mngement plns include long-term vision supported y desired chrcteristics nd fctors with trget levels for ech chrcteristic. Chrcteristics re defined s things in the woods which cn e mesured nd monitored to ensure tht mngement is succeeding. These will normlly e monitored t pln review ut in smll numer of instnces some monitoring work will e needed in the pln period. 17

18 1.72 FCW hs confirmed tht whilst no ongoing monitoring of mngement plns is undertken, ctions re ssessed t the end of the pln FCW s review of whether work on specific site complies with the mngement pln is covered y progrmme of inspections undertken on smple sis s required y the Rurl Development Regultions. FCW does not review the works efore pyment unless the clim flls within the smple selected for inspection FCW inspects five per cent of clims selected on risk sis. The risk sis for smple selection ws introduced in April 2008; however, pplictions received efore this dte hve een set up in the Better Woodlnds for Wles system with defult setting of low risk. FCW hs not ressessed these clims to ensure n pproprite risk rting is included within the system The risk-sed pproch to Better Woodlnds for Wles inspections therefore requires refinement to ensure tht ll clims prior to April 2008 re updted with n pproprite risk ssessment for effective smpling As Clon s mngement pln pre-dted April 2008, risk rtings for its clims re set t the defult of low risk. Discussions with FCW s Woodlnd Officer confirmed tht if Clon hd pplied post April 2008, its ppliction would proly hve een ssessed s medium risk. However, this revised risk rting would not utomticlly led to n inspection given tht only five per cent smple is tken nd high-risk clims would e prioritised FCW hd not formlly inspected Clon s Better Woodlnds for Wles grnt/mngement pln given tht its risk ws recorded s low. However, given the level of pulic concern into the funding nd works t Ffynone nd Cilgwyn Woodlnd, FCW hs decided it should crry out forml inspection of the works FCW susequently inspected the works in April 2010 to ensure tht they were consistent with those set out in the greed schedule of works in the pproved Better Woodlnds for Wles Mngement Pln The inspection found tht the mjority of the 193,681 works climed for or pid to dte hd een undertken. However, 20,010 of this is now suject to full or prtil reclim due to the filure of Clon to comply with ll or prt of the greed schedule of works for these specific opertions. 18