Education Minister Jane Davidson is directly responsible for Elwa

The committee said Elwa - which is the biggest quango in Wales - was guilty of significant shortcomings in projects, including the Pop Centre MP3 Cafe project in Rhondda.

As a result, the report has said there now should be a two-year probationary period for all new quangos.

Elwa said it welcomed the report and had responded to its findings.

It is not the first time that Elwa has been severly criticised.

In September, a report by the National Audit Office said Elwa failed to protect the interests of taxpayers.

In the latest criticism, the Audit Committee identified 13 key weaknesses in Elwa's handling of the flagship �4m Pop Centre Cafe.

All post-16 education and training in Wales is handled by Elwa

It described its conduct in the scheme as "extremely poor at every stage".

The project should have turned an old supermarket in Rhondda into a music and TV training centre.

Two years on, not a single young person had been trained.

In a statement, Elwa said it had worked hard to put robust measures in place to correct issues contained in the Audit Committee report.

Troubled past

Elwa has run into a series of problems since it was launched two years ago.

Elwa has an annual budget of �800m to replace all Training and Enterprise Councils and other bodies.

But the speed with which further and higher education provision were united has led to difficulties.

Earlier this year, two damaging reports found that Elwa had spent more than �2m of public money without the assembly's permission.

Another report accused it of serious financial mismanagement.

Peter Higson, Elwa's interim chief executive, accepted there were serious deficiencies in the organisations finance and management control systems.

He said: "The errors identified in the Pop Factory MP3 Caf� project and the 17 other projects are not acceptable.

"We will be taking on board the audit committee's recommendations to further strengthen our internal processes and ensure that these mistakes are never repeated.