Members of the Welsh Assembly have been told that mistakes were made in setting up the National Council for Education and Training for Wales.

Steve Martin, chief executive of Education and Learning Wales (Elwa) told the Assembly's audit committee that problems encountered in setting up the National Council were instrumental in the financial irregularities which followed.

What is ELWa?

Budget of �500m from Welsh Assembly Government Runs all post-16 education and training Aims for 36,000 more students in education by 2003 Answers to Cardiff Bay administration

Five Training and Enterprise Councils (TECs) were merged in April 2001 to form the National Council, which with other bodies makes up Elwa.

Elwa has overall responsibility for post-16 education and training in Wales.

A recent audit report said Elwa spent �2.2m in public money without approval from the Welsh Assembly Government.

Failures

The report said Elwa was responsible for a series of failures in financial management, meaning it issued 21 contracts without permission from the assembly.

Both Steve Martin, chief executive of Elwa, and Sir Jon Shortridge, the head of the civil service in Wales, gave evidence to the Assembly's audit committee on Thursday.

Both said they believed it was right to fast-track the establishment of Elwa in April 2001 rather than let it exist in shadow form for a year to become established.

Sir Jon said there was a strong business case for setting up Elwa quickly.

He added: "There is a responsibility on me in these circumstances to satisfy myself that policies which we as officials have been asked to do - and in this case actually we were asked to do by the assembly at large - are ones which are deliverable."

Sir Jon also told that the committee that there were irregularities but there was no fraud involved.

Problems

The committee heard from Mr Martin that the amalgamation of five TECs to create the National Council, had led to a series of problems.

Mr Martin said: "We had five sets of financial regulations, five sets of procurement regulations, five sets of lots of things - different payroll systems and all the rest of it.

"That's a bit of a nightmare for any organisation."

In a statement, Enid Rowlands, Chairman of Elwa, said: "We take our accountability to the taxpayer very seriously indeed.

'Manage risks'

"We put arrangements in place at the outset for good corporate governance, to identify problems and to manage risks.

"Wherever we have found weaknesses we have acted promptly to put things right.

"The Assembly's report accepted that our current procedures are sound."

The statement added that Elwa had taken action to rectify the problems.

Chair of the audit committee, Dafydd Wigley, added: "We are glad that it's been worked on and we hope that it has been resolved.

"There will need to be an eye kept on this to make sure we don't have these sort of incidents again."

ELWa has responsibility for planning, funding and promoting school leavers' education and training.

It is charged by the Welsh Assembly Government with greatly increasing the number of people involved in learning.