MINISTERS were told nine months ago that a charity which has seen its entire board resign in disgrace was a "failed organisation" amid major concerns over bullying, financial management and political bias.

An independent report into Voluntary Sector Gateway West Lothian, a charity that has received well over £1 million in public funding in recent years, recommended in March that a new board and senior staff were appointed or that the organisation was replaced entirely.

However, the Scottish Government continued to offer support to the charity, which was chaired by SNP councillor and prominent party activist Willie Boyle, until this month when social justice secretary Alex Neil warned he was considering stripping it of its official function. Following the intervention, board members quit en masse last week.

Voluntary Sector Gateway West Lothian, which has an official remit of supporting charities and acting as a link between the groups and the local authority, was found to have become a liability to the groups it was supposed to serve in the report, carried out by Avanté Consulting and commissioned by the Scottish Government.

Ministers had previously refused to publish the findings, but have now released a redacted version after the Labour-run West Lothian Council resorted to using freedom of information laws in a bid to force its release.

The consultants raised serious concerns over the role of Mr Boyle, who was vying to become an SNP MP earlier this year but was not selected by party members, with guidance stating that charities should be politically neutral.

The report added: "There was a clear voice of concern expressed in the review about the extent to which political bias has been a feature of the Gateway's engagement with the council both by the CEO and the Chair.

"At least one previous chairperson said that politics did play a part in the boardroom and the current chairperson cited a political dispute between Labour and the SNP as a reason for making formal complaints to the council, in his capacity as chair of the Gateway. He had used information received through his voluntary role to progress a political dispute."

Investigators uncovered evidence of bullying at the charity and a "culture of revenge against those who speak out." Insiders claimed that former staff members received "pay-offs" to avoid legal action, with the report stating: "Significant funds had been spent on consultants and paying staff off rather than deal with serious disciplinary action." A failure to deal with complaints, which were "stalled" by the board, was also described following the probe.

The report concluded: "The evidence indicates that the Gateway is a failed organisation despite the good, hard work put in by staff and volunteers. There is strong evidence to indicate that the organisation lacks leadership, vision, strategic intent and the competence to be a key player in the third sector in West Lothian."

Neil Findlay, the West Lothian-based Labour MSP, said there were "serious questions" over why the Scottish Government had sat on the damning report for so long, despite a recommendation from the consultants that their findings should be considered by "core funders", which would have included West Lothian Council.

A separate probe into the charity by regulator OSCR, which concluded this month, found "a number of issues in the running of the charity", but "no evidence of misconduct".

Margot Ferguson, one of the newly-appointed board members, said the charity was now working hard to re-establish trust with its member organisations. She added: "There is no political agenda with the new board. We all come from a background in working with the voluntary sector and there is a lot of talent which I think is relevant to what we have to do."

A Scottish Government spokeswoman said: "We offered substantial practical support and gave the board every opportunity to resolve issues. Despite our considerable efforts to find a way forward, the board was not able to fully meet our requirements.

"We look forward to working with the new board to take forward the actions necessary to have a Third Sector Interface that commands the confidence of all its stakeholders and which serves the third sector."