A MAJOR jobs quango under investigation over its use of European money is facing financial sanctions running into millions of pounds.
Jobs and Business Glasgow, an arms-length organisation owned by the city council, has been accused of misusing various pots of European cash which it could be forced to pay back.
The organisation, which was called Glasgow's Regeneration Agency until a relaunch in 2013, has received around £4million in European Union funding in recent years.
It now faces the prospect of paying all or some of this back after a routine audit by the Scottish Government found discrepancies in how the monies were accounted for, particularly around the issue of staff time devoted to the funded projects.
A board meeting was held yesterday where the impact of the investigation on Jobs and Business Glasgow is understood to have dominated the agenda.
Sources said Jobs and Business Glasgow is just one of raft of organisations across Scotland whose European funding has been suspended following an audit or review, with the potential claw back by Brussels running into tens of millions.
The payback could add a bigger whole to the budgets of the country's biggest council, which is already staring at a financial black hole of over £120million in the next two years and plans to shed around 3000 jobs to help balance the books
One source said: "What's happened is people working on one particular Europe-funded project are supposed to be spending 100 per cent of their time on that project and instead have been spending time on other projects. There appears not to have been control on this front.
"You've got to have some sympathy with Jobs and Business Glasgow. Their focus is on outcomes, getting people into employment. But someone needs to be making sure the paperwork is filled in correctly. It's no surprise European cash comes with these requirements."
Currently chaired by Labour councillor Maureen Burke, who has only been in the job several weeks, and with a cross-party board of directors, the quango was created by merging five local regeneration companies across the city and is Scotland's largest local authority jobs quango. It is funded by organisation including Skills Development Scotland and Job Centre Plus as Glasgow's main provider of apprenticeships.
It claims that in the 2014/15 period it engaged with over 16,000 unemployed city residents, supported over 3500 into work, assisted more than 7500 into training and helped 500 people to start up a business.
Some within they agency are understood to have claimed they feel "hung out to dry" by the city council, something being denied from within the authority.
Council insiders have also denied suggestions of power grabs around the organisation's remit.
A Scottish Government spokesman said: “All projects receiving European Structural Funds across Scotland are subject to checks and audit visits on a regular basis.
"Issues emerge each year around eligible expenditure, documentation, staff time and procurement processes. "This can involve funds having to be repaid."
A spokesman for Glasgow City Council said: “We are working with Jobs and Business Glasgow and the Scottish Government to investigate this. It would not be appropriate to say anything more at this time.”
This decision was later described as "misconduct" and "wholly inappropriate" by Scotland's charities watchdog.
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