The Charities Commission is investigating Wales’s examination board following a long-running debacle over mismanaged European grants.

The new investigation comes a year after the Welsh Joint Education Committee was ordered to repay pound;1.2 million in grants to the European Union’s social fund, following an audit of the WJEC’s now-defunct European unit which uncovered a pound;103,000 deficit.

News of the Commission’s inquiry this week sparked calls for the WJEC to be subject to greater scrutiny by the Welsh Assembly.

Plaid Cymru’s Ieuan Wyn Jones, Assembly opposition leader, said: “I have raised concerns over accountability several times. As things stand, the public auditor cannot examine the WJEC accounts, as we would with anyone spending public money. And the Assembly’s committees don’t have the powers to direct it to appear before them, as they would with a government agency.”

But Mr Jones stopped short of calling for a wholesale takeover of the organisation, as proposed last week for ELWa, the post-16 education funding agency. WJEC’s examination and regulatory functions mean it should have a more “arm’s-length” relationship with the Assembly, he said.

Gareth Pierce, WJEC’s chief executive, said the organisation, a limited company and charity, supplied accounts and annual reports to the Charities Commission and Companies House.

Its exams work is regulated by both ACCAC and the QCA, the Welsh and English curriculum, qualifications and assessment agencies. “There are already plenty of checks and balances in place. We would regard it as fully within the Assembly’s remit to invite us to explain any part of our activities to members,” he said.

He said the Charity Commission’s inquiry was being seen as a “confirmatory investigation” to check that the WJEC had acted appropriately.

But a Commission spokeswoman said: “A formal inquiry is only opened after careful assessment, when it’s considered there is a serious possibility of mismanagement or abuse.”

She refused to give details of the WJEC investigation, which should be completed by next spring at the latest. But she said: “We are looking at the circumstances that resulted in the grant being repaid, checking all issues relating to it and that the trustees have properly managed the situation and are continuing to do so.”

Anna Brychan, director of the National Association of Head Teachers Cymru, said: “If there are questions to answer, we would urge that they are cleared up quickly. What’s important to our members is that the enviable reputation enjoyed by Welsh exam bodies in the past is maintained.”

Gethin Lewis, secretary of the National Union of Teachers Cymru and also a member of WJEC’s exams and assessment committee, added: “All of us want to ensure the resources used for the WJEC’s core work of exams and assessment are not affected, and that nobody loses confidence in this national examination body.”