The embattled London Development Agency's arts funding has been dubbed 'incompetent' rather than criminal by the woman who called in Deloitte to examine the distribution of £70m to projects.

Deloitte's report, issued last week, criticised the agency's processes.

Dee Doocey, chair of the London Assembly's economic development, culture, sport and tourism (EDCST) Committee, said: 'The processes were less than adequate. From my committee's point of view I don't think criminality is an issue; I think it's breathtaking incompetence.'

London mayor Ken Livingstone has been facing a barrage of criticism in recent weeks, much of which was focused on projects supported by the LDA.

There have been allegations of racism against those who have made many of the criticisms, given that some of the funding related to ethnic minority projects.

'Saying it's racially motivated is really beneath contempt,' Doocey told Accountancy Age, adding that the probes into the LDA had been going on since 2006. The issue wasn't about whether people should have got the money, she said, but the processes and the procedures, 'what the outputs were, whether they had been monitored and whether the projects had been realised'.

Two reviews by Deloitte have supported the committee's misgivings about the funding problems. 'If it was a cover-up it might be easier to deal with it,' added Doocey.

A spokesman for the LDA said there were plans to 'tighten up internal audit and project management works' but as yet there were no 'agreed procedures'.

'We are identifying gaps and taking measures to plug them,' the spokesman said.