A report out today says £3.4 million of public money spent on a heritage centre in Bala could have been saved if the steps had been taken to prevent the centre from closure.
The Cywain Centre opened in April 2008 but ran into difficulties and closed in September 2011.
The report by the Wales Audit Office says those that funded the centre were aware that the business case for the centre was unrealistic.
A Welsh Government spokesperson said: "Safeguarding public money is something we take extremely seriously.
"We have already made improvements to the way we monitor projects, based on lessons learned from previous WAO reports. We will now consider the recommendations of the WAO's report and will respond to the findings in due course.
"However, it is important to recognise that EU programmes and projects are delivering for Wales. We are in a better situation now as a result of vital EU funds investment, worth some £4 billion since 2000."