Bridging the accountability gap - Audit Commission

Governing partnerships | Governing partnerships for better accountability 39
88 One of the main corporate governance problems that the boards of public organisations
experience is the quality of information that they can rely on when they take decisions.
The sheer volume of information presented in board papers can be a problem, particularly
for non-executives and community representatives, who may not have the time or skills to
interpret it properly. Three important systems provide the information that underpins
decision making in corporate bodies: risk management, performance management and
financial management. They form the basis of all effective accountability.
Risk management
89 The growth in partnership working means that organisations face increased financial,
legal and reputational risks if problems arise. A few cases have resulted in a significant
loss of public funds when things have gone wrong in partnerships.
90 Risk management is the least developed of the three critical systems and processes
within corporate bodies and therefore within partnerships. Risk management is inherently
tied to decision-making processes; these are less clear in partnerships than in corporate
bodies, so this creates a ‘double bind’ for partnerships seeking to assess risks.
‘If the partnership is large enough and therefore is making decisions collectively,
rather than individual decisions as separate organisations, those collective
decisions are potentially leaving yourself open to future risks, claims, liabilities. You
may need to determine whether that partnership needs to be formalised as a legal
entity in itself.’
Head of cabinet, district council
‘I think where the partnership is a service delivery partnership with a formal and
structured agreement to pool resources and staff etc, then there will be a very
robust risk assessment done as we enter into the partnership. Where the
partnerships are more about bringing existing service providers together . . . then I
don’t think that we have got a robust risk assessment process in place yet.’
Head of corporate performance, metropolitan borough council
91 We have identified the following weaknesses in the way that public bodies address the
risks involved in working in partnerships: