Bridging the accountability gap - Audit Commission

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Governing partnerships | Governing partnerships for better accountability
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Failure to understand the extent of their involvement in partnerships, or its
implications, including their financial and legal liabilities. Partnerships can operate in
isolation, duplicating effort and activity. Partners may not be adhering to the standards
and protocols expected of them in the corporate sphere.
Absent or insufficient corporate criteria to enable public bodies to assess whether to
form a partnership or participate in one, what the appropriate level of involvement
should be and what resources to invest. They may lack formal procedures for
assessing the suitability of partners, the legality of the proposed partnership
arrangements and standards of financial regularity or conduct.
Insufficient thought given to planning an exit strategy. Partners should clarify the
management of any continuing financial liability, the ownership of assets and
arrangements for disposal in order to avoid the risk of future legal disputes, or of the
accountable body (often a council) becoming liable by default.
Lack of clarity on insurable risk, such as indemnity cover for partner members or
public liability.
Lack of formal systems for recording conflicts of interests or for assessing the risks of
funding proposals.
92 In one shared-service delivery partnership, a community NHS trust managed a sharedservices
operation, providing financial services for its own purposes and to its NHS
partners. One audit report found that:
‘…There has been a failure in the arrangements for administering the financial affairs of
the partner organisations due to a collapse in the controls that should have been in place
over the core financial systems provided by X. This has resulted in:
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a breakdown in financial control;
an increased risk of undetected fraud, corruption and error;
inadequate financial reporting; and
the risk of inaccurate financial data, which cannot be relied upon for preparing the
annual accounts.’
93 All public sector organisations must now have a Statement on Internal Control. This
document requires them to describe how their systems of internal control manage the
main risks to achieving their objectives. Although partnerships do not have to be explicitly