101 Effective stewardship of public resources is as important in partnerships as in corporate bodies, where numerous controls and constraints promote accountability and prevent fraud and mismanagement. Auditors have found financial problems in some partnerships where such controls and constraints are lacking.
102 Partnerships that place responsibility for allocating central government funding streams (such as NRF, Sure Start, Connexions) with an accountable body appear to have better financial systems and controls. This is because the accountable body must ensure compliance with the requirements of the grant-paying government departments.
103 The principal governance issues in financial management are:
• Establishing adequate systems for financial control and monitoring within and between partnerships. Different accountability mechanisms often present challenges:
'There is a whole range of funding streams for each of our thematic partnerships and it just does not make administrative sense. It's cumbersome, it's inefficient and it misses the huge opportunities there are for applying resources flexibly and creatively. It requires government and other funding bodies to trust local partnerships.'
Head of corporate performance, metropolitan borough council
• Setting strategic direction for some partnerships where the availability of resources drives the agenda, rather than community needs. Short-term, complex government funding regimes, with tight decision-making timescales and pressure to spend grants quickly, can hamper strategic, long-term approaches to funding. There may be additional significant factors, such as existing short-term or annual financial arrangements between partner organisations or local pressure from residents to spend on short-term projects to address immediate issues.
'The power [in partnerships] is governed by the money and the control is through money. And money doesn't always improve partnerships. The best partnerships are those that use existing resources imaginatively to achieve your objective.'
Chief police inspector
• Ensuring that there are sufficient financial and human resources to enable the partnership to operate effectively. There can be a tension for some partners in committing resources to partnership objectives, particularly where those objectives are not a direct responsibility of the partner and they compete for scarce resources, with objectives for which the partner has sole responsibility.
104 Generally, resources to support partnership working are increasing and partnerships are making greater efforts to identify the delivery resource requirements, for example, by creating data analysis posts to inform future resource allocation and strategic decision making. Increasingly, organisations are redirecting mainstream resources and activity to meet partnership objectives, as well as pooling resources.