Investing in Partnership - Government Grants to Voluntary and Community Bodies


There is a large and diverse "third sector" in Northern Ireland, with an estimated 5,000 voluntary and community groups and an annual turnover of some £657 million. Government invests some £200m each year in grants to voluntary and community bodies (including European funding).

This report from Northern Ireland Audit Office (NIAO) seeks to help Departments secure accountability, and regularity, propriety and value for money from public funding of the sectors. Intended as a practical guide for government Departments who are accountable for grants to voluntary and community sectors, it offers advice for funders on risk-based management practices which give a clear view of how funds are being spent and what results the investment is producing, while minimising waste, fraud, and unnecessary regulation.

Much has been achieved towards this end:

the Compact, or joint policy initiated by government, establishes the principles governing the partnership between government and the voluntary and community sector.

Proposals for a future funding strategy for government funding of the voluntary and community sector in Northern Ireland were published in 2000 ("the Harbison Report").

NICVA published information in 'State of the Sector III' on the resources available to the sector, and its relationship with the general public, government and other funders.

DFP has completed a Structural Funds Manual giving detailed guidance on the key regulatory provisions associated with European Structural Funds.

  • NIAO recommends:

Planning for the Future Decisions are urgently needed on the issues raised in the Harbison Report.


Information on funding and performance is needed, at whole of government level, to plan for challenges such as the reducing availability of public sector funds.

The Sector's Commitment to Quality

The Northern Ireland Compact Strategy 'Partners for Change' should recognise, confirm and formally record the commitment of the voluntary and community sectors in Northern Ireland to a core of common standards and practices.

Departments' Responsibilities

Departments are ultimately responsible for ensuring that proper grant management provisions (including good financial management) are in place in their Non-Departmental Public Bodies (NDPBs), and any second tier funding bodies which distribute exchequer or European funds allocated by the Department. The parent Department must agree and establish clearly defined roles and responsibilities, satisfy itself that appropriate financial control arrangements are in place and regularly check that they are working well.

Minimising the Risks

Appropriate supervision and control arrangements should be in operation and subject to periodic review as part of Departments' internal audit cycle. For Departments with a substantial and diverse portfolio of voluntary and community sector partnerships, the report proposes risk-based, practical procedures to support this approach.

Essential Controls

The report makes specific recommendations regarding key financial controls. Departments and other funders must be satisfied that:

recipients have the capacity to handle public money properly.

funding obligations are clearly communicated to grant recipients at the outset, and understood and observed by them.

application, reporting and monitoring requirements are commensurate with the scale and risk of funding involved.


Grants programmes and schemes should be organised and delivered in ways which are more helpful to disadvantaged persons and groups.

Essential Skills and Competences

Programme managers and administrators must have or develop the capacity to operate appropriate financial and performance controls and monitoring. Common, core training in accountability and management should be developed and run on a regular basis, open to civil servants, other funders and recipients of government grants to voluntary and community bodies, to promote a common culture of accountability across both the public, private, voluntary and community sectors.

Multiple Funding

Survey results indicate that most bodies rely on a number of funders, with no single funder predominating. Departments should take steps to safeguard against duplicate funding, whereby the same activity is funded more than once, and wasteful project overspend and/or improper use of public monies may occur. Recommendations focus on methods of co-operation between funders.

Interagency Working

The benefits of partnership working are widely recognised, particularly where this secures a holistic approach to problems facing a particular area or client group. Funders should be clear from the start about the aims and intended outcomes of interagency working, including the relative value of qualitative gains. A key test of the success of partnership working must be whether the extra benefits which derive from partnership are greater than the costs.