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April 18, 2023
WESTERN CAPE DEPARTMENT OF HEALTH
Risk Management Proposal
Cape Town | Sandisa Sebezo |
© Western Cape Government 2012 | 2WCG-PPT Slide Gallery-01112012.pptx
Overview
National Treasury – Public Sector Risk Management Framework
Risk Management : South African & Global Perspectives
Combined Assurance
Situational Analysis
Recommendations
Bibliography
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authorities
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authority
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authority
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authority
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authority
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risk Identification
Risk Management Functions of Executive Authority
Risk Management Functions of Accounting Authorities
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management Framework
Risks
Risk Management Functions of Executive Authorities
Risk Management Functions of Accounting Officers
Risk Management Functions of Internal Auditing
Functions of Risk Management Committees
Functions of Chief Risk Officers
Functions of Risk Champions
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National Treasury Public Sector Risk Management FrameworkRisks
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Identify & Document key risks
Cover all risks – not only risks within the direct control of the institution
Draw as much as possible from inputs from unbiased independent sources
Identify : Strategic Risks, Operational Risks and Project Risks
Identification
Assists to enrich risk intelligence
Help to prioritize important risks
Assessment on the basis of likelihood and impact
Performed through a 3 Stage process : Inherent Risk, Residual Risk and Risk Appetite
Designing control activities to address the risks
Assessment
Critical in order to identify, assess and respond to risks
Communicating responsibilities and actionsCommunication & Reporting
Through ongoing activities and separate evaluationsMonitoring
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Risk Management Functions of :
Executive Authority
Header
Header
HeaderObtain assurance from management
Playing an accountability role
Support
That strategic choices are based on a rigorous assessment of risk
That key risks inherent in the institution’s strategy were identified, assessed and properly managed
Insisting on the achievement of objectives, affective performance management and value for money
Assist Accounting O fficer to deal with fiscal, intergovernmental, political risk beyond direct control
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Risk Management Functions of :
Accounting Officers
Header
Header
HeaderUltimate Chief Risk Officer
Leadership
Provides Assurance
Accountable for overall governance of risk
Sets the tone for effective risk management by providing support
Devotes attention to overseeing management of significant risks
Holds management accountable
Ensures that actions are taken with regards recommendations from AC, IA, EA and RMC
Approves risk management policy, strategy and implementation plan
To relevant stakeholders that key risks are properly identified, assessed and mitigated
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Risk Management Functions of :
Internal Auditing
Header
Header
HeaderProvides Assurance
Takes Ownership
Conducts Assessments
Provides an objective, independent assurance on the effectiveness of risk management
Evaluates effectiveness of the entire system and provide recommendations on improvement
Can assume the role of Chief Risk Officer
Audit Committee could also take on the responsibilities of RMC
Must guard against assuming management responsibilities for risk management
To ensure that significant risks are identified and assessed
To check whether risk responses are appropriate
To check whether risk information is communicated in a timely manner and that it is properly recorded
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Functions of Risk Management Committees
Risk Management Committees
Attributes Duties
Appointment Composition
Appointed by Accounting Officer Should be chaired by independent external person
Comprise of management and external members
Responsibilities should be formally defined in a charter
Intimate understanding of mandate and operations
Ability to act independently and objectively in the interest of department
Should have thorough understanding of risk management principles and their application
Review and Recommend : Risk Management Policy, Risk Management Strategy, Risk Management Implementation Plan and Risk Appetite
Evaluate effectiveness of integration of risk management
Evaluate the effectiveness of the mitigating strategies
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Functions of Chief Risk Officers
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Develops the combined assurance plan
Analyzing results of risk assessments to extract risk intelligenceReporting risk intelligence to the Accounting Officer and RMC
Facilitating orientation and training of Risk Management Committee
Develops risk management framework i.e. Policy, Strategy, Implementation Plan, Risk Identification, Risk Assessment Methodology, Risk Appetite and Tolerance and Risk Classification
Develops department’s vision for risk managementUses specialist expertise to assist embed risk managementReports directly to Accounting Officer
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Functions of Risk Champion
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Must never assume the role of risk owner
Intervenes in instances where risk management efforts are being hampered by lack of cooperation or lack of skills and expertise
Provides guidance and support to manage problematic risks
Good understanding of risk management
Good analytical skills
Expert power
Leadership qualities
Motivational qualities
Good communication skills
Champions a particular aspect of riskPlays a catalyst role
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Risk Management South African & Global Perspectives
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On an “Apply or Explain” basis
The suggestion of independent experts be part of the RMC comes from here as well
Chapter 4 deals with the governance of risk
The Orange Book provides broad based general principles on risk management
Combined Code on Corporate Governance – Comply and Explain Basis
Turnbull Guidance seeks to imbed internal control
South African : King Code III Global : UK
ISO 31000 : Focus Plan –Do- Check and Act
Its purpose is to provide principles and generic guidelines for the design, implementation and maintenance of risk management throughout an organization
COSO Enterprise Risk Management Framework : A 3 dimensional model for understanding enterprise risk, applicable to all industries and encompassing all types of risks
Dr. Marc J. Epstein - Research Professor at Rice University
Dr. Adriana Rejc Buhovac – Assistant Professor at University of Ljubljana
FERMA – A Risk Management Standard
Good Practice in Risk Management – Northern Ireland Audit Office
Audit & Risk Assurance Committee Handbook
Global : US & Australia Global Works on Risk
Key FactOther Views
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Premise Premise
Practice Advisory 2050 – 2 speaks about assurance mapping as a valuable tool for coordinating risk management and assurance activitiesAn assurance mapping exercise involves mapping assurance coverage against the key risks in an organization. This process allows an organization to identify and address any gaps in the risk management process and givesStakeholders comfort that risks are being managed and reported on, and that regulatory and legal obligations are being met.
Practice Advisory 2050 -3 states that the internal auditor may rely on or use the work of other internal or external assurance providers in providing governance, risk management, and control assurance to the board.
King Code III declares that the audit committee should ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activitiesInternal audit should form an integral part of the combined assurance model as internal assurance provider.Internal audit should provide a written assessment of the effectiveness of the company’s system of internal controls and risk management
Combined Assurance
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Combined Assurance Governance Model
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Bibliography
National Treasury, Public Sector Risk Management Framework (2010)
Her Majesty Treasury, Audit & Risk Assurance Committee Handbook (2013)
King Code of Governance principles for South Africa (2009)
Her Majesty Treasury, The Orange Book : Management of Risk – Principles and Concepts (2004)
Northern Ireland Audit Office, Good Practice in Risk Management (2011)
COSO – Enterprise Risk Management -Integrated Framework : Application Techniques (2004)
Dr. Hugh van Seaton, Enterprise Risk Management : COSO, new COSO, ISO 3000 (2012)
Fandy Haristha Siregar, Combined Assurance : Holistic Approach for Organization (2014)
Deloitte, Combined Assurance : Intergrating Role Players to paint the Full Picture
Marc J. Epstein & Adriana Rejc, Identifying, Measuring and Managing Organizational Risks for Improved Performance
Tel: Fax:
www.westerncape.gov.za
Contact Us
Sandisa SebezoAdministrative Clerk : Strategic Planning & Coordination
+27 (0)21 483 6626
+27 (0)21 483 3205
4 Dorp Street, Cape Town, 8001