Risk Assessment & Management Plan

Risk Management Principles:

Risk Management should:
1 create value resources expended to mitigate risk should be less than the consequence of inaction
2 be an integral part of organizational processes
3 be part of decision making
4 explicitly address uncertainty and assumptions
5 be systematic, structured and timely
6 be based on the best available information
7 be tailorable
8 take human and cultural factors into account
9 be transparent and inclusive
10 be dynamic, iterative and responsive to change
11 facilitates continual improvement and enhancement of the organization
12 be continually or periodically re-assessed
Navigation of this tool
1 To Identify Risks Click Here
2 To Evaluate Risks Click Here
3 To Treat (Manage/Action) Risks Click Here
4 To Monitor (Review) Risks Click Here
5 To Report on Risks Click Here
6 To View/Update Validation Rules Click Here
Benefits of Risk Management
1 Increase the likelihood of achieving objectives;
2 Encourage proactive management;
3 Be aware of the need to identify and treat risk throughout the organization;
4 Improve the identification of opportunities and threats;
5 Achieve compatible risk management practices between organisations and nations;
6 Comply with relevant legal and regulatory requirements and international norms;
7 Improve governance;
8 Improve stakeholder confidence and trust;
9 Establish a reliable basis for decision making and planning;
Author: Sean Chamberlin
http://www.linkedin.com/in/seanchamberlin
Risk Management Process:
create value resources expended to mitigate risk should be less than the consequence of inaction
Further Information on Risk Management
10 Improve controls; LinkedIn Group 'ISO 31000 Risk Management Standard'
11 Effectively allocate and use resources for risk treatment; http://www.linkedin.com/groups/ISO-31000-Risk-Management-Standard-1834592?trk=my_groups-b-grp-v
12 Improve operational effectiveness and efficiency; International Organisation for Standardization
13 Enhance health & safety performance and environmental protection; http://www.iso.org/iso/home/standards/iso31000.htm
14 Improve loss prevention and incident management; Standards Australia Risk Management Principles & Guidelines
15 Minimize losses; http://sherq.org/31000.pdf
16 Improve organizational learning; and Concise Guide to Treasury Risk Management
17 Improve organizational resilience. http://www.charteredaccountants.com.au/Industry-Topics/Audit-and-assurance/Current-issues/Audit-Committee-Guides/Audit-Committee-Guides/Treasury-Management-Guide.aspx
C
o
m
m
u
n
i
c
a
t
i
o
n


C
o
n
s
u
l
t
a
t
i
o
n
Risk Management Process:
Establishing the Context
Risk Assessment
Risk Identification
Risk Analysis
Risk Evaluation
Risk Treatment
Further Information on Risk Management
LinkedIn Group 'ISO 31000 Risk Management Standard'
http://www.linkedin.com/groups/ISO-31000-Risk-Management-Standard-1834592?trk=my_groups-b-grp-v
International Organisation for Standardization
http://www.iso.org/iso/home/standards/iso31000.htm
Standards Australia Risk Management Principles & Guidelines
http://sherq.org/31000.pdf
Concise Guide to Treasury Risk Management
http://www.charteredaccountants.com.au/Industry-Topics/Audit-and-assurance/Current-issues/Audit-Committee-Guides/Audit-Committee-Guides/Treasury-Management-Guide.aspx
M
o
n
i
t
o
r
i
n
g

&

R
e
v
i
e
w
http://www.charteredaccountants.com.au/Industry-Topics/Audit-and-assurance/Current-issues/Audit-Committee-Guides/Audit-Committee-Guides/Treasury-Management-Guide.aspx
Risk Assessment & Management Plan
# Risk
1 loss of relevance of products to customer base
2 Risk 2
3 Risk 3
4 Risk 4
5 Risk 5
6 Risk 6
7 Risk 7
8 Risk 8
9 Risk 9
10 Risk 10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
IDENTIFY
Source
Business Goals/Objectives
impacted by Risk
changing market needs & sentiment
IDENTIFY
Assumptions & key variables
used to assess risk
Business Process Category
Strategic Environmental
IDENTIFY
Link to Document Document Type Existing Controls
Strategic Plan annual review of plans
Business Continuity Plan
OH&S Policies & Procedures
Other
IDENTIFY
Assessment of Existing Controls Consequence
Cost of Consequence
(if known)
Likelihood
Opportunities for Improvement Major Possible
Major Almost Certain
Moderate Likely
Moderate Possible
Minor Possible
Minor Possible
Minor Unlikely
Minor Unlikely
Negligible Rare
Negligible Rare
EVALUATION
Risk Priority Action Action Type Responsibility
High Google Analytics daily review
Reduce Likelihood (eg. P&P,
Training)
Marketing rep
V High
High
Medium
Medium
Medium
Low
Low
Low
Low
TREATMENT / ACTION PLAN EVALUATION
By When Residual Risk Rating Key Risk Indicators
01-Jan-15 Adequate
Google searching for our
product description falling
TREATMENT / ACTION PLAN Monitoring
Reporting/Monitoring Last Reviewed Review Frequency (# Months) Next Review Due
Weekly line graph of total
searches for our products
01-Mar-14 12 01-Mar-15
ONGOING REVIEWS Monitoring
Responsibility
Marketing
ONGOING REVIEWS
Top Risks by Category/Industry
Click on appropriate category to get a list of the common risks
Board level risks
Insurance Industry top 10 risks
Manufacturing Industry risks
Small Business risks
Procurement process risks, consequences & related actions
Treasury
Project Risks
OHS (Health & Safety)
Board Legal Responsibilities (and therefore may represent risks)
Fiduciary Duty (common law) act in good faith for the benefit of, or in the interests of, the organisation
Duty to Act in Good Faith (sect 181 of Corporations Act) A director must exercise their power in good
faith in the best interests of the corporation & for a proper purpose
Do Not Misuse Information or Position of Director - The law prohibits Board members from using their
position to gain an advantage for themselves or another, or to cause detriment to the entity they are
governing
Do Not Abuse an Opportunity if you become aware of an opportunity as a result of your position on a
board then you should not take up tht opportunity for personal benefit at the expense of the organisation
Duty to Act with Care & Diligence - Board members must exercise their powers and discharge their
duties with the care and diligence of a "reasonable person" in their position. Board members with a high
level of expertise will attract a higher standard of care than other members.
Avoid Conflict of Interest
Avoid Insolvent Trading
Avoid Fraud
Avoid Negligence
Tax tax legislation including any obligations required for charitable income tax exempt status and/or
deductible gift recipient status (if applicable).
Conditions of funding contractual obligations that exist to any funding bodies.
Occupational health and safety must provide a safe workplace for employees, subcontractors,
volunteers and a range of others. For example training on fire evacuation procedures, electrical safety, first
aid, no smoking in workplace, etc.
Industry-specific for example child care and safety in schools.
Organisation Constitutional compliance for example rights of members, appointments to the board &
their tenure, etc.
Privacy important to understand what data is considered to be private as this is subject to tight regulatory
controls as to its use, accesibility, accuracy & storage
Information Security
Environmental Sustainability such as EPA compliance
HR for example pay rates, superannuation contribution amounts & frequency, Sick Leave, Overtime,
Hiring & Firing procedures
Trade Practices Act for example misleading & deceptive conduct, Third Line Forcing, etc
Anti-Discrimination
Contracts Law
Defamation
Fund Raising
Manufacturing Industry
Are substances used in particular tasks suitable for the tasks?
Is there a register of hazardous substances, and an inventory of chemicals purchased or produced and material safety data sheet
(MSDS) for each substance?
Are hazardous substance containers adequately labelled?
Are hazardous substances stored according to respective MSDS?
Is plant and equipment suitable for the required tasks?
Are all moving parts of plant and equipment guarded to prevent contact with people and property to minimise the risk of injuries
and damage, such as crushing, stabbing, cutting, puncturing, shearing, and tearing?
Are there systems in place to prevent injury from fragmentation of or flying particles from plant and equipment?
Are there systems in place to prevent injury from falling plant and equipment?
Are there systems in place to prevent injury from performing a task with plant and equipment in a confined space?
Are there systems in place to prevent injury from inadvertent movement of plant and equipment?
Are there systems in place to prevent injury from stored energy' in plant and equipment, for example compressed air or
hydraulic pressure after turning off plant?
Are there systems in place to prevent injury resulting from failure of plant and equipment due to the loss of contents, loss of
load, unintended ejection of product, explosion, fragmentation or collapse of parts?
Does plant and equipment have adequate power isolation, noise insulation, ventilation and fume extraction?
Is the noise level of plant, equipment and the surrounding environment within the legislated noise level set down for your
particular workplace?
For people using vibrating hand-held equipment or operating vibrating controls (chain saws, sewing machines, grinders,
pneumatic drills, and so on) are exposure levels within values recommended by Australian Standard AS2763 ?
For drivers of vehicles and tractors, and helicopter and airplane pilots, are the vibration exposure levels within values
recommended by Australian Standard AS2670 ?
For operators of vibrating platforms on manufacturing/construction sites, are exposure levels within values as per Australian
Standard AS2670 ?
Are occupational exposures to Ionising radiation, such as X-rays, and gamma-rays equipment, within limits set by WorkSafe
Australia Network Health and Medical Research Council (National Standard Recommendations for limiting exposure to ionising
radiation) ?
Is plant and equipment that generates UV radiation, such as photocopiers, lasers, UV cured inks in the printing industry, and
welding emissions enclosed?
Are radio frequency exposure levels from TV/FM radios transmitters, radio, microwaves, plastic moulders, induction heaters and
so on kept as low as practically possible?
Are outdoor workers provided with personal protective equipment and work systems as per WorkSafe Australia - guidance note
on the protection of workers from UV radiation in sunlight ?
Are tasks performed at temperatures between 16C and 24C for sedentary work, 4C and 24C for light work and 7C and
24C for moderately heavy work?
Are tasks performed for more than 2 hours done so at humidity levels between 40% to 60%?
Is electrical wiring installed according to Australian Standard AS 3900 ?
Are electrical fixtures provided with adequate earthing or other residual current devices?
Are any signs of damage to either cable isolation or other electrical fixtures rectified?
Are there identified colour coded cable labelled isolators to all switchboards?
Are employees prevented from performing tasks in metal enclosures or damp places using electrical tools?
Is there a regular inspection of portable cords and extension leads?
Are Danger' tags used by electricians when working on plant?
Does electrical equipment comply with Australian Standard AS3100 - General Requirements For Electrical Equipment ?
Is adequate lighting provided according to Australian Standard AS1680 lighting levels for different types of work ?
Is employees' eyesight assessed every two years to determine their ability to continue performing their tasks?
Are hazardous conditions that are likely to arise during the use of plant and equipment as a result of friction, fire, explosion,
moisture, vapour, gases, dust and ice controlled?
Are access and egress arrangements for doorways, passageways, stairs, gangways and so on clear of obstructions, well lit, free
of slip hazards and secure?
Has lifting, carrying, pushing, and pulling been eliminated from all tasks?
Has frequent bending, twisting and stretching been eliminated from all tasks?
Has lifting of awkward loads been eliminated from all tasks?
Has repetitive work using awkward or constrained postures been eliminated from all tasks?
Have slip, trip and fall hazards been eliminated?
Are all walkways free of obstructions?
Are floors undamaged?
Are ladders checked regularly for any damage?
Are stairways well lit and properly maintained?
Are work stations and benches adjusted to suit the physical dimensions of workers?
Are safety devices and emergency back-up arrangements of plant equipment and systems suitable for the tasks being
performed?
Are plant, equipment, building areas and fixtures maintained and repaired?
Are environmental conditions and terrain suitable for the plant and substances that are used?
Are hazardous elements, such as electricity, water and incompatible chemicals, segregated?
Are systems in place to address conflict between staff?
Are systems in place to address poor job satisfaction?
Are systems in place to address low job security?
Have poor work conditions, such as noise, dust, lack of ventilation and so on been eliminated?
Are visitors to the workplace provided with relevant safety information and are they supervised?
Are the current work systems appropriate, for example, whether more or fewer people should be involved and whether work
procedures need to be revised?
Do workers hold the required competency requirements, such as licensing, certification and apprenticeships?
Is training and supervision provided to meet the needs of each individual worker?
Insurance Industry
Climate change
Demographic shifts in core markets
Catastrophic events
Emerging markets
Regulatory intervention
Channel distribution
Integration of technology with operations and strategy
Securities markets
Legal risk
Geopolitical or macroeconomic shocks
Small Business
Financial includes cash flow, budgetary requirements, tax obligations, creditor and debtor management,
remuneration and other general account management concerns.
Equipment extends to equipment used to conduct the business and includes everyday use, maintenance,
depreciation, theft, safety and upgrades.
Organisational relates to the internal requirements of a business, extending to the cultural, structural and human
resources of the business.
Security includes the business premises, assets and people. Also extends to security of company information,
intellectual property, and technology.
Legal & regulatory compliance includes legislation, regulations, standards, codes of practice and contractual
requirements. Also extends to compliance with additional rules such as policies, procedures or expectations, which
may be set by contracts, customers or the social environment.
Reputation entails the threat to the reputation of the business due to the conduct of the entity as a whole, the
viability of products/services, or the conduct of employees or others associated with the business.
Operational covers the planning, daily operational activities, resources (including people) and support required
within the a business that results in the successful development and delivery of products/services.
Contractual meeting obligations required in a contract including delivery, product/service quality,
guarantees/warranties, insurance and other statuatory requirements, non-performance.
Service delivery relates to the delivery of services, including the quality of service provided, or the manner in which
a product is delivered. Includes customer interaction and after-sales service.
Commercial includes risks associated with market placement, business growth, product development,
diversification and commercial success. Also to the commercial viability of products/services, extending through
establishment, retention, growth of a customer base and return.
Project includes the management of equipment, finances, resources, technology, timeframes and people involved
in the management of projects. Extends to internal operational projects, business development and external projects
such as those undertaken for clients.
Safety including everyone associated with the business: individual, workplace and public safety. Also applies to the
safety of products/services delivered by the business.
Stakeholder management includes identifying, establishing and maintaining the right relationships with both
internal and external stakeholders.
Client-customer relationship potential loss of clients due to internal and external factors.
Strategic includes the planning, scoping, resourcing and growth of the business.
Technology includes the implementation, management, maintenance and upgrades associated with technology.
Extends to recognising critical IT infrastructure and loss of a particular service/function for an extended period of
time. It further takes into account the need and cost benefit associated with technology as part of a business
development strategy.
Treasury
Market Risk
(the movement in value due to a change in price, creating a positive or negative value for the organisation)
Credit Risk
(the risk that your counter party defaults before or on settlement date)
Liquidity Risk
(risk of not being able to deal in a market due to lack of liquidity, and funding risk, which is not having
adequate funds in place when they are needed)
Operational Risk
(loss due to failure of people, processes and systems, or an external event such
as fire, fraud, flood, earthquake or other natural phenomenom)
Project Risks
Communication
Resources & Team
Operational Risk
(loss due to failure of people, processes and systems, or an external event such
as fire, fraud, flood, earthquake or other natural phenomenom)
Executive Support
Cost Management
Change Management
Stakeholders
Integration
Requirements
Decisions & Issue Resolution
Procurement
Architecture
Design
Technical
Procurement - common risks & management approaches
Risk Category
Commercial
Approvals & Red Tape
Organizational
External
Project Management
User Acceptance
Procurement
Authority
Planning
Selecting the purchasing method
Purchasing documentation
Developing the specification
Planning
Inviting, clarifying and closing offers
Evaluating offers
Contract management
Negotiations
Selecting the successful tenderer
OH&S (Health & Safety)
Evaluating the procurement process
Disposals
Contract management
Risk Category
Mechanical hazards
Chemical and biological hazards
Sources of energy
Body stressing or impact hazards
Gravity
Psychological
Are risks identified as early as possible to ensure adequate steps are taken to handle the exposure in a timely manner?
Do risk measurement methodologies measure the risks adequately and in a timely manner?
Are potential stress tests and what if analyses undertaken monthly (eg.measuring sensitivity of exposure to market risk (VAR) and scenario analysis?
Is there a suitable mix of floating and fixed interest rates?
What is the foreign exchange risk hedging policy?
What percentage of foreign exchange is hedged?
Is the audit committee informed of any breaches of market risk policy or limits?
Is there adequate capacity to measure credit exposure?
Does the organisation have a process for handling and valuing collateral received or paid?
Does the organisation have settlement limits?
What reliance is placed on credit ratings provided by a credit rating agency?
Is credit risk appropriately managed?
Is the audit committee informed of any breaches of credit or settlement limits immediately?
What processes are in place to determine credit limits?
What processes are in place to measure liquidity risk?
What impact do financial instruments have on cash flow?
Are appropriate cash limits in place?
Are secured funding lines in place?
What level of security do these funding lines have?
Is close contact kept with funders, shareholders and bankers?
Are there diversified sources of funds?
Is there a spread of products and maturities so that maturities do not build up?
Is there liquidity in all the various financial instruments eg. any exotic or structure products?
What stress scenarios are run and are they stressful enough?
Is the audit committee informed of liquidity stress issues in a timely manner?
Are all staff who are responsible for monitoring derivative transactions well trained and qualified?
What is the culture of staff and management toward risk and controls?
Have staff adequate expertise for the roles that they perform?
Are bonuses paid based on the results of any risk management or treasury activities?
Is there an independent system for calculating and reporting to calculate and report results?
Are treasury operations handled by internal staff with the appropriate treasury skills?
Are front and back office systems adequate and appropriately segregated to ensure the completeness and accuracy of processing, settlement and verification of the value of outstanding transactions?
Are valuation and spreadsheet models independently reviewed?
Are all back office staff adequately trained and do they understand the products used?
Are the organisations systems capable of producing adequate disclosure information for users of the financial statements?
Are accounting results routinely calculated and regularly reported?
Do the external auditors have a clear understanding of their role in verifying the financial transactions?
Are the policies and procedures reviewed at least annually?
1. Executives fail to support project
2. Executives become disengaged with project
3. Conflict between executive stakeholders disrupts project
4. Executive turnover disrupts project
5. Scope is ill defined
6. Scope creep inflates scope
7. Gold plating inflates scope
8. Estimates are inaccurate
9. Dependencies are inaccurate
10. Activities are missing from scope
11. Cost forecasts are inaccurate
12. Exchange rate variability
13. Change management overload
14. Stakeholder conflict over proposed changes
15. Perceptions that a project failed because of changes
16. Lack of a change management system
17. Lack of a change management process
18. Lack of a change control board
19. Inaccurate change priorities
20. Low quality of change requests
21. Change request conflicts with requirements
22. Stakeholders become disengaged
23. Stakeholders have inaccurate expectations
24. Stakeholder turnover
25. Stakeholders fail to support project
26. Stakeholder conflict
27. Process inputs are low quality
28. Project team misunderstand requirements
29. Communication overhead
30. Under communication
31. Users have inaccurate expectations
32. Impacted individuals aren't kept informed
33. Resource shortfalls
34. Learning curves lead to delays and cost overrun
35. Training isn't available
36. Training is inadequate
37. Resources are inexperienced
38. Resource performance issues
39. Team members with negative attitudes towards the project
40. Resource turnover
41. Low team motivation
42. Lack of commitment from functional managers
43. Architecture fails to pass governance processes
44. Architecture lacks flexibility
45. Architecture is not fit for purpose
46. Architecture is infeasible
47. Design is infeasible
48. Design lacks flexibility
49. Design is not fit for purpose
50. Design fails peer review
51. Technology components aren't fit for purpose
52. Technology components aren't scalable
53. Technology components aren't interoperable
54. Technology components aren't compliant with standards and best practices
55. Technology components have security vulnerabilities
56. Technology components are over-engineered
57. Technology components lack stability
58. Technology components aren't extensible
59. Technology components aren't reliable
60. Information security incidents
61. System outages
62. Legacy components lack documentation
63. Legacy components are out of support
64. Components or products aren't maintainable
65. Components or products can't be operationalized
66. Project management tool problems & issues
67. Delays to required infrastructure
68. Failure to integrate with business processes
69. Failure to integrate with systems
70. Integration testing environments aren't available
71. Failure to integration with the organization
72. Failure to integrate components
73. Project disrupts operations
74. Project disrupts sales
75. Project disrupts compliance
76. Requirements fail to align with strategy
77. Requirements fail to align with business processes
78. Requirements fail to align with systems
79. Requirements have compliance issues
80. Requirements are ambiguous
81. Requirements are low quality
82. Requirements are incomplete
83. Decision delays impact project
84. Decisions are ambiguous
85. Decisions are low quality
86. Decisions are incomplete
87. No response to RFP
88. Low quality responses to RFP
89. Failure to negotiation a reasonable price for contracts
90. Unacceptable contract terms
91. Conflict with vendor leads to project issues
92. Conflict between vendors leads to project issues
93. Vendors start late
94. Vendor components fail to meet requirements
95. Vendor components are low quality
96. Infrastructure is low quality
97. Service quality is low
98. Vendor components introduce third party liability
99. Loss of intellectual property
100. Project team lack authority to complete work
101. Authority is unclear
102. Delays to stakeholder approvals impact the project
103. Delays to financial approvals impact the project
104. Delays to procurement processes impact the project
105. Delays to recruiting processes impact the project
106. Delays to training impact the project
107. The project fails to match the organization's culture
108. An organizational restructuring throws the project into chaos
109. A merger or acquisition disrupts the project
110. Legal & regulatory change impacts project
111. Force Majeure (e.g. act of nature) impacts project
112. Market forces impact project
113. Technical change impacts project
114. Business change impacts project
115. Failure to follow methodology
116. Lack of management or control
117. Errors in key project management processes
119. Users reject the prototype
120. User interface doesn't allow users to complete tasks
121. User interface is low quality
122. User interface isn't accessible
123. Project reduces business productivity
124. Project reduces innovation
125. Product disrupts business metrics (measurements of objectives)
126. Users reject the product
127. Product doesn't sell
128. Product incurs legal liability
129. Product negatively affects brand
130. Product negatively affects reputation
Risk
Understatement of the need
Overstatement of the need
Misinterpretation of user needs
Insufficient funding
Failure to identify potential sources
Selecting inappropriate method
Terms and conditions unacceptable to
tenderers
Providing inadequate information
Narrow definition or commercial
specification (eg. use of brand name)
Definition of inappropriate product or
service
Biased specification
Inadequate statement of requirements
Impractical timeframe
Probity issues
Failure to identify a clear winner
Failure to adequately address enquiries
from tenderers
Actual or perceived favouritism in
providing information
Actual or perceived breach of
confidentiality
Insufficient number of responses
No response from known quality
suppliers
Failure to follow effective evaluation
procedures
Breaches of security
Offers fail to meet needs
Decision made on subjective grounds
Variations in price and foreign exchange
Unwillingness of the supplier to accept
the contract
Failure of either party to fulfil the
conditions of the contract
Not matching the expectations of buyer
and tenderer
Deadlock on details of agreement
Failure to secure mandatory conditions
Unfair or onerous requirements on the
tenderer in the contract conditions
Failure to reflect the terms offered and
agreed in the contract
Inadvertently creating a contract without
the delegate's prior approval
Selecting an inappropriate supplier
Selecting inappropriate product
Failure to evaluate procurement and
management processes
Fraud
Key personnel not available
Failure to identify and address problems
Collusive bidding at auction
Inadequate tender management
Failure of either party to fulfil the
conditions of the contract
Inadequately administering the contract
Commencement of work by the supplier
before contract is exchanged or letter of
acceptance issued
Unauthorised increase in scope of work
Loss of intellectual property
Failure to meet liabilities of third parties
(eg. royalties or third party property
insurance)
Loss or damage to goods in transit
Risk
Plant, equipment and items (and parts of them) that have the potential to cut, rip, tear, abrade, crush, penetrate, produce projectiles or cause sudden impact.
Chemicals, compounds, materials, powders, dusts and vapours that have the potential to impair health, have adverse effects on human reproduction, cause disease or have explosive, ammable, toxic or corrosive properties.
A range of sources of energy that have the potential to cause harm, including electricity, heat, cold, noise, high powered light and damaging radioactive sources.
Activities that cause stress to the muscles and/or skeleton, including manual handling of people, animals, goods or materials and things or circumstances that can cause a person to slip, trip or fall at the same level.
Activities that are carried out where a person can fall or an object can fall onto people.
Hazards Events, systems of work or other circumstances that have the potential to lead to psychological and associated illness, including work-related stress, bullying, workplace violence and work-related fatigue.
Are risks identified as early as possible to ensure adequate steps are taken to handle the exposure in a timely manner?
Do risk measurement methodologies measure the risks adequately and in a timely manner?
Are potential stress tests and what if analyses undertaken monthly (eg.measuring sensitivity of exposure to market risk (VAR) and scenario analysis?
Is there a suitable mix of floating and fixed interest rates?
What is the foreign exchange risk hedging policy?
What percentage of foreign exchange is hedged?
Is the audit committee informed of any breaches of market risk policy or limits?
Is there adequate capacity to measure credit exposure?
Does the organisation have a process for handling and valuing collateral received or paid?
Does the organisation have settlement limits?
What reliance is placed on credit ratings provided by a credit rating agency?
Is the audit committee informed of any breaches of credit or settlement limits immediately?
What processes are in place to determine credit limits?
What processes are in place to measure liquidity risk?
What impact do financial instruments have on cash flow?
What level of security do these funding lines have?
Is close contact kept with funders, shareholders and bankers?
Is there a spread of products and maturities so that maturities do not build up?
Is there liquidity in all the various financial instruments eg. any exotic or structure products?
What stress scenarios are run and are they stressful enough?
Is the audit committee informed of liquidity stress issues in a timely manner?
Are all staff who are responsible for monitoring derivative transactions well trained and qualified?
What is the culture of staff and management toward risk and controls?
Have staff adequate expertise for the roles that they perform?
Are bonuses paid based on the results of any risk management or treasury activities?
Is there an independent system for calculating and reporting to calculate and report results?
Are treasury operations handled by internal staff with the appropriate treasury skills?
Are front and back office systems adequate and appropriately segregated to ensure the completeness and accuracy of processing, settlement and verification of the value of outstanding transactions?
Are valuation and spreadsheet models independently reviewed?
Are all back office staff adequately trained and do they understand the products used?
Are the organisations systems capable of producing adequate disclosure information for users of the financial statements?
Are accounting results routinely calculated and regularly reported?
Do the external auditors have a clear understanding of their role in verifying the financial transactions?
Are the policies and procedures reviewed at least annually?
2. Executives become disengaged with project
3. Conflict between executive stakeholders disrupts project
14. Stakeholder conflict over proposed changes
15. Perceptions that a project failed because of changes
16. Lack of a change management system
17. Lack of a change management process
21. Change request conflicts with requirements
23. Stakeholders have inaccurate expectations
28. Project team misunderstand requirements
32. Impacted individuals aren't kept informed
34. Learning curves lead to delays and cost overrun
39. Team members with negative attitudes towards the project
42. Lack of commitment from functional managers
43. Architecture fails to pass governance processes
51. Technology components aren't fit for purpose
52. Technology components aren't scalable
53. Technology components aren't interoperable
54. Technology components aren't compliant with standards and best practices
55. Technology components have security vulnerabilities
56. Technology components are over-engineered
57. Technology components lack stability
58. Technology components aren't extensible
59. Technology components aren't reliable
62. Legacy components lack documentation
63. Legacy components are out of support
64. Components or products aren't maintainable
65. Components or products can't be operationalized
66. Project management tool problems & issues
68. Failure to integrate with business processes
70. Integration testing environments aren't available
71. Failure to integration with the organization
76. Requirements fail to align with strategy
77. Requirements fail to align with business processes
78. Requirements fail to align with systems
79. Requirements have compliance issues
89. Failure to negotiation a reasonable price for contracts
91. Conflict with vendor leads to project issues
92. Conflict between vendors leads to project issues
94. Vendor components fail to meet requirements
98. Vendor components introduce third party liability
100. Project team lack authority to complete work
102. Delays to stakeholder approvals impact the project
103. Delays to financial approvals impact the project
104. Delays to procurement processes impact the project
105. Delays to recruiting processes impact the project
107. The project fails to match the organization's culture
108. An organizational restructuring throws the project into chaos
109. A merger or acquisition disrupts the project
110. Legal & regulatory change impacts project
111. Force Majeure (e.g. act of nature) impacts project
117. Errors in key project management processes
120. User interface doesn't allow users to complete tasks
123. Project reduces business productivity
125. Product disrupts business metrics (measurements of objectives)
130. Product negatively affects reputation
Likely consequences
Purchase of unsuitable product or service
Money wasted
Need not satisfied
Greater expense
Poor competition
Totally unacceptable purchase or not most suitable product or service
Time lost
Increased costs
Possible downtime
Delay in making the purchase
Additional costs for re-tender
Inadequate responses from tenderers
Reduced competition
Delivery schedule not met
Increased procurement costs
Misuse of resources
Most suitable product not obtained
Fewer alternatives
Most suitable product or service may not be obtained
Increased costs
Need not satisfied
Time lost
Increased costs
Possible downtime
Inadequate responses from tenderers
Claims of unfair dealings
Variety of offers
Insufficient responses
Products offered not meeting needs
Difficult to evaluate
Lack of offers from suitable tenderers
Need to seek offers again
Possible cost variations
Failure to obtain value for money
Loading of costs in offers
Having to modify tender terms and conditions
Disruption
Low response
Loading of costs in offers
Variations in offers
Having to provide clarifying information, causing delays in tender closing
Additional costs
Unethical conduct
Claims of unfair practices
Offers with qualifications by tenderers
Withdrawal of offers
Complaints from tenderers
Withdrawal of offers
Complaints from tenderers
Mistrust by tenderers
Need to undertake process again
Increased costs
Delayed delivery to the client
Poor value for money due to limited competition
Reduced competition
Increased costs of products or services
Inconsistent evaluations
Possible complaints from tenderers
Subjective not objective evaluation of offers
Claims of unethical or unfair practices
Loss of faith with tenderers
Need to call tenders again
Additional costs
Delay in delivery
Claims of unethical and unfair behaviour
Complaints from tenderers
Failure to fulfil the contract
Failure to meet the client's need
Contract disputes
Delivery delays
Cost variations
Reduction in value for money
Purchase of less suitable product
Inefficient use of resources
Delays in delivery
Need to restart procurement
Possible cost of legal action
Inability to finalise contract
Delays in delivery
Variations in cost
Inefficient use of resources
Contract disputes
Invalidity of contract
Legal action
Poor supplier/customer relationship
Contract disputes
Legal action
Poor supplier/customer relationship
Expense of negotiating out of the contract and paying damages
Committing to other associated work prior to main contract existing
Cost overruns
Delays in delivery
Need to restart procurement
Contract disputes
Failure to satisfy needs
Delays in delivery
Downtime
Legal action
Cost increases
Failure of contract
Full benefits not achieved
Delivery of unsatisfactory product
Contract/supply disputes
Potential liability to pay for unauthorised work
Possibility of legal action for perceived breach of contract
Unanticipated cost increases
Contract disputes
Loss of commercial opportunity
Unwarranted reliance on supplier for product support
Legal action
Damage to the agency's professional reputation
Delays in delivery
Downtime
Liability disputes
Misuse of resources
Legal action
Disruption to procurement activities
Progress on project disrupted
Less expertise
Failure to improve procurement and management processes
Procurement objectives not achieved
Possible failure in the future
Not achieving best return
Claims of unethical and unfair practices
Claims of bias and favouritism to organisations or individuals
Reduction in value for money
Plant, equipment and items (and parts of them) that have the potential to cut, rip, tear, abrade, crush, penetrate, produce projectiles or cause sudden impact.
Chemicals, compounds, materials, powders, dusts and vapours that have the potential to impair health, have adverse effects on human reproduction, cause disease or have explosive, ammable, toxic or corrosive properties.
A range of sources of energy that have the potential to cause harm, including electricity, heat, cold, noise, high powered light and damaging radioactive sources.
Activities that cause stress to the muscles and/or skeleton, including manual handling of people, animals, goods or materials and things or circumstances that can cause a person to slip, trip or fall at the same level.
Activities that are carried out where a person can fall or an object can fall onto people.
Hazards Events, systems of work or other circumstances that have the potential to lead to psychological and associated illness, including work-related stress, bullying, workplace violence and work-related fatigue.
Are potential stress tests and what if analyses undertaken monthly (eg.measuring sensitivity of exposure to market risk (VAR) and scenario analysis?
Are front and back office systems adequate and appropriately segregated to ensure the completeness and accuracy of processing, settlement and verification of the value of outstanding transactions?
Action
Analyse need accurately
Analyse need accurately
Use functional and performance requirements
Improve consultation with users
Obtain clear statement of work and definition of need
Obtain appropriate approvals before undertaking
process
Improve planning
Improve forecasting, planning and consultation with
users
Improve communication with potential tenderers
Implement best practice policies, guidelines and
practices
Maintain ethical environment
Improve training of personnel
Put suitable controls and reviews in place
Consider using a probity adviser
Improve communication with potential tenderers
Define the specification in terms of required outputs
Use functional and performance specifications
Ensure specification is consistent with needs analysis
Improve market knowledge
Use functional and performance specifications
Use functional and performance specifications
Implement a control mechanism to review specification
before release
Be familiar with requirements
Use functional and performance specifications
Use an Expression of Interest or Request for
Information to clarify requirements (be careful not to
infringe intellectual property rights or copyright)
Improve procurement planning processes
Improve market knowledge
Seek industry participation
Use the Industry Capability Network (ICN)
Improve implementation of procurement policies,
guidelines and practices
Improve tender documentation and clearly identify the
evaluation criteria in Request for Tenders
Provide staff with appropriate training and experience
Use standard documentation prepared by Crown Law
Select appropriate documentation for purchase type (ie.
goods, services, goods and services, or information
technology related)
Improve tender planning
Assess and allocate risks appropriately
Consult with Crown Law
Use commercially acceptable terms
Provide staff with appropriate tender planning and
procurement skills
Ensure staff have appropriate tender planning and
documentation training and experience
Improve tender planning and preparation
Review tender documents before issuing them and
ensure evaluation criteria contain the critical factors on
which assessment of tenders will be based
Implement standardised procedures for responding to
enquiries
Provide staff with appropriate tender management
training and experience
Respond in a timely manner to enquiries
Allow adequate time for tenderers to respond
As above
Answer queries in writing and provide copies to all
potential tenderers
Ensure that all potential tenderers are provided with
any addenda
Establish formal security procedures
Train staff in their obligations
Perform regular audits and reviews of security
processes
Advise tenderers of security measures
Use appropriate tender advertisement strategy to
increase competition (eg. consider advertising tenders
in other publications as well as the local paper)
Consult with the ICN to identify potential tenderers
Provide potential tenderers with advance notice of
tender requests
Improve tender documentation and specifications
Allow sufficient time for tenderers to respond
Actions as above for insufficient number of responses
Improve your market knowledge
Review specifications or conditions
Seek feedback from known suppliers on their non-
response
Provide staff with appropriate tender assessment and
evaluation training and experience
Improve tender assessment and evaluation processes
Maintain, audit and review evaluation procedures
Ensure that Evaluation Committee members declare
any conflicts of interest
Maintain, audit and review security procedures
Provide staff with appropriate training and experience
and monitor performance
Ensure that Evaluation Committee members
understand and sign Confidentiality Agreements
Improve market knowledge
Improve tender documentation
Conduct market research
Develop functional and performance specifications
Ensure evaluation criteria contain the critical factors on
which the assessment of tenders will be based and that
they are clearly identifiable to tenderers in tender
documents
Ensure evaluation criteria are appropriate and
measurable
Ensure that Evaluation Committee members sign
Declaration of Conflict and Confidentiality Agreements
Provide staff with appropriate tender evaluation,
financial and technical skills training and commercial
expertise
Improve evaluation procedures
Improve evaluation criteria and clearly identify them to
tenderers in tender documents
Reject unacceptable offers
Perform financial, technical and company evaluations
before awarding contract
Procurement Review Committee to review tender and
selection process prior to awarding contract
Ensure users are involved in the evaluation/selection
process
Improve technical evaluation procedures and train staff
as appropriate
Procurement Review Committee to review tender and
selection process prior to awarding contract
Improve communication, including ensuring that
Conditions of Contract form part of the Request for
Tender
Provide staff with training in contract planning and
management
Define terms carefully
Record each party's obligations
Clarify all ambiguities before signing the contract
Look at alternatives to share risk
Distinguish between essential and non-essential goals
and requirements
Establish baseline before negotiations
Distinguish essential goals from others
Consider variations to contract
Provide negotiators with adequate training
Provide negotiators with adequate training and support
Negotiate commercial terms
Terms should be fair and reasonable
Check final draft of contract with successful tenderer
Keep records of all negotiations and agreements
Procedure in place to ensure delegate's approval
obtained first
Provide negotiators with adequate training
Agree on prices and the basis of prices
Agree on a formula for calculating variations
Seek legal redress if non-acceptance causes loss
Negotiate but retain integrity of the contract
Ensure good contract administration and performance
management
Hold regular inspections / meetings and ensure
progress reports
Ensure all staff know responsibilities and conditions
Ensure good record keeping and documentation
Maintain up-to-date agency procedures and practices
Ensure all staff are suitably trained and experienced in
contract planning and management
Confirm verbal acceptance of contract with written
advice
Accept all contracts in writing
Ensure approvals are received before allowing work to
start
Ensure all contract amendments are issued in writing
Record all discussions and negotiations
Confirm instructions in writing
Ensure suitable clauses are included in the contract
Check that all obligations are covered in the contract
Agree on responsibilities
Implement appropriate safety standards and programs
Include appropriate packaging instructions in
specification
Agree on insurance cover for supplier to provide
Accept delivery only after inspection
Know when title of goods is transferred to buyer
Maintain an ethical environment
Follow and maintain fraud control procedures
Include requirement in specification and ensure
compliance in post-tender negotiation
Know the market
Accept risk and manage possible delay
Develop systematic evaluation methods, techniques
and evaluation criteria
Agree on performance criteria (with supplier and
customer)
Develop good relationships with suppliers
Include evaluation clause in the contract
Implement performance management strategies
Set reserve prices
Deal with reputable firms
Include disposal clause in initial contract
Maintain ethical environment
Sell by open tender
Document reasons for decision
Provide staff with appropriate training
Plant, equipment and items (and parts of them) that have the potential to cut, rip, tear, abrade, crush, penetrate, produce projectiles or cause sudden impact.
Chemicals, compounds, materials, powders, dusts and vapours that have the potential to impair health, have adverse effects on human reproduction, cause disease or have explosive, ammable, toxic or corrosive properties.
A range of sources of energy that have the potential to cause harm, including electricity, heat, cold, noise, high powered light and damaging radioactive sources.
Activities that cause stress to the muscles and/or skeleton, including manual handling of people, animals, goods or materials and things or circumstances that can cause a person to slip, trip or fall at the same level.
Hazards Events, systems of work or other circumstances that have the potential to lead to psychological and associated illness, including work-related stress, bullying, workplace violence and work-related fatigue.
Are front and back office systems adequate and appropriately segregated to ensure the completeness and accuracy of processing, settlement and verification of the value of outstanding transactions?
Chemicals, compounds, materials, powders, dusts and vapours that have the potential to impair health, have adverse effects on human reproduction, cause disease or have explosive, ammable, toxic or corrosive properties.
Activities that cause stress to the muscles and/or skeleton, including manual handling of people, animals, goods or materials and things or circumstances that can cause a person to slip, trip or fall at the same level.
Hazards Events, systems of work or other circumstances that have the potential to lead to psychological and associated illness, including work-related stress, bullying, workplace violence and work-related fatigue.
Risk Reporting AS AT 01-Jul-14
Adequate
Opportunities for
Improvement
Inadequate No Assessment Totals
V High 0 0 0 1 1
High 0 1 0 1 2
Medium 0 0 0 3 3
Low 0 0 0 4 4
Totals 0 1 0 9 10
Catastrophic Major Moderate Minor Negligible Totals
Almost Certain 0 1 0 0 0 1
Likely 0 0 1 0 0 1
Possible 0 1 1 2 0 4
Unlikely 0 0 0 2 0 2
Rare 0 0 0 0 2 2
Totals 0 2 2 4 2 10
Colour Code V High
High
Medium
Low
R
i
s
k

P
r
i
o
r
i
t
y
Assessment of Existing Controls
L
i
k
e
l
i
h
o
o
d
Consequence
0
1
2
3
4
5
V High High Medium Low
Risks - # by Priority
Preference Order Treatment
1 Avoid
2 Accept
3 Avoid
4 Mitigate
5 Transfer
6 Accept
Risk Management Option
Avoidance by not starting or continuing the activity that led to the risk
Accepting or increasing the risk in order to pursue an opportunity
Removing the risk source
Changing likelihood and/or Consequences
Sharing risk with another party
Retaining risk by informed decision
Term
Risk
Control
Residual Risk
Hazard
Issue
Risk Identification
Risk Analysis
Risk Evaluation
Risk Treatment
Residual Risk
Distinction between a Hazard and a Risk
Hazard
Risk
Type Estimation Description Indicators
High (probable) Likely to occur each year or more than 25% chance of occuring Potential of it occuring several times ithin the time period (eg. 10 years). Hac occurred recently.
Medium (possible) likely to occur in a 10 year time period or less than 25% chance oc occurrence
Could occur more than once within time period (eg. 10 years). Could be difficult to control due to some external
influences. Is there a history of occurrence?
Low (remote) Not likely to occur in a 10 year period or less than 2% chance of occurrence Has not occurred. Unlikely to occur.
High (probable) Favourable outcome is likely to be achieved in 1 year or better than 75% chance of occurrence
Clear opportunity which can be relied on with reasonable certainty, to be achieved in the short term based on current
management processes
Medium (possible) Reasonable prospects of favourable results in 1 year of 25% to 75% chance of occurrence
Opportunities which may be achievable but which require careful management. Opportunities which may arise over
and above the plan.
Low (remote) Some chance of favourable outcome in the medium term or less than 25% chance of occurrence
Possible opportunity which has yet to be fully investigated by management. Opportunity for which the likelihood of
success is low on the basis of management resources currently being applied.
Threats
Opportunities
Risk Likelihood/Probability of Occurrence
Definition
Effect of uncertainty on objectives (either positive or negative deviation from what is expected). Often expressed as a combination of the consequences of an event & associated likelihood of occurrence
Any measure or action that modifies risk. Includes any policy, procedure, practice, process, technology, technique, method or device that modifies or managed risk.
Risk treatments become Controls or modify existing Controls once they have been implemented.
Risk with probability of 100%. Ie. it has eventualised into an existing issue.
Potential to cause uncertainty. Risk includes the likelihood of it happening.
Risk left over after youve implemented a risk treatment option.
Present condition, event, object, or circumstance that could lead to or contribute to an unplanned or undesired event such as an accident. It is a source of danger
Future impact of a hazard that is not controlled or eliminated. It can be viewed as future uncertainty created by the hazard
Process of finding, recognising and describing risks involving identification of risk sources, events, causes and potential consequences
Process to comprehend the nature of risk and to determine the level of risk
Risk with probability of 100%. Ie. it has eventualised into an existing issue.
Process to modify risk that can involve:
- avoidance, taking or increasing a risk, removing the risk source, changing the likelihood, changing the consequences, sharing the risk (eg. Contracts), retaining the risk by informed decision,
Risk remaining after risk treatment
Business Category Risk Category Controls
Asset Management Business Continuity Adequate
Infrastructure Management Liability Opportunities for Improvement
Finance Environmental Inadequate
Clinical Governance Financial
Regulatory Compliance Political
Service Delivery OH&S
Corporate Governance Infrastructure, Assets & Systems
Operational Reputation
Market / Environmental
Strategic
Document Type Action Type Consequence
Strategic Plan Avoided (eg. don't do risky activity) Likelihood Negligible
Business Continuity Plan Accepted Almost Certain Medium
OH&S Policies & Procedures Removed (risk source removed) Likely Medium
Other Reduce Likelihood (eg. P&P, Training) Possible Low
Reduce Consequences Unlikely Low
Shared/Transferred (eg. Insurance) Rare Low
Retained (by informed decision)
Consequence
Minor Moderate Major Catastrophic
Medium High V High V High
Medium High High V High
Medium Medium High High
Low Medium Medium High
Low Medium Medium High