Risk Management in the Department of Education - an Overview

1. Risk Management in the Department of Education -an Overview Education Department 21 July 2004

2. DoE’s Organisational Structure

3. DoE’s Stats for 2004-05. . . • FTEs: 8,292 • Number of students: >69,200 • Volunteers: >30,000 • Salary budget: $523,217,000 • Number of schools and colleges: 218 • Number of libraries: 54 • State Archives: 1 (2 sites) • Number of properties (owned and leased): ≈ 450 • Value of property portfolio: ≈ $1,154,311,000 • Value of contents: ≈ $174,081,000 • Others: Allport Library and Museum of Fine Arts

4. Risk Management is. . . . . . not merely about ‘avoiding’ events that could be detrimental to business activities. . . • Positive risk management culture includes: • understanding, managing and taking calculated and acceptable risks as part of managing business; • acceptance of risks at the right level is part of how things are being done. • Negative risk management culture includes: • staff being risk-averse, ignorant of risk or over confident in their risk taking; • lack of support from top, no structure, and reactive to events

5. Top level endorsement and active involvement Objectives established and needs identified Policies clearly defined and endorsed by top level, and known to stakeholders Robust and transparent risk management system Central risk repository Stakeholders understand and embrace procedures and processes RM is integral part of business activities Independent audit and evaluation procedures Cyclical review of RM activities to enhance process Key Features of Good Risk Management

6. Risk Management Cycle

7. DoE’s Major Areas of Risk and Associated Claims Costs • Workers Compensation • Property • Legal Liability • Information Security • Motor Vehicles

8. Risk Management in DoE in the 1990’s • Synonymous with ‘Insurance’ • Culture of ‘self insuring’ by DoE (in fact non-insuring) • Application for grants from Treasurer’s Reserve for high cost incidents • Commercial insurance cover • Mainly reactive • Onset of program to install fire and burglar alarms in schools and colleges

9. Milestones in DoE’s Risk Management Activities • Early 1990’s • Limited insurance cover for risks other than workers’ compensation • Participation in State Government W/C scheme • Late 1990’s • Implementation of improved OH&S and W/C procedures • 1999 • TRMF established • Early 2000’s • Development of pro-active risk management activities begins • 2002 • Risk Management Project 2002 • 2003 • Risk Management Committee established • Lindisfarne Primary School RM, and pilot projects in corporate areas • 2004 • Draft RM Strategy and Policy developed, commencement of ‘Roll-Out’

10. Workers Compensation • Significant progress achieved in recent years through: • cost reduction; and • enhanced and client-focused services. • 604 claims recorded in 1998, 514 in 2003, 188 in 2004 (1/2 year only) • Workers compensation payments reduced from 3% to 1.5% of total salary budget • Key aspects contributing to success: • personal contact at early stage; • speedy and client-focused responses to clients • ‘whole person’ approach; • eliminate ‘blame factor’; and • detailed record keeping.

11. Risk Management Project 2002 (RMP2002) • Endorsed by Secretary • Done by outside consultant in conjunction with DoE staff • 16 workshops for all management areas (incl. schools and colleges) throughout Tasmania • >800 risks identified and treatment actions for 80 risks developed • Final report recommended a structured, holistic approach to risk management

12. Public and employee safety standards Asset management and protection Loss of reputation Irrelevant program content and delivery HR management standards and practices Financial management and budget strategies Lack of risk appetite Information management strategies Communication (internal / external) Synergy between management areas Changes in community values Outsourcing arrangements System and process failure Preparedness to deal with emergencies in key areas Strategic Risks Faced

13. RMP2002 – Lessons Learnt • Backing of Head of Agency and senior executive critical • Direct involvement of staff at all levels and from a wide range of management areas necessary • Budget provision guaranteed to ensure implementation of key recommendations

14. Where we went to after RMP2002 • Development of a draft risk management policy statement • Lessons learnt: • Australian Standards AS/NZS 4360 provide good reference for basic and more involved risk management • Must be audience focused • Use KISS principle

15. Where we went to after RMP2002 • Formation of the Risk Management Committee • Members include: • Secretary (Chair) • Deputy Secretary (Corporate Services) • Director (Finance, Facilities and Business Strategy) • Director (Human Resources) • Director (VET Learning Strategies) • District Superintendent (Bowen) • Manager (Internal Audit) • Manager (Facility Services) • Member of the Senior Executive (UTAS) • Lessons learnt: • Support from top, and agency-wide representation critical

16. Where we went to after RMP2002 • Involvement of Internal Audit in the Risk Management Process • Internal Audit plays important part in RM • Lessons learnt: • Importance of close cooperation between IA and RM

17. Where we went to after RMP2002 • Draft Risk Management Plan completed including: • Development of concepts and documentation • Risk Management Committee involved in key aspects of RM (quarterly meetings) • Future development of ‘in house’ risk management system or purchase of commercial system • Lessons learnt: • Set reasonable goals and prepare for setbacks • Everything takes 2-3 times longer than planned • Importance of pilot projects

18. Where we went to after RMP2002 • Development of: • Risk Management Tool Kit and • Risk Management Templates (primary schools and corporate areas) • Lessons learnt: • Risk management still seen as ‘rocket science’ by some – need to demystify concept and processes • Keep templates simple, suitable for use by staff with little skill in RM • Use ‘Pareto’s Principle’ (80% / 20%)

19. Where we went to after RMP2002 • High level communication • Presentations to focus groups • Workshops • Help Desk • Website • Lessons Learnt: • Client focus / professional advice • Quick response • Follow-up

20. Where we went to after RMP2002 • Pilot risk management projects in: • Lindisfarne Primary School • Corporate Areas (Finance, Facilities and Business Strategy) • Lessons learnt: • Management support and ownership of project by participants critical • Recognise all staff members are ‘risk managers’ • Difficult to persuade staff that risk management is not an ‘additional task’ but integral part of day-to-day work practices • Conflicting priorities in the completion of the project • ‘KISS principle’

21. Where do we go from here? • Further refinement of RM strategy and plan • Pilot projects in: • Corporate and service areas; • School cluster in west of State • Followed by evaluation and report to RiMC • Development / acquisition of risk management system • Development of a risk management culture in DoE over time • Enhanced involvement of Internal Audit in Risk Management

22. Links and Resources • DoE Risk Management Website • www.education.tas.gov.au/admin/ff/risk/default.htm • Property Protection Scheme Page • www.education.tas.gov.au/admin/ff/risk/procedures/propertyprotection.htm • Risk Management Toolkit and Templates • www.education.tas.gov.au/admin/ff/risk/goodpractice/riskident.htm

23. Remember. . . • RM won’t solve all of your problems • But: It will make your work a lot easier. . .