Enterprise Risk with Local Government

1. Enterprise Risk with Local Government

2. Enterprise Risk • a process, effected by an entity'sboard of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and managerisks to be within its risk appetite, to providereasonable assuranceregarding the achievement of entity objectives." Business Dictionary.com

3. Manningham – 15 Enterprise Risks • Financial; • Asset Management; • Contract Management; • Legislative Compliance; • Public Health; • Climate adaptability and Emergency Management; • Information Technology Reliance; • OH&S

4. Manningham – 15 Enterprise Risks • Fraud; • Planning (Strategic and Statutory); • Infrastructure Investment Provision; • Provision of Services; • Adverse Impact of Changes in Government Policy; • WorkForce Management; • Governance.

5. Manningham – 15 Enterprise Risks

6. Feedback • Some 30 Councils provided information

7. Risk Categories Note: Quite a few Councils use more than one category – Nearly all use Operational – so not included.

8. Variation • There was a lot of variation in definitions and structure across Councils. • Not necessarily a bad thing?

9. Strategic Risk • A possible source of loss that might arise from the pursuit of an unsuccessful business plan. For example, strategic risk might arise from making poor businessdecisions, from the substandard execution of decisions, from inadequate resourceallocation, or from a failure to respond well to changes in the business environment. Business Dictionary.com

10. Operational Risk • Probability of loss occurring from the internal inadequacies (could also be a failure to identify a risk - RC) of a firm or a breakdown in its controls, operations, or procedures. Business Dictionary.com

11. Project Risk • The exposure to a company that arises from taking on a particular task. A project risk can be internal to the business, it can involve external events or it can stem from any other circumstances that can hamper the project's overall success and result in loss or embarrassment to the firm undertaking it. Business Dictionary.com

12. Financial • The probability of lossinherent in financingmethods which may impair the ability to ensure financial sustainability or provideadequatereturn. Business Dictionary.com

13. Council List Can provide list – for distribution – issue to remove Council name or not

14. My Thoughts • I wanted to look at categories that reflected the structure of the Municipality and that I thought that employees could understand.

15. MCC Enterprise Risk Management System Impacts, Influences, other risks Council (Corporate Risks) Existing Service and Projects (Operational Risks) Strategic Risks Council Plan Objectives Councillors New Services and Projects Municipality (Community Risks) Impacts, influences and other risks MCC Impacts and Influences Society

16. Corporate • Is the type and probability of a loss of significant enough proportion to impact and impede the Council’s management structure, operations, legislative obligations, affect Council’s reputation and /or capacity to provide services to the municipality. The consequences of this type of event will generally impact a number of Service Units.

17. Strategic • A potential source of loss that might arise from the pursuit of the Council and/or other Plans. The loss could arise as a result of the development of the plan, unknown factors in making decisions, from the execution of decisions, from resourceallocation, or from a failure to respond well to changes in the business environment.

18. Operational • Probability of loss occurring from internal influences resulting in, failure to meet service standards, injuries to employees or other person/s and/or damage to Council assets, through failure to identify a risk, lack of controls, operations, or procedures over an identified risk within established Council operations and service delivery.

19. Community • As it relates to Council objectives, is the potential for a sudden or gradual loss impacting the municipality leading to a reduction in amenity, standard of living, community safety or community health and well being and/or environmental degradation.

20. Rationale Corporate Risk Executive Management Team Monitors, supervises, allocates resources Operation Risk • Service Unit • Controls, monitors & reports • Activities & resources directed • at risk Driver / Potential for additional Risks Strategic Risks Assets & Services provided - Justification Council Plan Objectives Councillors Driver / Potential for additional Risks Community Risks or expectations. New Services and Projects

21. MCC Enterprise Risk Management System Does the Risk have the capacity to significantly impact / impede Council’s management structure, operations, reputation or service delivery by Council? Corporate Risk Yes (2nd Corp) Significant Consequences No Operational Risk Does it relate to an existing service/project? Yes No No-longer new & retained Does it relate to a emerging risk, new service, project or strategic objective? Strategic Risks Yes No Yes Community Risk Service? Is there an existing service targeted at risk? Yes No No Is a decision on a new service targeting the risk required? Yes No Community Risk outside Scope of Council objectives.