Training Risk Management Methodology no 2

Report
TRAINING
RISK MANAGEMENT
METHODOLOGY
RISK MANAGEMENT PROCESS
Risk Assessment
- Analysis
- Categorize
- Prioritise
Risk Response
Risk Identification
- Handling/action Plan
Communication
Continuous
monitoring
&
Reporting
RISK MANAGEMENT FRAMEWORK
Risk identification
Risk classification
Risk assessment
Risk analysis
Risk prioritization
Risk management
Risk handling
Risk reporting
Risk control
Risk monitoring
Fraud management
STRATEGIC GOALS
-
Provision of Strategic leadership and creation of social compact for better health
Increase life expectancy
Decreasing Maternal and Child Mortality
Combating HIV & AIDS and decreasing the burden of decease from TB
Strengthening Health Systems effectiveness
o Re-engineering the Primary Health Care system
o Improving Patient Care and Satisfaction
o Accreditation of Health Establishments for compliance
o Availability of the improved health Infrastructure
o Improved Human Resources for health
o Strengthening Financial Management through M & E
o Improve Health Care Financial through implementation of NHI
o Strengthening health Information Systems
RISK IDENTIFICATION PROCESS
Each area / function is assessed and identified
from micro structure of the Department
The activities / processes that occur within
each area / function
The risks are identified
The risks are categorized
RISK CATEGORIES
ORGANIZATIONAL
RISK
RESOURCE RISK
COMPLIANCE RISK
Quality Care & Patient
Safety
Human Resources &
Staff Relations
Environment Health &
Safety
Corporate Governance
Financial
Legal & Regulatory
Operations &
Organizational Support
Information, Systems &
Technology
Policies
Reputation & Public Image Physical Assets
Inventories
Standards
Fraud & Corruption
RISK ASSESSMENT MATRIX
Impact
Likelihood
Extreme
(5)
None
(1)
Low risk
(5)
Minor
(2)
Medium risk
(10)
Moderate
(3)
High risk
(15)
Major
(4)
High risk
(20)
Likely
(4)
Low risk
(4)
Medium risk
(8)
High risk
(16)
High risk
(20)
Possible
(3)
Low risk
(3)
Low risk
(6)
Medium
risk
(12)
Medium
risk (9)
Medium risk
(12)
High Risk
(15)
Unlikely
(2)
Low risk
(2)
Low risk
(4)
Low risk
(6)
Medium risk
(8)
Medium risk
(10)
Rare
(1)
Low risk
(1)
Low risk
(2)
Low risk
(3)
Low risk
(4)
Low risk
(5)
Certainly
(5)
High risk
(25)
RISK RATING
IMPACT
Rating
Assessment
Definition
1
None
2
Minor
3
Moderate
Negative outcome/ opportunity likely to have relatively moderate impact on ability to meet objectives
4
Major
Negative outcome/ opportunity likely to have relatively substantial impact on ability to meet objectives
5
Extreme
Negative outcome/ opportunity likely to have negligible impact on ability to meet objectives
Negative outcome/ opportunity likely to have relatively low impact on ability to meet objectives
Negative outcome/ opportunity likely to have critical importance on ability to meet objectives
LIKELIHOOD
Rating
Assessment
1
Rare
2
Unlikely
3
Possible
4
Likely
5
Certainly
Definition
Risk is conceivable but only likely to occur in extreme circumstances
Risk occurs infrequently and is unlikely to occur in the next 3 years
Risk has an above average chance of occurring at least once in the next 3 years
Risk could easily occur, and is likely to occur at least once in the next 12 months
Risk is already occurring, or is likely to occur more than once in the next 12 months
CURRENT CONTROLS
EFFECTIVENESS CATEGORY
CATEGORY DEFINITION
FACTOR
Very good
Risk exposure is effectively controlled and
managed
20%
Good
Majority of risk exposure is effectively
controlled and managed
40%
Satisfactory
There is room for some improvement
65%
Weak
Some of the risk exposure appears to be
controlled, but there are major deficiencies
80%
Unsatisfactory
Control measures are ineffective
90%
RATING OF RISKS
Risks were rated according to likelihood and impact :
Rate risks according to impact and likelihood in
absolute terms (inherent risk) i.e. without taking
controls into consideration
Rate the effectiveness and adequacy of controls that
are currently in place
Rate the risks according to impact and likelihood
giving consideration to the effectiveness and
adequacy of the controls (residual risk)
RISK TOLERANCE LEVELS
RISK LEVEL
ACTION AND LEVEL OF
INVOLVEMENT REQUIRED
• Accept, but monitor
• Manage by routine procedures
within the program
Low Risk
Score 1-7: Areas require no
further review or attention
Medium
Risk
Score 8-14: Areas require
• Unacceptable level of risk
management attention within • Inform CEO/Senior Manager/
the next three months
responsible manager
• FS Health Senior Management
involvement/ attention is essential
to manage risks – provide
appropriate report
High Risk
Score 15-25: Areas require
immediate management
attention
• Unacceptable level of risk
• Inform CEO/Senior Management/
responsible committees
• Immediate action required
RISK APPETITE LEVELS
Risk appetite levels were set at risk scores 1-7.
Areas assessed with risk scores of 1 – 7 require
no further review or attention and were
therefore acceptable
THE RISK OWNER
• Risk owners nominated should assume responsibility
for developing effective risk response plans
• The risk Owner should be senior staff member or
manager
• He/she should have sufficient technical knowledge
about the risk and/or risk area for which a response is
required
• The risk owner may delegate responsibility (but not
accountability) to his/her direct reports for detailed
plan development and implementation

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