Session 1 Legislative Requirements + Other Frameworks Governing Risk Management Introduction • Welcome • Introduction • Overview Enterprise Risk Management Definition • A systematic, integrated and formalised process to identify, assesses, manage and monitor risks throughout the Institution rather than only in selected business areas or disciplines. Focus: • Enterprise-wide or Institution-wide • Risk management throughout the institution • Not focused on selected business areas or disciplines PFMA Requirements for Risk Management Risk management contributions: • Section 38 (a) (i) & Section 51 (a) (i) of the PFMA need for AO& Authorities of department, trading entity or constitutional institution have and maintain effective, efficient and transparent systems of financial and risk management and internal control. • Section 6 (2) (a) of the PFMA – NT norms and standards • Chapter 4 and 8 of the PFMA - financial planning, expenditure and liability management Intergovernmental Fiscal Relations Act (No. 97 of 1997) Risk management contributions: • Establishment , Functions , Meetings of Local Government Budget Forum • Process for revenue-sharing among the spheres of government • Revenue-sharing and allocation of money in terms of section 214 of Constitution • Commission’s recommendations • Division of Revenue Bill Intergovernmental Relations Framework Act (No. 13 of 2005) Risk management contributions: • Development of intergovernmental structures such as President’s Co-ordinating Council, National intergovernmental forums, Provincial intergovernmental forums, Municipal intergovernmental forums • Conduct of intergovernmental relations • Settlement of intergovernmental disputes MFMA, 2003 Risk management contributions: • Section 62 (c) (i) and 95 (c) (i) - municipality has and maintains effective, efficient and transparent systems of financial and risk management and internal control. • Section 20 (1) (iv), (v) and (vi) – NT norms and standards • Chapter 4 - municipal budgets • Chapter 6 – debt • Chapter 7 & 8 – roles and responsibilities • Chapter 3 - revenue management Occupational Health and Safety Act Risk management contributions: • • • • • • • • Establishment of technical committees of Council-. Health and safety policy.General duties of employers to their employees-. General duties of employers and self-employed persons to persons other than their employees.General duties of manufacturers and others regarding articles and substances for use at work. Offences, penalties and special orders of court King Code of Corporate, 2009 • The need to develop, risk management policy, strategy and plan • The development of a risk register • Continuous training and induction on risk governance • Establishment of risk committees • Appointment of the office of a Chief Risk Officer • On-going monitoring of the risk management system • Structured reporting and communication • The internal audit function - risk based audits Batho Pele Principles Contribution to Risk Management – – – – – – – – Consultation Setting service standards Increasing access Ensuring courtesy Providing information Redress Openness and transparency Value for money Public Sector Codes of Conduct Contribution to Risk Management • • • • • Relationship with the legislature and the executive Relationship with the Public Relationship among Employee Performance of Duties Personal Conduct and Private Interests Code of Conduct for Municipal Staff Members Contribution to Risk Management • General Conduct • Commitment to serving the public interest • Personal gain • Disclosure of benefits • Unauthorised disclosure of information • Undue influence • Rewards, gifts and favours • Council property • Payment of arrears • Participation in elections • Sexual harassment • Reporting duty of staff members • Breaches of Code Session 2: Governance Structure Risk Management Unit headed by the Chief Risk Officer Summary Functions Facilitating and Coordinating various risk management activities relating to developing; • risk management policy • risk management strategy • implementation plan • identification and assessment methodology • appetite and tolerance • classification. Monitoring the implementation of the response strategies Risk Coordinators Summary Functions • Intervening in instances where the risk management efforts are being hampered • Providing guidance and support to manage "problematic" risks Risk Management Committee Summary Functions • Assist AO / Authority to discharge their responsibilities for risk management. • Review and recommend risk management policy, strategy, implementation plan & appetite • Evaluate the extent and effectiveness of integration of risk management • Evaluate the effectiveness of the mitigating strategies Internal Audit Summary Functions • to provide an independent, objective assurance on the effectiveness of the Institution’s system of risk management • evaluate the effectiveness of the entire system of risk management • provide recommendations for improvement where necessary. • Execute risk-based audits Managers & Supervisors Summary Functions • Setting the tone for risk management in the respective units that they manage • Owning risks which the managers are responsible for managing • Managing the risks • Reporting the risks to relevant parties • Monitoring the risks for changes, management status and effectiveness of current controls Other Officials Summary Functions • Integrating risk management into their day-to-day activities • Applying the risk management processes in their respective functions; • Implementing the delegated action plans to address the identified risks; • Informing their supervisors and/or the Risk Management Unit of new risks and significant changes in known risks; • Co-operating with other role players in risk management Thank you .