risk appetite in public sector organization

19 Pages·2014·0.58 MB·English

by  Noble Mufhandu

RISK APPETITE IN PUBLIC SECTOR
ORGANIZATION

IRM SOUTH AFRICA REGIONAL GROUP MEETING
DE BEERS;CROWN MINES
11 FEBRUARY 2014

THE EXPERIENCE OF EMBEDDING A CULTURE OF MANAGING

RISK IN THE GAUTENG DEPARTMENT OF HUMAN SETTLEMENT
CONTENT

• Background
• Risk Appetite - implementation
• Way forward
• Conclusion
BACKGROUND – RISK AND CHANGE
BACKGROUND – SIZE OF THE ORGANISATION
• Entire Department Staff Complement - 1590

• Budget Allocation
 Human Settlement Development Grant + Equitable
Share = 4.4 Billion

• Enterprise Risk Management Unit (staff complements)- 12

• Five Regions
 Tshwane
 Johannesburg
 Ekurhuleni
 Mogale & Meyerton
 Westonaria

• Four Urban Renewal Project
 Evarton
 Alexandra
 Bekkersdal
 Winterveld
BACKGROUND - TONE AT THE TOP
OFFICE OF THE MEC
MEC'S OFFICE
HEAD OF
DEPARTMENT
RISK MANAGEMENT
ENTERPRISE ANTI-FRAUD
INFORMATION CORPORATE
RISK AND
SECURITY GOVERNANCE
MANAGEMENT CORRUPTION
HUMAN SETTLEMENT CORPORATE GOVERNANCE, POLICY,
LOCAL GOVERNMENT
FINANCE
DEVELOPMENT SUPPORT AND MONITORING AND
INSTITUTIONAL SUPPORT
EVALUATION
BACKGOUND – RISK UNIVERSE
2009/10 2010/11 2011/12 2012/13
Housing Merged Merged Merged
20 risk exposures 21 Risk Exposures 14 Risk Exposures 8 risk exposures
Budgetary constraints to Rapid urbanization, Inability to meet targets for Inability to meet expected
eradicate housing backlog. population growth and in – Human Settlement Projects targets for Human
migration into Gauteng.
Settlement Projects
Delays in processing of Service delivery protest. Lack of Integrated Lack of Integrated
payments. Information Information Technology
Technology System System 2
Lack of suitable and well Lack of suitable and well Housing backlog and rapid Limited well-located land
located land for housing located land for human increase in housing for Human Settlement
development. settlement development. demand
Development
Inability to manage growth Insufficient Budget to Difficulty in acquiring Service delivery protests
of informal settlements as a provide and develop suitable
result of emigration and integrated infrastructure. and well-located land
immigration into the
province.
Lack of integrated and Poor management of land. Lack of integrated cohesive Fraud and corruption
coordinated plan between planning amongst the
National, Province, spheres
Municipalities, of Government to
Agencies/stakeholders i.e. deal with Human
Eskom, Department of Settlement
Public Transport, Road and
Works etc.
RISK APPETITE - DERTEMINANTS
• Personalities/People
– Culture & Behavior
– Leadership
– Power
– Decision making
• Business Model and Strategy
– Mandate, Vision, Mission, Structure
• Compliance with Rules and Regulations
• External environment
– Community needs
– Stakeholders needs
– Services Rendered
– Ethos , Values and Batho Pele
– Political will
RISK APPETITE - LEGISLATIVE MANDATE
• Corporate Governance King Report III – Chapter 4
 The role of HOD, CRO, Line managers and other officials
• PFMA
 Section 38 – Responsibility of the HOD
 Section 45 – Responsibility of other officials
• Treasury Regulations
 Sec. 3.2 – Annual Risk Assessment(emerging risks)
 Risk Management Strategy which include Fraud Prevention Plan
• Public Sector Risk Management Framework
• GPG Framework - COSO
 Guideline for Risk Management Processes – Adapt to our own
environment
• GPG Standards & Policy
 Ensures implementation of ERM and uniformity in the province –
Adopt as is
RISK APPETITE – OVERSIGHT
Oversight bodies Role
Executive Authority – Governance of ERM in Province
EXCO/Board
Head of Dept.(HOD)/CEO Forum Quarterly reviews Top risks
Audit Committee(AC) Quarterly reviews Top risks
GPG Risk Management Forum CRO meet quarterly – Status on
ERM Implementation
General Audit Services(GAS)- Conduct Risk based audit & test
Internal Audit ERM Implementation annually
Auditor General(AG) – External Annual reviews
Audit
SCOPA Review AG Report on Risk Matters
Public Service Commission Annual review ERM Implementation
National Treasury Test maturity levels (SSP)
National Human Settlement Annual review DORA - Grant
RISK APPETITE LEADERSHIP AND OWNERSHIP
• HOD
 Understood the need to embed risk management culture – PFMA Sec 38
Mandate for RM processes
 He gave unqualified support and priority – “Setting the Tone at the Top”
• MANAGEMENT(DDGs, CD &Directors)
 Difficult group to convince
 Own perception on risk appetite
 We had to fight for their time and attention with other departmental
priorities
 Rank was critical to them
• CRO
 Embed risk management to entire organization – Coordination and
Facilitation
 Get buy – in from all stakeholders
 Empower the leadership and the rest in risk management