Embedding Risk Management In Further Education Presentation Feb 08

www.pkf.co.uk © PKF (UK) LLP

Embedding Risk Management in Further Education

NCN North West Region

4 February 2008

David McIntyre


Agenda

• About PKF and our services to the education sector

• Embedding risk management - introduction

• Risk management – is it working?

• Why does risk management fail?

• Practical tips for embedding risk management

• How do you know when you’ve succeeded?

• Risk management and assurance

• Summary

• Questions? and discussion


PKF and our services to education

• David McIntyre - Further education sector experience- Wider experience- Business risk services

• PKF- The firm- Key sectors- Ethos

• Services to the education sector- Education Services team- Investment in education [email protected]

0161 819 3657 / 07767 248967www.pkf.co.uk


Risk management – is it working?

• Introduced to FE in 2001 (Circular 01/04)

• Key benefits of risk management:

- Better service delivery

- Improvements in efficiency

- Effective decision making

- Supporting innovation

• Level of benefit related to risk maturity

• Even after 7 years, few have a fully embedded risk management framework

….No, despite huge effort by colleges, most risk management frameworks are stalled or are less effective than they could be


Risk management – is it working?

Risk Maturity Indicators Value to

organisation

Risk Naive No formal approach developed for risk

management

None

Risk Aware Scattered silo based approach to risk

management

Little

Risk Defined Strategy and policies in place and

communicated. Risk appetite defined.

Little

Risk Managed

Enterprise wide approach to risk

management developed and

communicated

Some

Risk Enabled Risk management and internal control fully

embedded into the operations

Lots


Why does risk management fail?

• Methodology too unsophisticated or too complex

• Methodology too focussed upon one user group

• Lack of understanding of key principles and benefits throughout organisation

• Framework not communicated throughout organisation

• Framework separate from management processes


Tips for embedding risk management

• Not a one size fits all approach

• Sometimes have to step back to move forwards

• Methodology

- Keep it simple

- Think about all the end users (Board, management, staff)

• Training and Implementation

- Ensure staff at all levels understand basic risk management principles and the benefits of risk management

- Ensure staff understand the agreed methodology


Tips for embedding risk management

• Make it live

- Use training to facilitate risk identification and evaluation

- Ask Board, management and staff to own their own risks

- Ask Committees and management groups to be risk focussed (tie back to agenda items, minutes etc)

- Combine approach with business planning, audit planning etc

- Set a cycle and maintain momentum


How will you know when you’ve succeeded?

• More measured risk taking

• Fewer surprises

• Greater risk thinking (decisions tied to risk/opportunity)

• Nimble with new issues

• Risk management cycle will no longer stall and will cease to be a burden

• Risk management champion will be administration role only

• More focussed Board, committee and management meetings


Risk management and assurance

Core Business

Risk Management

Managem

ent &

Governance

Qua

lity

Ass

uran

ce

Other Internal Assurances

LSC, OfS

TED etc

External Auditors

Other External Assurances

Internal

Audit


Risk management and assurance

• Risk management is part of wider assurance framework

• Assurance over risk management is required

- Is overall process adequate and effective?

- Do controls that mitigate risk continue to operate?

• Risk management can contribute to and direct other assurances

- Central to risk based internal audit

- Maps control and therefore can map assurance

- Consider use as part of overall assurance mapping


Summary

• In most cases risk management is not fully developed and can be better embedded

• Do you have a solid foundation?

• Follow the tips of risk management embedding at every stage

- Methodology

- Training and implementation

- Making it live

• Know what success looks like

• Consider your wider assurances


Questions? and discussion

Embedding Risk Management In Further Education Presentation Feb 08

Documents

Transcript of Embedding Risk Management In Further Education Presentation Feb 08