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Risk Management

 

Provincial Risk Management Mission:

Facilitating the implementation of effective risk management and good governance principles in the North West Provincial Departments.

 

1.DEFINITIONS

“Risk Management” means: A proactive and systematic process to: Identify, evaluate & address risks on a continuous basis before such risks can impact negatively on the institution’s service delivery capacity. It is an integrated part of management and is designed to provide reasonable assurance that institutional objectives will be achieved

“Risk” means:
An unwanted outcome, actual or potential, to the Institution’s service delivery and other performance objectives, caused by the presence of risk factor(s). Some risk factor(s) also present upside potential, which Management must be aware of and be prepared to exploit. This definition of “risk” also encompasses such opportunities.

 

2. LEGAL MANDATE PUBLIC FINANCE MANAGEMENT ACT

In terms of Section 38 (1)(a) (General responsibilities of accounting officers) of the Public Finance Management Act (No.1 of 1999 as amended by Act 29 of 1999), The accounting officer for a department, trading entity or constitutional institution must ensure that the department, trading entity or constitutional institution has and maintains:

i) effective, efficient and transparent systems of financial and risk management and internal control AND In terms of Section 18 (2) (Functions and powers) of the Public Finance Management Act (No.1 of 1999 as amended by Act 29 of 1999), A provincial treasury (Provincial Risk Management):


i) Must enforce this Act and any prescribed national and provincial norms and standards, including any prescribed standards of generally recognised accounting practice and uniform classification systems, in provincial departments by:
  • Implementing specific prescripts pertaining to risk management in the North West Provincial Government.
  • Reporting non compliance to relevant stakeholders i.e. Broader EXTECH, EXCO, Audit Committee, Risk Management Committee e.t.c. to assist with implementation of effective risk management in the Provincial Departments.
  • Developing the Provincial Risk Management Strategy to monitor and assess the implementation of Risk Management by Provincial Departments.
  • Ensuring compliance with Treasury Regulations which require that:
    1. The Accounting Officer must ensure that a risk assessment is conducted regularly to identify emerging risks for the institution
    2. The risk management strategy, which must include a fraud prevention plan, must be used to direct internal audit effort and priority and to determine the skills required of managers and staff to improve controls and to manage these risks.
    3. The risk management strategy must be clearly communicated to all officials to ensure that it is incorporated into the language and culture of the institution, and embedded in the behaviour and mindset of its people.
  • Ensuring compliance with the Public Sector Risk Management Framework adopted as the Provincial Risk Management Framework.
ii) Must monitor and assess the implementation in provincial Departments of national and provincial norms and standards by;
  • Ensuring that all departments have Risk Management policies, implementation strategies and fraud prevention policies and plans approved by the Accounting Officers and
    1. Departmental risk management policies are continually revised in line with the Public Sector Risk Management Framework to ensure its continued relevance within the organisation
    2. Departmental fraud prevention policies are continually revised in line with the Framework to ensure their relevance within the organisation
  • Ensuring that all Departments have conducted the strategic and operational risk assessments (at a minimum annually) and developed strategic and operational risk registers and action plans on how to manage their risks that will be included in their Strategic Support Plans.
  • Conducting quality reviews on strategic and operational risks identified by Provincial Departments (risk registers).
  • Building a risk profile of the North West Provincial Departments by consolidating the top 10 risks of all Provincial Departments.
  • Preparing a Provincial Risk Management Report by consolidating Quarterly Risk Management Progress Reports of Provincial Departments to provide the status quo of Risk Management in the North West Provincial Government.
  • Assessing the proper functioning of the Risk Management Committees in all Departments.
  • Reviewing the proceedings of the Risk Management Committees in the Provincial Departments

iii) May assist provincial departments in building their capacity for efficient, effective and transparent financial management by;

  • Being in constant contact with the Chief Risk Officers of all Departments to provide guidance and leadership in the Province.
  • Using the Provincial Risk Management Forum to build capacity in implementing risk management in the Departments.
  • Developing the Provincial Strategic Support Plan to guide the implementation of Risk Management in the North West Provincial Government and to ensure that:
    1. Public Sector Risk Management Framework is adopted as the Provincial Risk Management Framework
    2. Public Sector Risk Management Framework is customised and adopted by the Provincial Departments as its Framework
    3. All Provincial Departments incorporate the responsibilities of risk management into the performance agreements of the relevant officials
    4. Each Department develops value add risk management key performance indicators
    5. Provincial Departments’ Risk Management policies are supported by a strategy and the implementation plan which includes a process that can be used by business unit risk managers to communicate changes in their risks profiles to the Chief Risk Officer
  • Providing Risk Management training as and when needed by the Provincial Departments

3. BENEFITS OF RISK MANAGEMENT

  • Effective and efficient accomplishment of the Department’s strategic objectives;
  • Supports strategic and business planning;
  • Business continuity on service delivery and improved performance;
  • Greater transparency in decision-making and ongoing management processes;
  • Enhanced accountability
  • Reduced audit qualifications;
  • Proper allocation of resources
  • Efficient, effective and economic use of resources
  • Early warning system
  • Promote a culture of accountability

Member of Executive Council
MEC Motlalepula Rosho
Head of the Department
HOD Mr Ndlela Kunene