1 Integrated Risk Management: A Provincial Perspective Presentation by the Public Service Commission to the Portfolio Committee on Public Service and Administration Parliament, Cape Town 14 May 2003
Jan 29, 2016
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Integrated Risk Management: A Provincial Perspective
Presentation by the Public Service Commission to the
Portfolio Committee on Public Service and Administration
Parliament, Cape Town
14 May 2003
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Risk Management: Provincial Perspective
First report on risk management practices in the public serviceThe report provides an overview of the status of integrated risk management in the public serviceMethodology: cross departmental consultative workshops to determine status of risk management and raise awarenessWorkshops were done in partnership with the KZN Provincial Treasury.
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Provincial Workshops
Consultative workshops held in seven of the nine provinces in 2001: Eastern Cape Northern Cape Western Cape Mpumalanga Free State Limpopo Province KwaZuluNatal
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Workshop Focus
Participation was focused on heads of department and senior managers with the view to: Establish awareness and commitment at
senior level; and Ensure that the utilisation of risk management
is cascaded down in departments by means of leadership initiatives
224 senior and middle managers attendedAttendance in the majority of cases was unsatisfactory.
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Risk Management: Workshop Aims
Promote awareness amongst senior managers on the use of risk management as part of daily activities to: improve service delivery and prevent fraud and corruption
Determine the status application of risk management practices in provincial administrations.
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Risk Management: Workshop Aims
Identify systemic gaps regarding the application of risk management practices Provided officials with a theoretical framework of risk management.
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Workshop Structure
Provide a theoretical overview of the application of risk management principles and practices as it relates to integrated strategic and planning processes Provide participants with relevant material on best practices used elsewhere in the world.
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Workshop Structure
Provide understanding on the roles, responsibilities and relationships in the application of risk managementProvide officials with an opportunity to gain experience from good practices elsewhere in the public service.Provide an opportunity to discuss relevant provincial barriers and reflect on “in house” experience and the level of institutionalisation.
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Risk Management: Findings
Formal Commitment to risk management processes exists at highest levels
Awareness is high at the level of accounting officers and internal audit components due to legal imperatives of PFMA
Awareness levels of risk management are in general low at all institutional levels
Pockets of excellence exists in some provinces.
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Implementation Barriers: Findings
Limited integration between strategic planning processes and strategic risk assessment exercisesThe extent to which fraud prevention plans are based on risk assessment exercises is questionable in most departmentsThe use of consultants to drive and implement risk management processes are prevalent in majority of provinces. The contents of the reports are not cascaded to lower level staff. Consequently the rationale for internal control measures within the risk management framework is not communicated down to supervisory levels.
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Implementation Barriers: Findings
5 provinces have not repealed the Exchequer Act. Some of these arrangements are in conflict with the PFMA and it leads to confusion and uncertaintyAll provinces indicated a lack of capacity and resources to ensure effective “role out” of the learning experience to supervisory level Effective implementation of a risk management framework is hampered by the inability to provide Officials at operations level (9-12) with the required background information, knowledge, skills and tools to implement risk management.
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Risk Management: Best Practice
A Comprehensive PFMA compliance monitoring system was developed by the Eastern Cape Provincial Treasury by Sept 2001 when report was completed One area is fraud prevention Implementation Plans The level of compliance of each department is
expressed in relation to the average of the province and stated aim of the Provincial Treasury
The level at which questions on the completion, communication and implementation of the fraud prevention plan are addressed, is used as a basis for measurement.
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Risk Management: Best Practice
Best practice was developed and implemented in KZN and Western Cape specificallyWestern Cape (Shared Service Centre) developed a transversal control risk model for the provinceKZN developed a Provincial Internal Audit Act (2001). Internal Audit functions as a statutory body on the basis of being a shared service for the province.
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Risk Management: Best Practice
The organisational structure in KZN makes provision for separate Risk Management and Internal Audit Functions Internal Audit focus on preventative action and secondly on compliance auditingRisk management component is divided into two: High level specialist assisting departments
with risk identification Fraud detection and recovery section Fourteen posts dedicated to this
component
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Risk Management: Regulatory Framework
PFMA and Chapter Three of Treasury Guidelines: Responsibility for facilitating a risk assessment
vests with the Accounting Officer with the view to determine the material risk to which the institution may be exposed to and to evaluate the strategy to manage that risk
Relevant Treasury to be provided with a certificate by no later than 30 June 2001 indicating that a risk assessment wad done and a fraud prevention plan is operational.
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Regulatory Framework: Continued
Internal Audit Unit must prepare, in consultation with and for approval by the audit committee, a rolling three year strategic internal audit plan based on its assessment of risk for the organisation, having regard to its current operations, the proposed strategic plan and its risk management plan
These Treasury regulations was an amendment on the 2000 version requiring a certificate by end March 2001.
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Regulatory Framework: Compliance
National Treasury conducted a survey in March 2001 to assess the level of compliance
Two of the ten focus areas concentrated on the development of fraud prevention plans and the undertaking of risk assessments
Data is for April 2001 The number of departments complying is
expressed as a percentage of the departments in the province.
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Compliance by Provincial Departments: April 2001
100% 80-90% 50-80% 20-50%
Gauteng,
KZN
N West
W Cape
Limpopo
None Eastern Cape
N Cape
F State