Governments face myriad risks
in their efforts to effectively deliver important public
services. One category of risk is the economic and policy
environment, which is always in flux. Each change has the
potential to reveal new areas of risk in the performance
landscape. Moving from the external to the internal
environment, i.e., human resources, vendor relationships,
business processes, and operating procedures – each contain new
sources of risk. Unmanaged risks can loudly crash a program or
subtly undermine its performance. The most effective
perspective on these risks is from the enterprise level, a view
of the whole that enables comprehensive solutions.
Our risk management services
for government clients range from establishing Enterprise Risk
Management (ERM) programs to implementing responses to
specifically identified risks. The following three examples
illustrate the range and flexibility of our work:
For one federal agency, ADI has
been helping to build its ERM program. This program is COSO-based
but also incorporates ideas from ISO 31000 and other sources.
The current phase involves working with senior managers, in an
office by office review to identify and catalogue risks. At the
same time, we are building a database of those risks to
facilitate tracking changes in risk profiles and the
effectiveness of risk management strategies.
Another federal client was concerned that structural changes in
the banking industry presented a risk to fulfilling its mission
of encouraging bank lending to small businesses. Our client
needed a deeper assessment of this risk. We were part of a team
retained to conduct in-depth case studies of six large banks
that provided examples of this structural change and that had
been active lenders to small businesses. We were able to
improve our client’s understanding of this risk and recommend
ways to mitigate this risk.
another client, our focus was demonstrating the effectiveness of
a risk management strategy. The client was a federal agency
whose mission was to stimulate economic development and create
jobs through block grants to state and local governments. The
risk was that funds for those grants could be cut off, putting
the mission in jeopardy. To save the mission, a new approach
was needed. We developed and implemented a demonstration
program showing how grantees could, in effect, recycle
previously granted funds that these governments had loaned to
new and small businesses. For grantees with strong programs,
this recycling option proved to be a worthwhile opportunity to
continue the federal mission.
Contact us to see how ADI can assist you
with your Enterprise Risk Management needs.