3.4 Agency roles and responsibilities
The roles of the principal agency groups in reference to Risk Management are as follows:
NSW Treasury
NSW Treasury has developed a “Risk Management and Internal Control Toolkit” (Treasury Document
TPP 97-3) to assist agencies implement an efficient and effective Risk Management and internal
control framework.
The kit consists of:
• Risk Management and Internal Control Assessment Guidelines
• Risk Management and Internal Control Assessment Matrix
NSW Treasury provides assistance to agencies in the management of financial and economic risk,
government budgetary strategy and implications on Loan Council guidelines, including risk-sharing
principles. NSW Treasury will also be involved in the nomination of designated proposals.
Integrating risk management with economic appraisal and value management in the planning process
ECONOMIC APPRIASAL
RISK MANAGEMENT
VALUE MANAGEMENT
Note 1 At this stage, the risk a review involves many options and should therefore be limited to an overview
Note 2 The Plan and VM Study Report should address the preferred option in comprehensive detail
Note 3 The Value Management process can be used flexibly to address single issues eg. Clarify objectives or
multiple issues eg. agree objectives, identify and evaluate options.
•
.Develop Options (Note
3)
2
3
.Identify and Evaluate
Risks (Note 3)
3)
4
.Evaluate options (Note
. Prepare a Study Report
5
where required) for the
(
recommended option
(Note 2)
For each viable option
•
Establish the risk content
•
Identify risks of each
option
•
Assess their magnitude
•
Develop treatment
strategies
(
Note 1
)
Prepare a Risk Management
Plan (where required) for the
recommended option
Note
2)
(
4
. Evaluate options
5
. Select preferred option
. Modify Options in Light of
3
Risk Review and VM
Study
2
. Identify Options
1
. Specify Objectives
I Risk Management
Department of Public Works and Services
The Department of Public Works and Services (DPWS) provides assistance to central agencies on
technical and procurement risk generally, and provides Risk Management services to agencies in
development, management, procurement and asset management programs.
DPWS manages the interface with the construction industry and provides contract or project Risk
Management services for projects over $500,000.
Contract or project Risk Management relates to procedural aspects of procurement and project
delivery and is aimed primarily at ensuring probity, independence and efficiency for Government in
these processes.
Service Agencies
Service agencies must ensure Risk Management procedures for major projects are completed and
comply with designated and new project requirements, including the nomination of designated
proposals.
4 Risk Management Process
The objective of Risk Management is to identify and analyse risks and manage their consequences.
Risk Management involves several key steps that have general application and can be applied at
various stages of the asset cycle. The process outlined below should serve as a guide to agencies but
can be adapted to individual needs.
The process of Risk Management should commence at the strategic planning stage of a proposed
project. The steps in the process are:
Proposal familiarisation
• Define proposal/project scope and objectives
• Identify criteria for assessing the proposal or project
• Define the key elements and issues
Risk analysis
• Identify all risks that might impact on the proposal or project
• Assess the potential likelihood and consequences of each risk
• Screen risks to discard the minor risks having low impacts and low likelihood of occurrence
• Identify moderate and major risks that require management attention
Risk response planning
• Identify the feasible responses to moderate and major risks. Risk responses will include:
risk prevention
impact mitigation
risk transfer
risk acceptance
select the best response
• Develop risk action schedules for major risks
• Develop management measures for moderate risks
Reporting
• For major undertakings, prepare a Risk Management Plan
• For other projects, compile and collate risk action schedules and measures
Risk Management implementation
Implementing
Effect schedules,
management
measures or Plan
Monitor Review &
evaluate
Reporting
Collate schedules &
management
measures
or
Write risk
Management Plan
Response
Planning
Identify responses
Select best
responses
Develop action
& management
Risk Analysis
Identify risks
Assess risks
Rank risks
Screen minor risks
Proposal
Familiarisation
Define objectives
Identify criteria
Define key elements
