Enterprise Risk Management

104SHAYLENE ADONIS
CHIEF RISK OFFICER

Risk management, a Corporate Governance imperative,  is one of Management’s core responsibilities in terms of Section 62 of the Municipal Finance Management Act (MFMA) and is an integral part of the internal processes of the Municipality. 

 

It is a systematic process to identify, evaluate and address risks on a continuous basis before such risks can impact negatively on the service delivery capacity of the Municipality. It also focuses on reducing materialized risks to acceptable levels, as well as maximizing opportunities available to the organization.  It is council’s position that when the function of Risk Management is properly executed, it will provide reasonable assurance that the institution will be successful in achieving its goals and objectives.

In endeavor to enhance risk management processes by ensuring a truly integrated and enterprise-wide approach, the City has in place an Enterprise Risk Management Policy and Strategy which is reviewed annually. The application and guidance thereof ensures, amongst other things:

  • more sustainable and reliable delivery of services;
  • informed decisions underpinned by appropriate rigor and analysis;
  • reduced waste;
  • prevention of fraud and corruption;
  • better value for money through more efficient use of resources;
  • better outputs and outcomes through improved project and program management;
  • aligning risk tolerance and strategy;
  • pursuing institutional objectives through transparent identification and management of acceptable risk;
  • enhancing risk response decisions and reducing operational surprises and losses;
  • Seizing opportunities and increasing the probability of achieving objectives.

Enterprise Risk Management involves:

  • Objective setting;
  • Risk Identification;
  • Risk Assessment;
  • Risk Response;
  • Communication and reporting; and
  • Monitoring and review

 This subsection’s key performance areas include:

  • Enterprise Risk Management;
  • Project Risk Management;
  • Fraud Risk Management;
  • Business Continuity Management; and
  • Legal Compliance Risk Management

The City has in place a Enterprise Risk Management Committee reporting to the Audit Committee, Council and the Municipal Public Accounts Committee (MPAC) as oversight.  The Chief Risk Officer co-ordinates activities and is in the process of setting up a fully functional Enterprise Risk Management Unit.  Risk Champions in each department report to Management on risk management matters and co-ordinate risk management activities in their respective business units. 

Risk Assessments are conducted, reviewed and updated annually and on a continuous basis- and are carried out on both a strategic and operational level to ensure a thorough approach. 

The Municipal Manager is the ultimate Chief Risk Officer and is responsible for championing risk management and ensuring that its activities are monitored through performance management throughout the organization.

Enterprise Risk Management Role Players

It must be noted that there are varying levels of risk maturity in local government, and the City of uMhlathuze is at an advanced stage in this regard.  

Exciting news is that the City now has in place a Business Continuity Management (BCM) Policy, Strategy and Plan in place for the Richards Bay Civic centre. Business Continuity ensures that there are solid and tested plans in place for cases where the building is inaccessible following a disaster. It ensures that we are able to continue to provide services to the public with minimal interruption so that our mandate to deliver services to our communities, is not compromised. 



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