The Auditor General has presented to the House of Representatives a report titled – Risk Management in Government Departments – An Audit Approach.  This report was compiled from information contained in publications on Risk Management by H.M. Treasury, UK National Audit Office and the Chartered Institute of Public Finance and Accountancy (CIPFA). 

This study is presented with the aim for furthering awareness regarding the need for Government departments and institutions to have risk management systems in place, and thus help public service managers better understand their role in this regard. 

All public sector organizations, similar to private ones have objectives and targets, and they also need to add value to their services.  On the other hand while meeting their outputs organizations are bound to safeguard their assets both tangible and intangible, which would also include their good reputation. 

Government departments are responsible for a wide and diverse range of services for citizens, for example, delivering services to the public such as social welfare benefits and health care, procuring and managing major equipment and construction projects, sponsoring research and development, regulating industry, protecting the environment and collecting revenue.  All these activities involve some form of risk - the risk that planned level of service delivery is not met, or may be delayed or that access is denied to some citizens intended to benefit from a government programme; the risk of financial loss, fraud, waste or inefficiency, or the risk that opportunities to deliver services in new ways are missed. 

Put more simply risk management is about managing resources wisely, evaluating courses of action, protecting clients and others from harm, safeguarding assets and the environment and protecting the organisation’s public image. 

At present the principles of corporate governance are being applied across the public service.  This means that the public service needs to consider risk management and how to handle risks in all its forms. 

Central and Local Government including government agencies and institutions are exposed to a variety of risks, some of which are easily identified while others are not easy to detect.  However, both these risks have similar responsibilities on Government. 

In the public sector there are many instances where risk management is being practised under other names such as health and safety, community safety, treasury management and so on.  What does need to happen is that every manager at every level needs to recognize the risk management of his or her job – to explicitly consider the risks surrounding their every day operations. 

Risks have, of course, always been managed but what is now needed is to formalize these processes to make them transparent, in line with the principles of corporate governance.  These make risk management an integral and explicit part of an organisation’s overall management arrangements.