Risk Management in the Department of Education -an Overview

Education Department21 July 2004

DoE’s Organisational Structure

Secretary

DS School Education

DS Corporate Services

DS OPCET

Dir Library and Information Services

Dir Office for Ed Review

State Archivist

Mgr Internal Audit

DoE’s Stats for 2004-05. . . FTEs: 8,292 Number of students: >69,200 Volunteers: >30,000 Salary budget: $523,217,000 Number of schools and colleges: 218 Number of libraries: 54 State Archives: 1 (2 sites) Number of properties (owned and leased): ≈ 450 Value of property portfolio: ≈ $1,154,311,000 Value of contents: ≈ $174,081,000 Others: Allport Library and Museum of Fine Arts

Risk Management is. . .

. . . not merely about ‘avoiding’ events that could be detrimental to business activities. . .

Positive risk management culture includes: understanding, managing and taking calculated and

acceptable risks as part of managing business; acceptance of risks at the right level is part of how

things are being done. Negative risk management culture includes:

staff being risk-averse, ignorant of risk or over confident in their risk taking;

lack of support from top, no structure, and reactive to events

Key Features of Good Risk Management

Top level endorsement and active involvement

Objectives established and needs identified

Policies clearly defined and endorsed by top level, and known to stakeholders

Robust and transparent risk management system

Central risk repository

Stakeholders understand and embrace procedures and processes

RM is integral part of business activities

Independent audit and evaluation procedures

Cyclical review of RM activities to enhance process

Risk Management Cycle

Risk Assessment Process

1. Establish the Context

2. Identify Risks

3. Analyse Risks

4. Evaluate Risks

5. Treat Risks

7.

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6.

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DoE’s Major Areas of Risk and Associated Claims Costs

Workers Compensation

Property Legal Liability Information

Security Motor Vehicles

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2001-02 2002-03 2003-04

WorkersCompensation

Property

Legal Liability

InformationSecurity

Motor Vehicles

Risk Management in DoE in the 1990’s Synonymous with ‘Insurance’ Culture of ‘self insuring’ by DoE (in fact non-

insuring) Application for grants from Treasurer’s

Reserve for high cost incidents Commercial insurance cover Mainly reactive Onset of program to install fire and burglar

alarms in schools and colleges

Milestones in DoE’s Risk Management Activities

Early 1990’s Limited insurance cover for risks other than workers’ compensation Participation in State Government W/C scheme

Late 1990’s Implementation of improved OH&S and W/C procedures

1999 TRMF established

Early 2000’s Development of pro-active risk management activities begins

2002 Risk Management Project 2002

2003 Risk Management Committee established Lindisfarne Primary School RM, and pilot projects in corporate areas

2004 Draft RM Strategy and Policy developed, commencement of ‘Roll-Out’

Workers Compensation

Significant progress achieved in recent years through: cost reduction; and enhanced and client-focused services.

604 claims recorded in 1998, 514 in 2003, 188 in 2004 (1/2 year only)

Workers compensation payments reduced from 3% to 1.5% of total salary budget

Key aspects contributing to success: personal contact at early stage; speedy and client-focused responses to clients ‘whole person’ approach; eliminate ‘blame factor’; and detailed record keeping.

Risk Management Project 2002 (RMP2002)

Endorsed by Secretary Done by outside consultant in conjunction

with DoE staff 16 workshops for all management areas

(incl. schools and colleges) throughout Tasmania

>800 risks identified and treatment actions for 80 risks developed

Final report recommended a structured, holistic approach to risk management

Strategic Risks Faced

Public and employee safety standards

Asset management and protection

Loss of reputation Irrelevant program

content and delivery HR management

standards and practices Financial management

and budget strategies Lack of risk appetite

Information management strategies

Communication (internal / external)

Synergy between management areas

Changes in community values

Outsourcing arrangements System and process failure Preparedness to deal with

emergencies in key areas

RMP2002 – Lessons Learnt

Backing of Head of Agency and senior executive critical

Direct involvement of staff at all levels and from a wide range of management areas necessary

Budget provision guaranteed to ensure implementation of key recommendations

Where we went to after RMP2002

Development of a draft risk management policy statementLessons learnt:

• Australian Standards AS/NZS 4360 provide good reference for basic and more involved risk management

• Must be audience focused• Use KISS principle

Where we went to after RMP2002

Formation of the Risk Management Committee Members include:

• Secretary (Chair)• Deputy Secretary (Corporate Services)• Director (Finance, Facilities and Business Strategy)• Director (Human Resources)• Director (VET Learning Strategies)• District Superintendent (Bowen)• Manager (Internal Audit)• Manager (Facility Services)• Member of the Senior Executive (UTAS)

Lessons learnt:• Support from top, and agency-wide representation critical

Where we went to after RMP2002

Involvement of Internal Audit in the Risk Management ProcessInternal Audit plays important part in

RMLessons learnt:

• Importance of close cooperation between IA and RM

Where we went to after RMP2002

Draft Risk Management Plan completed including: Development of concepts and documentation Risk Management Committee involved in key aspects of

RM (quarterly meetings) Future development of ‘in house’ risk management

system or purchase of commercial system Lessons learnt:

• Set reasonable goals and prepare for setbacks• Everything takes 2-3 times longer than planned• Importance of pilot projects

Where we went to after RMP2002

Development of: Risk Management Tool Kit and Risk Management Templates (primary

schools and corporate areas)Lessons learnt:

• Risk management still seen as ‘rocket science’ by some – need to demystify concept and processes

• Keep templates simple, suitable for use by staff with little skill in RM

• Use ‘Pareto’s Principle’ (80% / 20%)

Where we went to after RMP2002 High level communication Presentations to focus groups Workshops Help Desk Website

Lessons Learnt: Client focus / professional advice Quick response Follow-up

Where we went to after RMP2002

Pilot risk management projects in: Lindisfarne Primary School Corporate Areas (Finance, Facilities and Business

Strategy) Lessons learnt:

• Management support and ownership of project by participants critical

• Recognise all staff members are ‘risk managers’• Difficult to persuade staff that risk management is not an

‘additional task’ but integral part of day-to-day work practices• Conflicting priorities in the completion of the project• ‘KISS principle’

Where do we go from here?

Further refinement of RM strategy and plan Pilot projects in:

Corporate and service areas; School cluster in west of State Followed by evaluation and report to RiMC

Development / acquisition of risk management system

Development of a risk management culture in DoE over time

Enhanced involvement of Internal Audit in Risk Management

Links and Resources

DoE Risk Management Website www.education.tas.gov.au/admin/ff/risk/default.htm

Property Protection Scheme Page www.education.tas.gov.au/admin/ff/risk/procedures/propertyprotection.htm

Risk Management Toolkit and Templates www.education.tas.gov.au/admin/ff/risk/goodpractice/riskident.htm

Remember. . .

RM won’t solve all of your problems

But: It will make your work a lot easier. . .