Public Sector Risk Management: A Key to Efficient Governance and Safety

In a bid to ensure the effective allocation of public resources, the Government has launched a comprehensive risk management framework aimed at promoting sound governance practices across all Public Sector Entities (PSEs).

Effective Allocation of Public Resources

According to Section 32 of the Public Finance Act, CAP 348, the Internal Auditor General (IAG) is responsible for ensuring the effectiveness of risk management in PSEs. The Government has recognized that risk management is an integral part of public sector governance, providing assurance to the achievement of government objectives and increasing stakeholders’ confidence.

Risk Management Guidelines

The Ministry of Finance and Planning has taken a proactive role in developing guidelines for the adoption and implementation of effective risk management practices across the public sector. Accounting Officers of all PSEs are required to adopt and implement these practices in their respective entities.

Adoption of Risk Management Standards

The guidelines are written in line with the ISO 31000:2018 Risk Management – Principles and Guidelines, acknowledging that there are several best practices and standards for managing PSE risks. All PSEs are required to comply with minimum requirements of the guidelines and industry-specific standards.

Implementation Requirements

To ensure effective risk management, all PSEs are required to develop, implement, and enhance a risk management framework and process that includes:

• A risk policy, culture, and structure for identifying, recording, and monitoring risks.
• Procedures in line with ISO 31000:2018 risk management process or industry-specific standards.
• Integration of the risk management process into strategic, budgeting, and operational business planning activities.
• A risk register for recording, rating, profiling, monitoring, and reporting identified risks.
• Established processes for monitoring, reviewing, reporting, and enhancing risk management and governance systems.
• Procedures for incident management.

Implementation Roles and Responsibilities

The following executive authorities, oversight organs, and officials have implementation responsibilities:

• Permanent Secretary - Treasury (Paymaster General): overall responsibility for ensuring effective application of risk management processes, procedures, and practices in all PSEs.
• Internal Auditor General: responsible for guiding the adoption, implementation, and enhancement of risk management practices across the public sector; providing support and guidance to PSEs; conducting reviews and assessments; and receiving quarterly implementation reports.

Commitment to Effective Risk Management

The Government is committed to ensuring that risk management becomes an integral part of public sector governance, promoting efficiency, effectiveness, and transparency in the use of public resources.