Canadian Evaluation Society Vancouver – June 4, 2003

Using Integrated Risk Management to Improve Strategic Outcomes and

Public Transparency

Basil Orsini – Director, Corporate Audits & Risks, Gatineau/Ottawa

Mardy Duncan – Director, Corporate Services, BC/Yukon Region

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Presentation Overview

HRDC 101

Evolution of Risk Management

Some HRDC Experiences

Evaluation Can Contribute to Risk Mitigation

• Student Loan Repayment• Insurance Premium

• CPP Contribution• Workplace Standards

Circle of Life- Basic Client Data -

Circle of Life- Basic Client Data -

Birth

Birth Schoo

lSchoo

l

Sickness

Sickness

Disability

DisabilityMaternit

y/ Paternit

y

Maternity/

Paternity

Volunteer

Volunteer

Unemployed

Unemployed

HomelessHomeless

RetiredRetired

Low Income Pensioner

Low Income Pensioner

DeathDeath

WorkWork

The Circle of Life Events: our Client FocusThe Circle of Life Events: our Client FocusHRDC helps holistically through life transitions

The Circle of Life Events: our Client FocusThe Circle of Life Events: our Client FocusHRDC helps holistically through life transitions

• Maternity Benefits• SIN• Child Tax Credit

• Student Loan• CSLP, CESG

• CPP +18 children’s benefit

• Employment Insurance

• CPP Disability• Disability Tax Credit

• Employment Leave• Education Savings Grant

• Child Tax Credit• Grant & Contribution

• Community Assistance

• CPP drop out provision• Re-training• CSLP re-payments suspended

• Labour Standards• Fed Workers' Compensation • Occupational Health & Safety

• CPP Pension• OAS Pension

• OAS - GIS• OAS - Allowance

• CPP Survivor Pension• CPP Death Benefit• CPP Child Benefit• OAS Survivor Allowance

HRDC Operations

HRDC INFRASTRUCTURE

Processing Centres(122+)

MIX: EI (100), IPOC (6), SIN + ROE (1),ISP (11), IT Centres (4).

Internet + Kiosks

MIX: Internal Kiosk (3,750), External Kiosk (1,070 phasingout), 121 websites

Third Parties (2,550)

MIX: EI (11), ISP (10), CSLP (4),CESG (1)

Service Canada (229)

Regional Offices (10)

NHQ (15 Branches)

HRCCs (320)Call Centres (26)

MIX: CPC (156), HRCCs (57),HRDC Partners (7), Heritage (9)

MIX: Main (100), Satellites (220)

MIX: Policy, Program Delivery,Processing, Corporate Support

MIX: Provinces, Municipalities, Aboriginal, NGOs, Financial Institutions, etc.

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Enterprise-wide Risk Management is a natural evolution in the art of risk management

Risk Management perspective

Val

ue c

ontr

ibu

ted

financial

operations

Risk Management

• Financial and hazard risk and controls

• Linkage understated• Treasury, insurance and

operations

management

Business Risk Management

• Business risk• Linkage is clearer• Business managers

accountable (risk-by-risk)

strategy

Enterprise-wide Risk Management

• Business risk • Linkage is

crystalline• Align strategy,

people, process, technology and knowledge on an enterprise-wide basis

is the

overall

process *

Define Objectives

IdentifyRisk

Factors

AssessRisks

Risk Response

Learning

Ris

k C

om

mu

nic

ati

on

s

* “Federal” approach with flexibility for different business lines!

IRM 101IRM 101

Types of Risk

•Event driven risk

•Risk arising from change

•Harness risk to your advantage and enhance stakeholder value

Hazard

Uncertainty

Opportunity

PriceWaterHouseCoopers

Risk Identification

Risk - Control Measures = Residual Risk

Residual Risk - Mitigating Measures = Un Managed Risk

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• Initial pilots led by internal audit needed to be connected to the management agenda.

• The Associate Deputy Minister directed that all branches report on their key risks.

• Senior executives are now fully engaged in managing their branch risks.

• IRM capacity is being progressively built.

Establishing An IRM Function- How We Evolved

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Establishing An IRM Function- Planning Process

• First report on 2002 Corporate Risks was appended to the first Corporate Plan

• Integrated Risk Management is being embedded into the new integrated planning process

• 2003-2005 Strategic Plan is being built on principles of integrated risk management:

– Priorities are key risk areas – Initiatives are mitigating strategies

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Practicing Integrated Risk Management

• We have adopted a common core process while encouraging flexibility by business line

• As a social instrument of the Federal Government, our risks include taking advantage of opportunities for Canadians

• Risk management reduces the likelihood but does not eliminate problems

• Risks should be framed for mitigation.

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BC/Yukon Experiences

• Value for senior management team

• Practical, useful business application

• Regional process

• Some illustrative outcomes

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HRDC Framework for IRM comprises …

• Departmental Objectives

• Approach to Implementation

• Process for Risk Management

• Framework for Prioritizing

• Developing Mitigation Strategies

• Implementation Standards

• Action Plan & Monitoring

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Corporate Risks, 2002

Public Confidence: Meeting citizen expectations for stewardship and security

Knowledge & Policy: Making an impact with comprehensive, timely, and strategic knowledge creation & policy analysis

Service Delivery: Meeting Citizen/Client expectations for consistent, efficient and effective service

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Human Resources: Recruiting and retaining the personnel to effectively deliver citizen-focused service

Information Technology: Resourcing /managing technology development and maintenance

Integrated Planning/Resourcing: Aligning objectives, resources, and accountabilities

… Corporate Risks, 2002

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Departmental Risk Profile for 2003 will cover:

• Policy

• Program Management

• Client Services

• Corporate Service Functions

• Change Management

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Areas for Strategic Risk Mitigation

• Policy & Program: Improvements to the Canadian workforce• Investing in People• Program Management

Services: Integrated, Cost-effective & Citizen-centred• Modernizing• Information Technology• Privacy

Organizational Effectiveness• Organizational Workforce• Integrated Management Framework• Change Management• Communications

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• Formative & Summative Evaluations

• Performance Measurement

• Results-Based Management

• Change Initiatives

How Does Evaluation most support risk mitigation ?

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Change Initiatives

Results-Based Management

Performance Measures

Formative & Summative Evaluations

ST

RA

TE

GIC

RIS

K A

RE

A

AREA OF FOCUS

Pro

gram

Po

licy

Gov

ernm

ent-

wid

e

Tool for Risk Mitigation Planning

Significant IRM Implementation Issues For Evaluation Are ...

Key Issues FOSTERING ...

Key Issues HINDERING ...