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Monitoring and Evaluation Systems for NARS organizations in Papua New Guinea
Day 4. Session 12. Risk Management
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Learning objectives By the end of this session, participants will be able to: Define risk management Analyse risk management Identify examples of risks to the program Plan and develop strategies to deal with those risks
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Risk any factor (or threat) that may affect adversely the successful completion of an intervention achievement of its results and objectives adverse effect on resources, time, cost and quality
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Risk Management Purpose: to apply a systematic process to reduce the effects of uncertainties that may compromise the achievement of the intervention’s results and objectives
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Risk Management process that assists managers at all levels to make correct and informed decisions for organized assessment and control of risks involves identification, analysis, evaluation and monitoring of risks, and development of strategies to deal with those risks
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Risk Management The risk management process comprises five steps:
Identification and definition of risks identify, define and record risks with stakeholders Conduct risk assessment determine causes, quantify them and estimate their likelihood and consequences Conduct risk evaluation consider and prioritize according to potential impact; determine level of acceptability
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Risk Management Develop risk management plan
identify the actions required to reduce, contain and control risk; assign responsibilities for actions; define risk indicators, risk monitoring arrangements and reporting mechanisms Implement risk management plan – manage, monitor, update risks implement mitigating actions; verify occurrence of risk using indicators; review/update risks regularly
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Risk Management in NARS organizations
Risk management and monitoring at all four organizational levels. organization to analyse and manage risks that may impede the achievement of the vision and mission, or purpose and goal of the NARS organization Program to analyse and manage risks that may impede a particular program from achieving its purpose
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Risk Management in NARS organizations
Project to analyse and manage risks that may impede a particular project from achieving its outputs or purpose Project activity to analyse risks that may impede a particular project activity to implement its tasks (i.e. work plan), use its budget efficiently and achieve its outputs
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Risk Management in NARS organizations
Risk Analysis Collaborative approach involving the key stakeholders of intervention Project activity and project project leader and project teams, partners Program project and program leaders, program partners organization program leaders and senior managers, partners
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Risk Management in NARS organizations
Risk Analysis during the planning or design phase of the interventions analyse risks separately for each organizational level risk analysis for project and project activity levels may be conducted jointly completed before the implementation of the intervention begins becomes regular recurring activity during implementation risk matrix is the tool used
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Risk Matrix Risk Matrix Template
Adapted from: Tasmanian Government (2005) - Tasmanian Government Project Management Guidelines Version March 2005; Section 6: Risk Management (incl. Project Risk Register – Template and Guide Version1.3, April 2008); Inter Agency Policy and Projects Unit, Government Information and Services Division, Department of Premier and Cabinet, Tasmania
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Risk Matrix Risk Evaluation Table – a key to risk ratings and risk grade Table 1: Rating for Likelihood and Level of Consequences for each risk L Rated as Low E Rated as Extreme (used for Level of Consequences only) M Rated as Medium NA H Rated as High Table 2: Risk Evaluation Table – combined effect of Likelihood and Level of Consequences to determine the Risk Grade Level of Consequences Likelihood low medium high EXTREME 1 2 4 3 Adapted from: Tasmanian Government (2005) - Tasmanian Government Project Management Guidelines Version March 2005; Section 6: Risk Management (incl. Project Risk Register – Template and Guide Version1.3, April 2008); Inter Agency Policy and Projects Unit, Government Information and Services Division, Department of Premier and Cabinet, Tasmania
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Risk Matrix – Table 3: Recommended actions for grades of risk
Risk Grade Risk mitigation actions 4 Mitigation actions, to reduce the likelihood and level of consequences, to be identified and implemented as soon as the project commences as a priority. 3 Mitigation actions, to reduce the likelihood and level of consequences, to be identified and appropriate actions implemented during project execution. 2 Mitigation actions, to reduce the likelihood and level of consequences, to be identified and costed for possible action if funds permit. 1 To be noted - no action is needed unless grading increases over time. Table 4: Change to Grade since Last Assessment NEW New risk < Grading decreased – No change to Grade > Grading increased Adapted from: Tasmanian Government (2005) - Tasmanian Government Project Management Guidelines Version March 2005; Section 6: Risk Management (incl. Project Risk Register – Template and Guide Version1.3, April 2008); Inter Agency Policy and Projects Unit, Government Information and Services Division, Department of Premier and Cabinet, Tasmania
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Risk Matrix tool for managing and reducing the identified risks
document risks and risk mitigation strategies being pursued documented framework from which risk status can be reported ensure the communication of risk management issues to key stakeholders mechanism for seeking and acting on feedback to encourage the involvement of the key stakeholders identify the mitigation actions and associated costing
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Risk Management in NARS organizations
Risk Analysis results of risk analysis will be included as part of the intervention’s M&E documentation risk matrix should be updated on an annual basis (or more often if required) include risk matrix update in an M&E schedule of events for the intervention
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Risk Management in NARS organizations
Planning risk mitigation actions identify risk mitigation actions for severe or high risks describe responsibilities for mitigation actions establish timelines when mitigation actions will occur record in the risk matrix severe risks may require an adjustment to the planning and design of the intervention
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Risk Management in NARS organizations
Planning risk mitigation actions plan the risk mitigation actions further during implementation of intervention possibly record in a separate document, such as a risk management plan in smaller interventions the risk matrix may suffice managers report on the timeliness and success of the mitigation actions in regular reporting
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Risk Monitoring risks need to be monitored throughout the life of the intervention reviewing risk analysis annually ? is one method to monitor risks for medium to low risks severe and high risks may require the development of risk indicators to measure the threat monitor risk indicators as early warning when a risk may occur and whether a risk becomes inacceptable for the intervention
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