Expanding the 'Enterprise' in Enterprise Risk Management

By Wallig, Greg | The Journal of Government Financial Management, Spring 2012 | Go to article overview

Expanding the 'Enterprise' in Enterprise Risk Management


Wallig, Greg, The Journal of Government Financial Management


Whether a government agency pays benefits, issues bonds, oversees reserves or fights wars, it faces and must manage significant risk. Today's budget cuts are forcing state and federal agencies to rethink systems and methods for assessing risk events that threaten mission execution. Enterprise risk management (ERM) is the leading approach to risk assessment and a powerful tool for engaging strategic risk analysis agency-wide. At Grant Thornton LLP, we can help agencies expand the 'enterprise' in enterprise risk management by leveraging financial management expertise to address broader operational and mission concerns.

Financial managers can provide valuable perspective on both financial and non-financial risk assessment and strategy.

A high-wire activity

Risk management is the practice of identifying risks within an organization, analyzing the probability of occurrence, assessing impact on operational goals, and establishing an overall process to manage and control specific risks. There are known risks and unknown risks, and balancing the two can be a high-wire activity. Traditionally, risk management has been conducted separately at the management level, with parallel, but separate, exercises focused on the operational and the financial aspects of an activity. Tradition, however, collides with reality in today's over-stretched, understaffed public agencies. Many federal agency budgets have been hard hit; state and local budgets even more so, with no let-up seen anytime soon. In fact, having fewer resources to achieve agency mission is arguably one of the biggest risks public agencies face today, an issue that must be addressed now in every program discussion.

If agency missions are jeopardized, then all hands must be on deck. This is where ERM can be most effective since its processes by definition gather and analyze input across business units and programs. In fact, the impact of ERM analysis can be heightened by strengthening the role of financial leaders in top-level mission discussions. This makes sense because financial managers have constant access to the financiáis of dayto-day operations and long-term expertise with internal control and IT management. With this insight, they can provide valuable perspective on both financial and non-financial risk assessment and strategy, such as finding new ways to encourage business innovation and improvement even in times of massive budget shortfalls.

Pulling the plug on IT upgrades

At the top of the list of high-risk business decisions is how far to go with information technology upgrades. After years of struggling to stay current with technology, managers now face reduced funding for upgrades, creating risks for maintaining information out-put. Nobody understands better than financial managers what will happen if the plug is pulled for IT processes, which are critical for reporting and analysis and strategic decisions down the line. Reduced staffing compounds the problem, potentially leading to information slow-downs, uninformed decision-making and business paralysis. How to manage these risks? Best practices include going back to basics to assess current and future reporting needs even before strategic risk discussions take place. The value of financial reports rests in how this information is used to inform business decisions at all levels. Determine which reports matter most by:

1. Identifying financial information stakeholders and beneficiaries throughout the enterprise

2. Conducting informational reviews of current financial reporting practices agency-wide

3. Evaluating required resources and impact of recommended reporting practices

4. Streamlining reporting to match critical information needs with available funds

It serves financial managers well to take the lead in this activity. As information producers, they need to know what their audience needs. As information analysts, they need access to top data. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Expanding the 'Enterprise' in Enterprise Risk Management
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.