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HOUSINGASSOCIATION

RISKMANAGEMENTPLAN (template)

VERSION: 5

DATE: DECEMBER2008.

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INTRODUCTIONTOTHERISKMANAGEMENTTEMPLATE

This template is designed to be a practical resource for community housing providersdeveloping their risk management plans. It provides a series of tools that organisations canfollow to assist them to identify, analyse and treat their risks. Used together they form a

framework for managing risks.

However, the process of risk management is as important as the documentation. Athorough, organisation wide risk consultation means that all the key stakeholders can assistin identifying risks. This leads to a more rigorous risk management plan. It also begins theprocess of embedding risk management by introducing an element of ownership of the planat all levels of the organisation.

The template draws on good practice from a number of sources including:

Australian Institute of ompany !irectors

umberland Housing o"op #td., $apphire oast Tenancy $cheme

!epartment of ommunity $ervices

Housing orporation, U%

$tandards Australia

Tasmanian &overnment

The template was developed by $heryl de 'ries and Adam (est.

The template is available on a ! so that providers can enter their own data in the relevant

sections of the document.

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Table of Contents

e!s"on Cont!ol

DOCUMENT STATUS............................................................................................................................................................8

DRAFT RMP............................................................................................................................................................................8

DATE.........................................................................................................................................................................................8

AUTHOR..................................................................................................................................................................................8

JOHN LENNON.......................................................................................................................................................................8

01/06/07......................................................................................................................................................................................8

DELEGATED RESPONSIBILITY TO ENDORSE / ENDORSEMENT DATE..............................................................8

TREASURER ENDORSED....................................................................................................................................................8

01/07/07......................................................................................................................................................................................8

FULL BOARD APPROVAL...................................................................................................................................................8

BOARD APPROVES RMP ....................................................................................................................................................8

01/08/07......................................................................................................................................................................................8

USER.........................................................................................................................................................................................8

ALL STAFF..............................................................................................................................................................................8

CIRCULATED TO .................................................................................................................................................................8

INTERNAL -ALL DIRECTORS, STAFF, ...........................................................................................................................8

ETERNAL ! PMRU/OCH...................................................................................................................................................8

01/0"/08......................................................................................................................................................................................8

CURRENT AS AT ..................................................................................................................................................................8

01/0#/0$......................................................................................................................................................................................8

ANNUAL REVIE% DATE ....................................................................................................................................................8

JOHN LENNON.......................................................................................................................................................................8

01/06/08......................................................................................................................................................................................8

1. INTRODUCTION................................................................................................................................................................#

1.1 PURPOSEOFTHERISKMANAGEMENTPLAN....................................................................................................................9

1.2 EMBEDDINGTHERISKMANAGEMENTPLAN.....................................................................................................................9

1.3 AUDIENCE.........................................................................................................................................................................9

1.4 WHOWASINVOLVED?......................................................................................................................................................9

1.5 ACRONYMS.......................................................................................................................................................................9

&. ORGANISATIONAL CONTET .....................................................................................................................................#

". RIS' STRATEGY.............................................................................................................................................................10

$. RIS' DIAGRAM...............................................................................................................................................................11

ESTABLISH THE CONTET.............................................................................................................................................11

IDENTIFY THE RIS'S...................................................................................................................................................... ..11

ANALYSE THE RIS'S........................................................................................................................................................11

EVALUATE THE RIS'S.....................................................................................................................................................11

TREAT THE RIS'S..............................................................................................................................................................11

(. IDENTIFY THE RIS'S................................................................................................................................................. ..1&

6. ANALYSE THE RIS'S....................................................................................................................................................1$

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HA PRIORITY.......................................................................................................................................................................1(

)ENTER YOUR DATA ON THE *RIS' REGISTER* SPREADSHEET ON THE CD. REFER TO RIS'

REGISTER INSTRUCTION SHEET ON CD FOR FURTHER GUIDANCE+..............................................................1(

7. RIS' MANAGEMENT REGISTER EAMPLE........................................................................................................16

ALTERNATIVE PRESENTATION TOOL - RIS' MATRI.........................................................................................18

REF NUMBER.......................................................................................................................................................................1#

DESCRIPTION......................................................................................................................................................................1#

TYPE OF RIS'......................................................................................................................................................................1#

LI'ELI....................................................................................................................................................................................1#

HOOD......................................................................................................................................................................................1#

IMPACT..................................................................................................................................................................................1#

SCORE....................................................................................................................................................................................1#

06/01.........................................................................................................................................................................................1#

CASH FLO% / LIUIDITY DIFFICULTIES...................................................................................................................1#

FINANCIAL MANAGEMENT............................................................................................................................................1#

&................................................................................................................................................................................................1#

(................................................................................................................................................................................................1#

10..............................................................................................................................................................................................1#

06/0&.........................................................................................................................................................................................1#

RENT ARREARS BLO% OUT...........................................................................................................................................1#


"................................................................................................................................................................................................1#

$................................................................................................................................................................................................1#

1&..............................................................................................................................................................................................1#

06/0".........................................................................................................................................................................................1#

STOC' TRANSFER PROPERTIES HARD TO LET LEADING TO LO% RENTAL INCOME AND HIGH

VANDALISM.........................................................................................................................................................................1#


$................................................................................................................................................................................................1#

$................................................................................................................................................................................................1#

16..............................................................................................................................................................................................1#

06/11.........................................................................................................................................................................................1#

PROPERTIES DISCOVERED TO BE IN VERY POOR CONDITION AFTER HANDOVER..................................1#

PROPERTY MANAGEMENT.............................................................................................................................................1#

"................................................................................................................................................................................................1#

$................................................................................................................................................................................................1#

1&..............................................................................................................................................................................................1#

06/"$.........................................................................................................................................................................................1#

LOSSES MADE ON LEASEHOLD PROPERTIES BECAUSE OF CHLP FUNDING FORMULA AFFECTING

LONG TERM FINANCIAL VIABILITY.......................................................................................................................... .1#

ETERNAL - FUNDING......................................................................................................................................................1#

$................................................................................................................................................................................................1#



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(................................................................................................................................................................................................1#

&0..............................................................................................................................................................................................1#

8. EVALUATE THE RIS'S...................................................................................................................................... ......... .&0

PRIORITY RIS'S.................................................................................................................................................................&0

PRIORITY RIS' TABLE ....................................................................................................................................................&1

RIS' PRIORITY...................................................................................................................................................................&1

REF .......................................................................................................................................................................................&1

RIS' DESCRIPTION...........................................................................................................................................................&1

1................................................................................................................................................................................................&1

06/"$.........................................................................................................................................................................................&1

FINANCIAL VIABILITY, DUE TO UNDER-OCCUPANCY IN CAPITAL PROPERTIES AND INSUFFICIENT

FINANCIAL RESERVES TO FUND MAINTENANCE LIABILITIES.........................................................................&1

&................................................................................................................................................................................................&1

06/6...........................................................................................................................................................................................&1

ECESSIVE %OR'LOAD AND POOR STAFF MORALE...........................................................................................&1

"................................................................................................................................................................................................&1

06/&(.........................................................................................................................................................................................&1

A LAC' OF FINANCIAL S'ILLS ON THE BOARD ....................................................................................................&1

$................................................................................................................................................................................................&1

(................................................................................................................................................................................................&1

6................................................................................................................................................................................................&1

7................................................................................................................................................................................................&1

8................................................................................................................................................................................................&1

#................................................................................................................................................................................................&1

10..............................................................................................................................................................................................&1

11..............................................................................................................................................................................................&1

1&..............................................................................................................................................................................................&1

1"..............................................................................................................................................................................................&1

1$..............................................................................................................................................................................................&1

1(..............................................................................................................................................................................................&1

16..............................................................................................................................................................................................&1

17..............................................................................................................................................................................................&1

18..............................................................................................................................................................................................&1

1#..............................................................................................................................................................................................&1

&0..............................................................................................................................................................................................&1

#. TREAT THE RIS'S..........................................................................................................................................................&&

THE RIS' TREATMENT PLAN IS ESSENTIAL FOR SUCCESSFUL RIS' MANAGEMENT. IT IS THE PART

OF THE RIS' MANAGEMENT PLAN THAT ALLO%S AN ORGANISATION TO SAY %HAT APPROACH

%ILL BE ADOPTED FOR EACH OF ITS 'EY RIS'S. ................................................................................... .......... .&&

RIS' TREATMENT PLAN EAMPLE..........................................................................................................................&"

Compiled by: Date..............................................................................................................23

APPENDI A - INTERVIE%S.......................................................................................................................................... ..&(



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APPENDI B - ACRONYMS...............................................................................................................................................&(

APPENDI C ! USEFUL LIN'S AND RESOURCES.....................................................................................................&(

Housing Association )isk *anagement +lan template


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ERSIONCONTROLANDAPPROAL

PROIDERSNEEDTOHAEAPROCESS#ORREGULAR$OARDANDSENIORMANAGEMENTREIE%ANDAPPROALO#THERISKMANAGEMENTPLAN& TA$LESSUCHASTHET%O$ELO%COULD$EATTACHEDTOTHEPLANTOENSURETHATCHANGESARETRACKEDE##ECTIEL'ANDTHAT

AMENDMENTSARESIGNEDO##$'THEAPPROPRIATE$OARDORSTA##MEM$ERS&

Doment App!o*al

The original of this )isk *anagement +lan has been endorsed and approved by the oard of !irectorsat the oard meeting held on:

---------------------

$igned ---------------------

ame ---------------------

+osition ---------------------

Doment Info!mat"on

This document is stored in a hard copy in the following location:

---------------------

And electronically in the following location:

---------------------

Doment C+an,es an- !e*"e.s

The author should be advised of any errors, omissions, ambiguities, and re/uests for change orsuggestions for improvement

hanges will need to be approved by the officer with delegated authority for endorsing riskmanagement plans in the document approval section, prior to being incorporated into the ne0t versionof this document.

T23 1

e!s"on At+o! Date Des!"pt"on

Housing Association )isk *anagement +lan template !


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Doment p-ate/ !e*"e. an- -"st!"bt"on l"st

T23 &

Doment stats D!aft RMP Date

At+o! 0o+n Lennon 12314315

Dele,ate-!espons"b"l"t6 toen-o!se 3en-o!sement -ate

T!eas!e! en-o!se- 12315315

#ll $oa!- app!o*al $oa!- app!o*es RMP 12317315

Use! All staff

C"!late- to Inte!nal 8All -"!eto!s/ staff/

E9te!nal : PMRU3OCH 1231;317

C!!ent as at 1231


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2& Int!o-t"on

2&2 P!pose of t+e R"s> Mana,ement Plan

The purpose of the risk management plan is to allow a housing association to identifyand record potential risks.

The plan also allows mitigation strategies to be developed and tracked.

The document should be updated 1weekly 2 fortnightly2 monthly2 /uarterly 2 annually 2whenever is necessary, e.g. following an incident of significant impact on theorganisation3s day to day operation.4

2&? Embe--"n, t+e !"s> mana,ement plan

The risks identified are risks that the organisations objectives will not be met.Therefore the risk management plan will refer to, and be reviewed against, theorganisation3s strategic, operational and business plans. 1enter details about how andwhen these documents will be reviewed4

2&; A-"ene

This risk management plan is aimed towards the following groups:

G!op Reason!irectors &overnance responsibility

$taff 5perational responsibility

5H )egulatory and funding body

1enter details ofother relevantparties4

1e.g. private sector partners 6 to fulfil due diligencere/uirements41tenants 6 to ensure a consistent high /uality service4

2&= %+o .as "n*ol*e-@

A list of people involved in the initial development of this plan can be found atAppendi0 A.

2& A!on6ms

A list of acronyms used can be found at Appendi0 .

?& O!,an"sat"onal onte9t

It is not possible to avoid risk entirely. To attempt to do so would mean that theorganisation would effectively be unable to function. It would also not be able to takeadvantage of opportunities as they arise.



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The board should use this heading to describe what their willingness to accept risks is.This should be described in the conte0t of the type of organisation it is. 7or e0ample:

8As a not for profit community housing organisation we have limited financialresources. 5ur primary responsibility is to our tenants. As recipients of government

funding we also have a responsibility to use our resources wisely. These factorsmean that the board3s attitude to risk is generally cautious.8

Alternatively providers may have a more robust approach to risk. 7or e0ample theboard may decide that growth is a key priority and that additional risks may beacceptable to achieve this end.

In either case, stating the organisational conte0t and the board3s appetite for risk setsthe tone for the whole organisation and for the risk management plan in particular.

1A further statement about the circumstances under which the board would considertaking risks and how they would be evaluated should also be included here.4

;& R"s> st!ate,6

This heading allows providers to outline their risk management strategy. 7or e0ample:

9In order to ensure that risks are identified in a consistent manner across theorganisation a )isk Assessment *odel will be applied. This will rank the risks inpriority order and those risks considered important to track will be recorded on the

$ummary of )isks. *itigation strategies will be developed, recorded and monitoredon a weekly2fortnightly2monthly2/uarterlybasis by the pro;ect manager2 chairperson2oard 2 Treasurer of oard. If new ma;or risks are identified these shall be recorded.The $ummary of )isks will be reported to the pro;ect steering committee2 boardon aweekly 2 fortnightly 2monthly2/uarterlybasis.

At appropriate times during the course of the pro;ect, it may be appropriate to re"assess the risks by applying the )isk Assessment *odel. 7or e0ample, it would beappropriate to reassess the risks for a large pro;ect when it moves from are/uirements2evaluation stage into an implementation stage.

The following diagram represents the process to be followed:

1enter a summary of your organisation3s risk strategy, including information on howrisks will be reported to the board4

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=& R"s> -"a,!am

RISK MANAGEMENT PROCESS AS3NBS =;41 ?11=


ESTA$LISH THE CONTET

5

**UIATs

Ho. to omplete t+e table

Hea-e!The plan should be reviewed and updated regularly. The register can either be overwritten or the amended page can be added to thee0isting plan thus showing the changes made over time.

Refe!eneif any?

R"s>rainstorm the possible risks. These could be split into internal and e0ternal risks. 5nce the list has been developed it is suggested that itis reduced to a manageable number 6 no more than @ risks.

R"s> l">el"+oo-!ecide the range of risk. In this case B C lowest probability, D C highest probability

R"s> onseenes!ecide the range. In this case B C lowest risk, D C highest risk

Le*el of !"s>#evel of risk could be an addition or a multiplier. In this case it is a multiplier of risk likelihood t"mesrisk conse/uence. However anythingwith a D on risk conse/uence will be monitored.

Cont!ol a-ea6:The current controls used: OK6 satisfactory, MON6 monitor, some concerns orE Unsatisfactory 6 action needed

R"s> stats:

Is the riskFFFincreasing rapidly,F increasing/ decreasing rapidly, decreasing or8staying the same=

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HA p!"o!"t6

A priority ranking should be given to the key risks. This should take into account all other factors, including the likelihood and impact of therisk, whether the risk is increasing or decreasing and how effective the current controls are. This information should be used to compile alist of principal risks.

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5& R"s> mana,ement !e,"ste! (e9ample)

7unction2activity &l">el"8+oo-

R"s>one8enes

R"s>so!e

Cont!ola-e8a6

R"s>stats

HAP!"o!"t6(!an> 2 :?1)

St!ate,"es Respons"8b"l"t6

Inte!nal

#"nan"almana,ement

2B ash flow 2 li/uidity difficulties ? 21 OK 8 27B. )eview plannedmaintenancetimetable to ensurethat work is spreadevenly throughoutyear@.


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earlier action

2 $tock transfer properties hardto let leading to low rentalincome and high vandalism

= = 24 J 4B. Analyse e0istingwaiting list andtransfer lists@. )e negotiatecapital contribution. )eview allocationspolicy for thesepropertiesJ. onduct detailedrisk assessment on

whether to acceptfuture stock transfers

B. $eniorhousingmanager@.


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Alte!nat"*e p!esentat"on tool 8 !"s> mat!"9

A risk matri0 is often used as a tool to display different risks once they have been analysed.It allows an organisation to mark a threshold above which risks will not be tolerated or willreceive additional treatment from the board or delegated staff. In the e0ample below the

threshold is set at risks scored at BD or above.


L"

>el"+oo

-

Almoste!ta"n

=L">el6

1431; 143;=

;Mo-e!ate

1431?14322

?Unl">el6

14312

2Ra!e

2Ins",n"f"ant

?M"no!

;Mo-e!ate

=Mao!

Catast!op+"

Impat

1"


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R"s> mat!"9 >e6

The table below should be used with the risk matri0 above. It simply provides a description ofthe risk items that are displayed in the matri0, with a summary of how they have beenanalysed.

1el"

+oo-

Impat So!e

14312 Cas+ flo. 3 l""-"t6

-"ff"lt"es

#"nan"al

mana,ement

? 21

1431? Rent a!!ea!s blo. ot #"nan"almana,ement

; = 2?

1431; Sto> t!ansfe! p!ope!t"es+a!- to let lea-"n, to lo.!ental "nome an- +",+*an-al"sm

#"nan"almana,ement

= = 24

14322 P!ope!t"es -"so*e!e- to be"n *e!6 poo! on-"t"onafte! +an-o*e!

P!ope!t6mana,ement ; = 2?

143;= Losses ma-e on lease+ol-p!ope!t"es bease ofCHLP fn-"n, fo!mlaaffet"n, lon, te!mf"nan"al *"ab"l"t6

E9te!nal 8fn-"n,

= ?1

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7& E*alate t+e !"s>s

P!"o!"t6 !"s>s

The risk identification process can produce a long, unstructured list of risks. These should begrouped into related risks and given a risk score, by using a risk management register suchas the one in section seven above. However, even with careful processing, the risk registeris still likely to contain more items than a board can give proper attention to. The aim shouldinstead be to identify and prioritise the key risks that are going to be closely monitored by theboard. These are the most significant risks that could prevent key organisational ob;ectivesfrom being achieved. The e0act number of risks will vary from year to year and organisationto organisation, it is unlikely that a board would be able to provide detailed oversight of morethan @ risks at a corporate level. The management of lower priority risks should bedelegated to staff and only reported to the board if their status changes.

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P!"o!"t6 !"s> table


R"s>P!"o!"t6

Ref R"s> -es!"pt"on

2 143;= #"nan"al *"ab"l"t6/ -e to n-e!8opan6 "n ap"tal p!ope!t"es an-"nsff""ent f"nan"al !ese!*es to fn- ma"ntenane l"ab"l"t"es

? 1434 E9ess"*e .o!>loa- an- poo! staff mo!ale

; 143? A la> of f"nan"al s>"lls on t+e boa!-

=

4

5

7

s&

In e0ample risk treatment plan provided below, organisations are encouraged to provide thefollowing information for each of the priority risks they have identified.

Refe!eneThis is a reference code which helps identify a specific risk from the risk register and thepriority risk table >see sections seven and eight above?

R"s> "-ent"f"e- an- l">el6 "mpat+rovide a brief summary of the risk that you have identified in this section and the likelyimpact on the organisation3s ob;ectives if the risk occurs

Smma!6 of !eommen-e- !esponse$ummarise the organisation3s approach to managing the risk. 7or e0ample, are you likely toput additional management controls in place to minimise the likelihood that the risk willoccur= (ould you transfer the risk by going into partnership or by taking out additionalinsurance >where appropriate?

At"on plan 8 p!opose- at"ons!escribe the specific actions that will be taken to manage the risk

Reso!e !e"!ement

!escribe the resources needed to succeed in the action plan. )esources may include stafftime as well as financial input

Respons"b"l"t6$ay who has been delegated responsibility to manage this risk

T"m"n,$ay and how often this risk will be treated

Repo!t"n, an- mon"to!"n, !e"!e-How often will the treatment plan be monitored and who by= (hen will progress on

managing this risk be reported to the board or risk committee=

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R"s> t!eatment plan (e9ample)

Refe!ene

R"s> "-ent"f"e- an- l">el6 "mpat

Smma!6 of !eommen-e- !esponse

At"on plan+roposed actions

Reso!e !e"!ement

Respons"b"l"t6

T"m"n,

Repo!t"n, an- mon"to!"n, !e"!e-

ompiled by: !ate

)eviewed by: !ate



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21& Re*"e. t+e !"s> mana,ement plan

Use this space to give details of how the risk management plan as a whole is going to bereviewed. This should include information on:

How often risks will be reported to the board 6 monthly, /uarterly etc.

(hich risks will be reported on 6 i.e. ;ust the top B or @ or all identified risks=

(ho is responsible for reviewing risks= 6 i.e. what level of authority for risk management

and review has the board delegated to staff= Lou may wish to treat different categories ofrisk in different ways 6 so that the most important @ risks and any risks you have given a9D3 for 9conse/uence3 are always scrutinised by the board. 5ther risks could be reviewedthrough e0ceptions reporting 6 where staff will manage lower risks unless their statusincreases above a threshold set down by the board.

How will risk management be embedded into the organisation3s processes= I.e. whichother organisational plans and strategies will the risk management plan be reviewedagainst= 7or e0ample 6 the strategic plan, operational plan, and business plan.

How will the risk management plan meet the re/uirements of the +erformance ased

)egistration system= I.e. review your plan against the %ey +erformance Indicators on riskmanagement. (ill your risk management plan ensure that other key risks identified forregistration also be managed effectively= 7or e0ample, does your risk management planaddress key issues of service delivery, corporate governance and financial viability=

(hat is your annual cycle for risk management= Appro0imately when in the year will

the processes of risk identification, assessment, evaluation and control take place=How will this fit in with other processes like strategic and business planning etc. !oyou have an annual board agenda that addresses when the board will consider keyissues=

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Appen-"9 A 8 Inte!*"e.s

The following people were interviewed during the course of developing this riskmanagement plan:

ame )ole 5rganisation2!epartment

*ary heung Treasurer Housing Association

#isa rown !irector Housing Association

*ike %elly Auditor %elly and +artners

#inda 53rian Housing (orker Housing Association

+atrick !onaldson )eceptionist Housing Association

Appen-"9 $ 8 A!on6ms

5H The 5ffice of ommunity Housing!5H $( !epartment of Housing

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