UNCW Institutional Risk Management IRM Overview and Policy Development & Implementation Plan Overview

UNCWInstitutional Risk Management

IRM Overviewand

Policy Development & Implementation Plan Overview

University of North Carolina Wilmington

IRM BOT Audit Committee Background

Institutional Risk Management Presentations to the UNCW Board of Trustees Audit Committee began April 2011 with overview of process and identified risk areas.

Tier 1 Risk Areas with scores (impact, likelihood of occurrence) and heat map presented April 2012.

Interim Report – October 2012

Tier 1 Response Plan – April 2013 – Presented refined risk statements, indicators, mitigations and next steps for Tier 1 Risk Areas with High Rating


IRM Organization

IRM Steering Committee

Provost and Vice Chancellor for Academic Affairs

Vice Chancellor for Business Affairs

General Counsel

Director – Internal Audit

IRM Committee, Chaired by IRM Officer

Academic Affairs (7)

Business Affairs (7)

Student Affairs (2)

Chancellor (2)

University Advancement (1)


IRM ObjectivesThe ultimate goal of Institutional Risk Management (IRM) is to help the organization achieve its objectives by identifying, evaluating, prioritizing and managing institutional risks that might endanger the university’s mission and reputation.

No federal, state or UNC requirement to have a comprehensive, systematic process for risk identification and management currently exists.

The Association of Governing Boards (AGB) of Universities and Colleges conducted a joint survey with United Educators in 2008. Survey findings found that higher education was lagging behind in this important fiduciary responsibility (60 percent said they do not use comprehensive, strategic risk assessment). Action steps were recommended.


IRM Best Practice Action Steps1. Develop a disciplined process to consider risk in strategic discussions.2. Designate an owner of the risk identification process.3. Require all top administrators to prioritize risk.4. Sift through the prioritized risks to decide which ones warrant

attention at the highest level.5. Require annual written reports on each high-priority risk being

monitored.6. Re-assess priority risks at the board level at least once a year.7. Look for blind spots.8. Move risk identification deeper into the institution each year.9. Keep repeating the process.

C 2009 Association of Governing Boards of Universities and Colleges, United Educators

C 2009 Association of Governing Boards of University and Colleges, United Educators


UNCW’s Central Process Tenants

Institutional Risk Management (IRM) processes are holistic, flexible and under continuous refinement.

The six types of risks move beyond the traditional focus on financial risks covered by insurance. Risks are broadly defined to represent any impediment to accomplishing institutional goals.

The Tier I risk areas, though broad, are regularly analyzed to ensure a relevant and sufficiently narrow focus exists for each. The figure below illustrates other important IRM process components.


UNCW Risk Tier Overview

Tier I – Top Tier Risk Areas containing risks with potential to affect the university’s mission, strategies, and goals

Tier II – Shared risks across multiple areas or single area risks with cascading impacts

Tier III - Unit or single area risks which are largely identified and managed at the department level

Tier I

Tier II

Tier III


Tier I Risk Profile

The Tier I Profile is currently comprised of nine risk areas, each possessing a mission critical nature and risks with higher than average potential impacts. For these reasons, their proper management is considered to be of greatest institutional priority. The top five are all rated “High Risk” and fall within the orange area outlined in bold on theRisk Matrix. Repeating the steps of analysis and evaluation for April report.

Catastrophic

Severe 4 & 5

Serious 3 1 & 2

Minor

Insignificant

Rare Unlikely Possible LikelyAlmost Certain

LIKELIHOOD

IMPAC

TTier I High Risk Areas1. Volatile Essential Resources2. Regulatory Intervention3. Human Capital Management4. Campus Health and Safety5. Continuity of Operations

ImpactSeriousSeriousSeriousSevereSevere

LikelihoodAlmost CertainAlmost CertainLikelyPossiblePossible


Selected Tier II Risk Areas

Tier II – Shared risks across multiple areasSingle area risks with cascading impacts-- Often involve continuous monitoring -- In various stages of analysis, evaluation, and treatment

1 Minors on Campus

2 Vehicle Usage

3 Applied Learning

4 Water Safety

5 IT / Data / Cyber Security

6 Athletics Facilities

7 Fire Safety

8 International Travel


Tier III - Unit Risk Assessment

Unit level risk assessments aid in the identification, evaluation and prioritization of risks.

The process also aids in developing front line managers’ risk awareness, risk evaluation, and risk mitigation skills.

60 units have completed a unit risk assessment. Further refinement of unit risk assessments planned for 2013-14.

ProcessMaturation

Policy Development & Implementation Plan



In order to facilitate a more disciplined process and move risk identification deeper into the institution, a risk management policy is needed.

Policy Purpose: Serves as a statement of the overall UNCW risk management goals and focus. It is intended to help ensure a consistent approach throughout the university.

Policy Scope: Managed with procedures and tools consistent with industry best practices, including (but not limited to) the International Organization of Standardization’s ISO 31000: Risk Management Principles and Guidelines, and the Committee of Sponsoring Organizations of The Treadway Commission’s (COSO) Enterprise Risk Management Framework



Research best practices

Present draft policy to IRM Steering Committee and IRM Committee

Create list of constituent groups, ensuring inclusion of Academic Coordinating Council, Faculty Senate, Staff Senate, Student Government, Chancellor committees and selected units

Conduct workshops to introduce policy and seek feedback

Submit proposed edits to IRM Steering Committee

Submit policy for legal sufficiency review

Propose final policy to Cabinet, followed by the Chancellor for approval with Chancellor Authority

Present to April 2014 meeting of the Audit Committee of Board of Trustees



Communication Campaign to parallel training and support. Communication campaign to cover unit risks assessments, as well as education and outreach on topics of compliance, continuity of operations, fraud and corruption, insurance, and memorandums of agreement.

Policy Development and Implementation Plan is congruent with best practice research and AGB Recommended Action Steps:

Develop a disciplined process.Move risk identification deeper into the institution each year.Keep repeating the process.

Documents

UNCW Institutional Risk Management IRM Overview and Policy Development & Implementation Plan Overview