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Legislative Assembly for the ACT: 2000 Week 8 Hansard (31 August) . . Page.. 2848 ..
3.7.1 Managing Risk
The following flowchart provides a guide to the management of risk in the purchase of goods and services.Establish the Context
Identify the Risks
Monitor
Analyse the Risks and ReviewEvaluate & Prioritise
the Risks
Treat the Risks
Establish the Context
Understand the environment in which the purchase is being made and define the successful outcomes required for the purchase.Identify the Risks
What can happen? How and why does it happen?The objective is to develop a comprehensive, documented list of all potential risks from the viewpoint of all stakeholders.
Analyse the Risks
What is the likelihood of the risks occurring? What are the consequences of the risks occurring? What controls are in place to prevent or detect potential risks?For each identified risk, determine its consequences and probability. Combine these estimates to give you an overall estimated level of risk. Identify any existing controls used to manage this risk and evaluate the risks in the context of these existing controls.
Evaluate and Prioritise the Risks
Arrange the listing of risks in priority order and decide which are acceptable/unacceptable.Focus on managing the higher priority risks, which are probably those of greater significance or material impact. This usually means putting a greater effort into managing the procurement process.
Treat the Risk
Identify the range of options for treating each risk and evaluate those options. Then prepare risk treatment plans for implementation. The documented treatment plan should identify who is accountable for which responsibilities, schedules, expected outcome of treatments, budgets and performance criteria.
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