Canadian Evaluation Society Vancouver – June 4, 2003 Using Integrated Risk Management to Improve Strategic Outcomes and Public Transparency Basil Orsini – Director, Corporate Audits & Risks, Gatineau/Ottawa Mardy Duncan – Director, Corporate Services, BC/Yukon Region

2 Presentation Overview  HRDC 101  Evolution of Risk Management  Some HRDC Experiences  Evaluation Can Contribute to Risk Mitigation

Student Loan Repayment Insurance Premium CPP Contribution Workplace Standards Circle of Life - Basic Client Data - Circle of Life - Basic Client Data - Birth School Sickness Disability Maternity/ Paternity Maternity/ Paternity Volunteer Unemployed Homeless Retired Low Income Pensioner Low Income Pensioner Death Work The Circle of Life Events: our Client Focus HRDC helps holistically through life transitions The Circle of Life Events: our Client Focus HRDC helps holistically through life transitions Maternity Benefits SIN Child Tax Credit Student Loan CSLP, CESG CPP +18 children’s benefit Employment Insurance CPP Disability Disability Tax Credit Employment Leave Education Savings Grant Child Tax Credit Grant & Contribution Community Assistance CPP drop out provision Re-training CSLP re-payments suspended Labour Standards Fed Workers' Compensation Occupational Health & Safety CPP Pension OAS Pension OAS - GIS OAS - Allowance CPP Survivor Pension CPP Death Benefit CPP Child Benefit OAS Survivor Allowance

HRDC Operations HRDC INFRASTRUCTURE Processing Centres (122+) MIX: EI (100), IPOC (6), SIN + ROE (1), ISP (11), IT Centres (4). Internet + Kiosks MIX: Internal Kiosk (3,750), External Kiosk (1,070 phasing out), 121 websites Third Parties (2,550) MIX: EI (11), ISP (10), CSLP (4), CESG (1) Service Canada (229) Regional Offices (10) NHQ (15 Branches) HRCCs (320) Call Centres (26) MIX: CPC (156), HRCCs (57), HRDC Partners (7), Heritage (9) MIX: Main (100), Satellites (220) MIX: Policy, Program Delivery, Processing, Corporate Support MIX: Provinces, Municipalities, Aboriginal, NGOs, Financial Institutions, etc.

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Enterprise-wide Risk Management is a natural evolution in the art of risk management Risk Management perspective Value contributed financial operations Risk Management Financial and hazard risk and controls Linkage understated Treasury, insurance and operations management Business Risk Management Business risk Linkage is clearer Business managers accountable (risk-by- risk) strategy Enterprise-wide Risk Management Business risk Linkage is crystalline Align strategy, people, process, technology and knowledge on an enterprise-wide basis

is the overall process * Define Objectives Identify Risk Factors Assess Risks Risk Response Learning Risk Communications * “Federal” approach with flexibility for different business lines! IRM 101

Types of Risk Event driven risk Risk arising from change Harness risk to your advantage and enhance stakeholder value Hazard Uncertainty Opportunity PriceWaterHouseCoopers

Risk Identification Risk - Control Measures = Residual Risk Residual Risk - Mitigating Measures = Un Managed Risk

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12 Initial pilots led by internal audit needed to be connected to the management agenda. The Associate Deputy Minister directed that all branches report on their key risks. Senior executives are now fully engaged in managing their branch risks. IRM capacity is being progressively built. Establishing An IRM Function - How We Evolved

13 Establishing An IRM Function - Planning Process First report on 2002 Corporate Risks was appended to the first Corporate Plan Integrated Risk Management is being embedded into the new integrated planning process Strategic Plan is being built on principles of integrated risk management: – Priorities are key risk areas –Initiatives are mitigating strategies

14 Practicing Integrated Risk Management We have adopted a common core process while encouraging flexibility by business line As a social instrument of the Federal Government, our risks include taking advantage of opportunities for Canadians Risk management reduces the likelihood but does not eliminate problems Risks should be framed for mitigation.

15 BC/Yukon Experiences Value for senior management team Practical, useful business application Regional process Some illustrative outcomes

16 HRDC Framework for IRM comprises … Departmental Objectives Approach to Implementation Process for Risk Management Framework for Prioritizing Developing Mitigation Strategies Implementation Standards Action Plan & Monitoring

17 Corporate Risks, 2002 Public Confidence: Meeting citizen expectations for stewardship and security Knowledge & Policy: Making an impact with comprehensive, timely, and strategic knowledge creation & policy analysis Service Delivery: Meeting Citizen/Client expectations for consistent, efficient and effective service

18 Human Resources: Recruiting and retaining the personnel to effectively deliver citizen- focused service Information Technology: Resourcing /managing technology development and maintenance Integrated Planning/Resourcing: Aligning objectives, resources, and accountabilities … Corporate Risks, 2002

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20 Departmental Risk Profile for 2003 will cover: Policy Program Management Client Services Corporate Service Functions Change Management

21 Areas for Strategic Risk Mitigation Policy & Program: Improvements to the Canadian workforce Investing in People Program Management  Services: Integrated, Cost-effective & Citizen-centred Modernizing Information Technology Privacy  Organizational Effectiveness Organizational Workforce Integrated Management Framework Change Management Communications

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Formative & Summative Evaluations Performance Measurement Results-Based Management Change Initiatives How Does Evaluation most support risk mitigation ?

24 Change Initiatives Results-Based Management Performance Measures Formative & Summative Evaluations STRATEGIC RISK AREA AREA OF FOCUS Program Policy Government-wide Tool for Risk Mitigation Planning

Significant IRM Implementation Issues For Evaluation Are... Key Issues FOSTERING... Key Issues HINDERING...