1. Risk parameters (consequence)
Corruption Risk Management
Factor
Consequences
Insignificant
Minor
Moderate
Major
Catastrophic
Example Risk Appetite
Image/ reputation
Not substantiated, low impact, no news item
Substantiated, low impact, low news profile
Substantiated, public embarrassment, moderate news profile
Substantiated, public embarrassment, high news profile, third party action
Substantiated, public embarrassment, highly widespread news profile, third party action
Financial loss
Additional costs/ funding/ wastages/ revenue
< 5% of initial funds
Between 6 to 15%
Between 16 to 25%
Between 25 to 40%
Above > 41%
Legal/ compliance
Minimal penalties
Moderate fines
Substantial penalties
Substantial, may include criminal charges
Major scrutiny and investigation
Stakeholder - customers
Minimal customer Complaints and recovery costs.
Minimal decline in customer relationships and some recovery costs.
Loss or decline of customer relationships and moderate recovery costs
Strained key customer relationships and significant recovery costs and threat to future growth.
Loss of major customer relationships and serious threat to future growth.
Risk consequences/ management effort
Negligible effects
Impact can be readily absorbed through normal activity
STRATEGIC VIEW:
NORMAL IMPACT ASSOCIATED WITH PROGRAM PLANNING & OPERATIONS
Normal administrative difficulty.
An adverse event which can be absorbed with some management effort
DELAY IN FULFILLING THE MANDATE OF THE INSTITUTION
A serious event which requires additional management effort
DELAY IN ACCOMPLISHING PROGRAM OR PROJECT OBJECTIVES
Project re-design, re-approval and re-do required. Fundamental rework before objective can be met.
A critical event which requires extraordinary management effort.
STRATEGIC PLAN REQUIRES MAJOR REVAMP, APPROVAL, PROGRAM RE-WORK
Project or program irrevocably finished, objective will not be met.
Disaster with potential to lead to “collapse “
STRATEGIC VIEW: MANDATE OF THE ORGANISATION OR ORGANISATION ITSELF, IS FINISHED
Risk Assessment Process
Likelihood
Almost certain
The event is expected to occur in most circumstances, e.g. approximately 95% chance of occurring in the next 12 months
Likely
The event will probably occur in most circumstances, e.g. approximately below 95% but above 50% chance of occurring in the next 12 months
Moderate
The event might occur at some time, e.g. approximately below 50% but above 25% chance of occurring in the next 12 months
Unlikely
The event could occur at some time, e.g. approximately below 25% but above 5% chance of occurring in the next 12 months
Rare
Event may occur only in exceptional circumstances, e.g. approximately below 5% chance of occurring in the next 12 months
Risk rating
Control effectiveness
Satisfactory
Controls are strong and operating properly providing a reasonable level of assurance that objectives are being achieved.
Some weaknesses
Some control weakness/inefficiencies have been identified. Although these are not considered to present a serious risk exposure, improvements are required to provide reasonable assurance that objectives will be achieved.
Weak
Controls do not meet an acceptable standard, as many weaknesses/inefficiencies exist. Controls do not provide reasonable assurance that objectives will be achieved.