Monitoring strategy

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Monitoring strategy
Strengthening the Role of Public Internal
Financial Control

• Presentation held by
• Nils Eklund, PhD
• Expert in Performance Management

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Two approaches

• Risk of loss of value, leakage or waste
• Risk of value not earned or added

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At least four decisions

• First the minds - (What to focus)
• Then the methods - (How to watch)
• Then the manuals - (When to look)
• So the machinery - (Where to view)

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The prime risk first

• What is the prime risk
• Where do we find it
• Why is it a risk
• How do You handle it
• When can You handle it
• Who can handle it

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Return to Enterprise Risk Management

• The eight components
• Internal Environment
• Objective Setting
• Event Identification
• Risk Assessment
• Risk Response
• Control Activities
• Information and Communication
• Monitoring

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Component connection
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Monitoring and Internal Environment

• Managements leadership of organisation
• Managements delegation of duties, authority and
  responsibilities
• Managements strategy for managing risk
• Ethical and moral values of organisation
• Competence and development of personnel
• The structure of the organisation
• Human resource entity for recruiting, training
  and evaluating

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Monitoringand Objective Setting

• Strategic setting of goals and objectives for the
  organisations operations
• Popularly called vision mission
• Forms the basis for operations and how these are
  reported, both as financial and non-financial
  information
• Compliance objectives according to laws and
  regulations
• Achievement of objectives

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Monitoring and Event Identification

• Identify events that can affect or obstruct the
  achievement of set goals and objectives
• Positive or negative impact focus tends to be
  on negative impacts (risk identification)
• Events can be incidents or occurrences caused by
  internal or external factors
• Managements ability to identify internal and
  external factors

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Monitoring and Risk Assessment

• The extent to which events have an impact on
  achieving the set objectives of the
  organisations operations
• Assess how the identified events are likely to
  occur and impact on operations, e.g. high, medium
  or low probability/impact
• On-going activities, not an isolated annual
  activity or occurrence
• Time horizon according to set objectives
• Inherent and residual risks

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Monitoring and Risk Response

• Represents the managements strategy for action
  and decisions with regards to identified and
  assessed risks
• What decision management makes as a response to
  the risks
• Avoidance
• Reduction or elimination
• Sharing
• Acceptance

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Monitoring and Control Activities

• Policies, guidelines, directives and procedures
  decided by management
• Control activities carried out by staff at all
  levels of the organisation, by means of e.g.
• Delegation of authority and responsibility
• Segregations of duties and tasks
• Approvals and authorisations
• Inventories and reconciliations of assets
• Verifications of economic transactions (audit
  trail)
• Follow-up and evaluation of operating performance

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Monitoring and Information and Communication

• Relevant information is identified and compiled
  at all levels in the organisation and
  communicated at the right time to the right
  receivers.
• Challenge to make certain that the quality of the
  information is accurate and appropriate.
• Internal communication also includes a clear
  message from management to other staff regarding
  behavioural expectations and responsibilities.
• External communication to stakeholders.

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Monitoring and monitoring

• Ongoing monitoring could shape a tunnel in Your
  reception
• Evaluation could live a life of its on
• Plane an budget for each, maybe a rule that none
  are below 33 .

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• Shape pressure (energy)
• Make the working solution real
• In support, separate strength from weakness
• Monitoring

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Another view

• With Financial Management finances should
  manage be transformed to performance. If they do
  not, why?
• Shape pressure (energy)
• Make the working solution real
• Separate strength from weakness
• Monitoring
• Failure

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A real monitor from my hometown