What's Really at Risk?

The Government Accountability Office (GAO) publishes Standards for Internal Control in the Federal Government (also known as the Green Book), which defines, among other things, four principles of risk assessment. In short, they are:

  1. Define objectives and risk tolerances
  2. Identify, analyze, and respond to risks
  3. Assess fraud risk
  4. Identify, analyze, and respond to change

It is obvious that these standards apply to large-scale risks like cyberattacks, fraud, and misappropriation, but what about everyday risks like equipment failure and human error? Do those things count as risks too? Let’s take a look at some of seemingly lessor risks and the consequences that leaving them unchecked may bring:

Risk – Failure to apply or not maintain currency of knowledge on changes in appropriation rules and regulations
Possible consequences – Delayed or denied requests, administrative reprimands, legal repercussions

Risk – Delivering poor customer service
Possible consequences – Negative public perception of government in general or your specific agency in particular, decrease in funding, failure to accomplish your agency’s mission

Risk – Failure to use technology
Possible consequences – Widespread delays, difficulty sharing and analyzing data, decreased or lack of funding for future initiatives

Risk – Insufficient training for emerging requirements
Possible consequences – Inability to meet requirements, work disruption, delays, failure to meet expectations, mission failure

As you can see, the risks that some may consider insignificant can result in long-term consequences. To avoid finding your organization in these situations, be sure that every person who contributes to your agency’s mission understands how their commitment to quality and the mission can and will make a difference in their personal outcomes, the results produced by the team, the agency, and the government as a whole.

Within and beyond Federal financial management, it is important to understand your organization’s risk appetite and posture and how to address risks that are revealed. Management Concepts offers a wide array of Federal Financial Management courses that cover internal controls and many other areas of training and consulting.

The efforts of Federal employees are very important to the future of our nation. Stand ready to face the challenges ahead by working to support your organization’s risk mitigation strategies, renewing our commitment to our missions, and staying up-to-date with training and certifications.

Written by:
Natalie Komitsky
Financial Management
Media Type:

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