Page 37 - FCW, July30, 2016

DrillDown
The push for enterprise
risk management
Savvy agency leaders are already integrating holistic ERM into decision-making processes as they wait for new guidance from OMB
BY LAURA JACKSON AND JOHN DUNCAN
Executive branch agencies are await- ing new guidance on enterprise risk management from the Office of Man- agement and Budget in the form of an update to Circular A-123. The circular will contain deadlines to motivate gov- ernment leaders to develop their risk management programs within a short period of time.
The updated circular had been expected in the fall of 2015, but despite the delay, OMB is sticking to the dead- line of requiring that the new adminis- tration receive agencies’ ERM plans on its first day in office in January 2017.
In conjunction with the plan, agen- cies are preparing to communicate their appetite for risk and provide a list of the strategic risks they have already identified. Savvy leaders are integrating holistic ERM into their decision-making process now as they determine actions to strengthen their agencies against risks.
The circular’s origins
An impetus behind the new ERM requirements was a string of high- profile failures of major government programs. In 2015, the updated OMB Circular A-11 included the statement that “agencies are encouraged to leverage any existing enterprise risk
management efforts when conducting strategic reviews.”
The move forward from that point was rapid, thanks to strong leader- ship from OMB officials and the sup- port of a collection of federal agencies and industry leaders that stressed the need for enhanced risk communication in the government.
Mark Reger, deputy controller at OMB, has been a driving force behind the increasing momentum to release the updated Circular A-123 and com- panion guide this year. At a recent meeting of the Association for Fed- eral Enterprise Risk Management, he encouraged agencies to take action immediately to move ERM forward,
without waiting for the release of the A-123 guidelines.
The ultimate goal of the circular update is for agencies to proactively identify risks and establish lines of communication to enhance timely risk- informed decision-making and mitiga- tion strategies. The new requirements are expected to help agencies manage risks effectively while achieving their strategic objectives.
Reger has emphasized the need for agencies to use the OMB requirement for ERM to support a shift in culture that identifies risks and swiftly com- municates them.
Many agencies — including the Smithsonian, U.S. Patent and Trade-
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