Version 3.

0 NOV 2008

ERMF and FCCF

Introduction and Background

Introduction to ERMF and FCCF

BRMF- Where are we today?
The existing Business Risk Management
Framework reports on financial,
operational and strategic risks

BRMF

Financial and operational risks are

reported on a monthly basis

Strategic risks are reported on a quarterly

basis

BRMF meetings are held at country/

Financial &
Operational
Risks

Strategic
Risks

(Monthly)

(Quarterly)

regional level by the 15th of the month

Reports are sent to Financial Control by

the 27 of the month
th

Current Process

Introduction to ERMF and FCCF

Case for Change - Why a new framework?
Triggered by a review of the current
process

Executive Boards approval as risk

owners

Aim to manage financial risks more

effectively and in a simpler way

Help the organisation make correct

and effective use of financial
resources

Visibility on control gaps against

standards and the related
remediation effort

More effective
management
of financial
risk and
compliance

Introduction to ERMF and FCCF

Case for Change - Why a new framework?
Insufficient attention given to nonfinancial risk in current process

Poor quality of many BRMF reports,

with emphasis on form-filling rather
than managing risk

Absence of strategic risk

management process to
complement reporting of risk at
operational level

Need for governance structure to

ensure risks reviewed and
escalated to Executive Board as
necessary

More effective
management
of all types of
risk

Introduction to ERMF and FCCF

The New Frameworks - The Way Forward
The existing BRMF is being split into

BRMF
BRMF

two components

One of these will be a Financial Control

Compliance Framework (FCCF), and
will be a monthly self assertion by
management that financial controls are
operating effectively in their area

The other component is the Enterprise

Risk Management Framework. The
ERMF will operate as a quarterly self
assessment process to report on all
types of risk exposures

ERMF
Quarterly
Strategic and
operational
risks

FCCF
Monthly
Financial risks
Compliance
against
minimum
standards

Introduction to ERMF and FCCF

ERMF

ERMF - Overview
Integrates risk management at

STRATEGIC OBJECTIVES

all levels

Enables active management of

ASSESSMENT

TOP DOWN

across the Council

STRATEGY

Provides full visibility of risks

IDENTIFICATION OF RISKS
TO ACHIEVEMENT

RISK

risk

TOLERANCE
RESPONSE &
MONITORING

REPORTING

IDENTIFICATION OF RISKS
TO PERFORMANCE

OPERATIONAL OBJECTIVES

BOTTOM-UP

OPERATIONS

ASSESSMENT

Introduction to ERMF and FCCF

ERMF - Reporting Overview

ERMF

Quarterly, all countries and HQ departments are required to report their

business risks using the standard risk reporting template.

Regions and HQ directorates review country/departmental risk returns

before completing a quarterly regional/directorate level return

Annually, countries and HQ departments hold a risk workshop to review

existing risks and identify new risks.

Risk is reported to the Risk Board on a quarterly and annual basis, and
critical matters are escalated from the Risk Board to the Executive Board.

The Executive Board submits a report to the Trustees on the approach

taken to risk management during the year, and bi-annually Head, ERM
reports to the Audit Committee on significant changes in the risk profile,
with an assessment of the adequacy of managements responses.

Introduction to ERMF and FCCF

ERMF

ERMF - Reporting Cycle

Final report presented

to the Executive

EXECUTIVE
BOARD

Board

Reports submitted to
Risk Board after
review by Head of
ERM & the risk
functions

RISK BOARD

TOP
REVIEW
LEVEL

ERM Support
compiles all reports

(eg Dir.
Ops)

and feedback into one

integrated report

Executive Board
Meeting

Risk Board Review

Meeting

Report reviewed by
Top Review Level
with feedback
submitted to ERM
support

ERM
SUPPORT
REVIEW
LEVEL ( eg
Region)

Quarterly ERM Report

produced & submitted
to Review Level

Review Level
Quarterly Risk
Review Meeting

Meeting

REPORTING
LEVEL (eg
Country)

Business units
Quarterly ERM
Meeting

Task

Q1 Month 1

Q1 Month 2

Q1 Month 3

Introduction to ERMF and FCCF

FCCF - Overview
Focused on assessing and
monitoring two key aspects:

1. Control Effectiveness (countries/UK

departments) - based on validated
self-certification against minimum
performance standards for the
financial controls.
2. Financial Risk Management
(regions/UK directorates) - focused
on the identification, assessment,
mitigation, and monitoring/reporting
of financially related risk

FCCF

Hold a monthly meeting to review

compliance with key financial controls
Clear set of minimum standards with
Sign off at the Country and Regional
level
Certification worksheet to be sent to
Financial Control by the 10th working day
from the region
This means reduction in time and effort
each month.

Introduction to ERMF and FCCF

FCCF - Reporting Cycle
Audit Committee
Presentation

Audit Committee
Meeting

Presentation to the
Audit Committee

4th Thu

LEVEL 4

Executive Board
Reporting

LEVEL 3

3rd Fri

Financial Control
Reporting &
Consolidation

Monthly FCCF
consolidated
report

QUARTERLY

FCCF

Monthly
Executive
Board
report

Meet with the FD &

FC to discuss and
escalated risks and
finalise return

Exec Board Meeting

to review final report

12th
Monthly FCCF Regional
Certification
Worksheet

MONTHLY

Compile risk report

and submit to FD

LEVEL 2

Regional
Reporting &
Consolidation

LEVEL 1

10th

Country, UK
Department, and
GSS Hub
Reporting

Monthly FCCF
Certification
Worksheet

Country Director/ 7th

Heads of UK
department/ UK
Directors to chairs
Monthly FCCF
meeting

Regional Director/
UK Director to send
summary
exceptional risk for
HQ review

Working Day of the Month

Key Task for Reporting

Introduction to ERMF and FCCF

FCCF

FCCF - Top Down Feedback

Financial
Control

Executive
Board

Finance
Director

Region
Feedback on control failures and concerns escalated
+ Approval of remediation plan

Country/
UK dept

FEEDBACK

REPORTING

Feedback on control failures and risks escalated

+ Approval of remediation plan

Compliance
Dashboard

Key Dates
What happens now?

First
ERMF
First ERMF regional/
country/ directorat
department e report
al report

Decembe
r

January

February

March

08-09

ERMF/
FCCF
Pilots

ERMF/FCCF
review &
feedback
revisions to
the
frameworks

ERMF/FCCF
Training &
Communicatio
n

END OF FINANCIAL YEAR

BRMF PROCESS

April

Risk Board

May

June
09-10

Final
BRMF
Repor
t

First
FCCF
Repor
t

Exec
Board
FCCF
Repor
t

Ongoin
g
Suppor
t