Alex Hire, Senior Manager, RSM
How do you know your risks are being managed?
Here are some key questions for trusts to think about:
- As an Executive Team or Committee/Board member, how do you receive assurance that systems are effective and compliant with the Academy Trust Handbook and your own policies and procedures?
- How comfortable are you that risks are being managed and where does your assurance come from?
How the Academy Trust Handbook addresses gaining assurance
The Academy Trust Handbook outlines that Trusts are required to have internal scrutiny, with areas for coverage identified ‘on a risk-basis’ (with reference to its risk register)’. The Handbook further confirms that ‘the term internal scrutiny should be viewed in the same way as internal audit’.
Accordingly, all Trusts must have a programme of internal scrutiny to provide the Board with independent assurance on the effectiveness of not only financial controls but also non-financial controls. Equally, Boards must be assured that risk management is operating effectively across the Trust with the risk register being subject to regular review. Assurance remainsa key factor in the management of risk, especially given that the majority of realised risk is a result of failure in the control environment.
What do we mean by ‘assurance’?
To understand what assurances are required, it is important for any Trust to identify their risks (which prevent them from achieving their goals and objectives) and what could cause those risks to materialise. The identification of controls to mitigate these risks is an important element of the risk management framework. To understand whether your control environment is operating effectively and mitigating your risks, assurance is key to evaluating the robustness of the control framework.
Assurance is the level of confidence that can be obtained in connection with the ongoing effectiveness of the key control environment. Internal scrutiny on a risk-based approach is one form of assurance.
An assurance mapping exercise will enable management to support the Board in determining where there may be assurance gaps, or the current assurance provision may need strengthening.
RSM supporting Trusts in risk management
Risk Register analysis
RSM supports many Trusts, and the sector, in identifying their risks, implementing risk management and gaining assurance that risks are mitigated, including through the risk management masterclasses run with Stone King and CST.
To assist in risk identification, RSM recently undertook an analysis of risk registers for Academy Trusts and the wider education sector identifying the highest risks in terms of frequency and severity of reporting and the direction of travel of risk. This can be used by Trusts as a comparator tool for their own risk register.
To read our recent publication, please use the link below:
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