• Thu. May 23rd, 2024

Finance professionals should take lead on public sector risk management in era of great challenges

TOP risks facing public sector organisations are financial challenges and an inability to meet changing demands and expectations of the public for services. A global survey of finance professionals and others working in the public sector showed a key part of the global economy wrestling with significant risks, while not always having the tools to cope.

The research, drawing on responses from those working in a range of roles across the public sector — finance, risk, audit and service delivery — found that, for their own organisations, they were worried about funding for public services and the ability to meet the evolving demands of delivering services, as well as finding the people with the right talent and skills.

In ACCA’s survey the following five risks were highlighted as the most significant risks facing respondents’ organisations (percentage figures represent the proportion of respondents identifying the risk as one of their ‘top three’).

• Financial challenges – 49 per cent

• Meeting changing demands and expectations for services — 35 per cent

• Talent and skills deficit – 35 per cent

• Poor organisational culture — 28 per cent

• Ineffective leadership – 26 per cent

In response to the challenges facing the public sector, ACCA’s new guide Calculated Risk makes the case for finance professionals taking a leading role in the risk management process. Despite the skills finance professionals possess, the survey showed that many public sector organisations are not making effective use of their capabilities in risk management. For example, only just over half of respondents (55 per cent) who work in the finance function said they were regularly involved in identifying and reviewing relevant operational risks.

Mark Johnson, ACCA senior subject manager for the public sector, said: ‘Some public sector organisations are neglecting the valuable insight of staff working on the frontline. Identifying risk is a two-way process: organisations need to be made aware of any risks that are not already formally identified and those working in services are often in the best place to identify such risks. Using the knowledge and expertise of staff working in each part of an organisation to build up a profile of risk is critical for a comprehensive understanding of risk.’

In an era where the outlook for public finances is challenging the public sector needs to move away from business as usual if it is to successfully negotiate the significant risks it faces. The finance function is well-placed to recognise risks across the organisation and support leaders in addressing these risks. Ultimately resilience in organisation is built by developing skills and capabilities. Public sector finance professionals who understand the threats and opportunities posed by risk can help build more resilient public services.

Read Calculated Risk: An introduction to finance professionals’ role in understanding risk and building resilience in the public sector.

Editor’s Note

Findings are based on an April 2023 survey of 436 public sector professional in over 60 countries worldwide. Almost nine in 10 were ACCA members or students working in finance, risk, audit policy and service delivery roles.

About ACCA

We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide.

Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 247,000 members and 526,000 future members in 181 countries.

Our forward-looking qualifications, continuous learning and insights are respected and valued by employers in every sector. They equip individuals with the business and finance expertise and ethical judgment to create, protect, and report the sustainable value delivered by organisations and economies.

Guided by our purpose and values, our vision is to develop the accountancy profession the world needs. Partnering with policymakers, standard setters, the donor community, educators and other accountancy bodies, we’re strengthening and building a profession that drives a sustainable future for all.

Find out more at: www.accaglobal.com


By admin

Leave a Reply

Your email address will not be published. Required fields are marked *