1

Welcome to the CRM meeting,Internal Auditors!

14th October 2010

Access

Cost benefit analysis

Risk analysis

Target

- C - O - R - R - U - P - T - I - O - N -

Individual behavior

Administrative/Legal

implications

Possibility of getting caught

• Integrity Education

• Equity• Fairness• Unclear

Rules• Service

standards

•Stringent Rules

•Penalties• Higher

Cost•Accounta

bility

• Guardian• transparency• Check and

balance

Track I

Track II

RISKS

FACTORS/

REMEDIES

What’s CRM?

CRM = Corruption Risk Management

Identify potential corruptive risks

Assess the problem

Provide the ethical improvement

includes the methods, processes used by organizations to manage risks related to eliminate the corruption factors.

Definition of Risk

• Risk is normally understood as the “chance of something happening that will have an impact upon objectives”. (Australian Standard on Risk Management)

• Corruption poses risks that can affect the ability of an organization to achieve its objectives

A tiny defect in an auto prevents a car from

working properly

Why should be every risk reviewed?

Only 0.5% of defects can cause a fatal problem!!

So many workshops,,,Meetings,,, Reports,,,

But, there’s no distinct solutionAnd getting worse, Why???

Did we really reviewAll the risks ?Is there any important issuethat we neglected?

Risk identification - concept

Titanic “A ship never wrecked”

- Small negligence & lack of life boats produced a huge

acc ident

CRM processRisk

Assessment2

Scoringrisks 3

Select Major risks

3

What should be innovated

Risk Identification

1

What risks threat us?

Choosing & implementing a course of actionFeasible Plans

6

•c

Risk Identification

1

What risks threat us?

Cause Analysis

4

Finding causes

Strategic solutionResponse

and strategic solution

5

Monitoring the implementation of action plans

Compliance

7

Risk identification - concept

Recognize the risk which leads organization to danger

Any behavior that is illegal, immoral or dishonest , by by people in the organization.such as, bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement and misuse of power.

What is the corruption Risk ?

- Evaluate recognized risks with impact , frequency

Frequency(2)

Risk Impact (1)

Assess(1) X (2)

Bribery

Average : 3.6

3 54

24

2 1

3

24

What’s the standard of scoring ?

Risk Assessment - concept

Average : 2.4

Members should raise their hands simultaneously so that one person’s decision does not affect others The process is easy to use decision making is made quickly

Fist - to - Five

This indicates the level of agreement with fingers when deciding the priority of issues

Process Set a subject

Set a subject Set a

subject

Raise fingers Set a

subject

Add up the numbers

of fingers Set a subject

Decide the

priority

Week disagreement

Week agreement

Strongagreement

Risk Assessment - tool

stage situation explanation Example of affect standard

5 Extremely Serious impact

Extremely Serious influence that we have some doubt about maintaining the organization

[customer] It brings the class action suit.[Government] Deprive the right of company operating or Give a notice to quit.[Mass media] The incident can be reported as a headline.

4 Seriousimpact

Significant influence in main management but not related to exist the organization

[customer] There is a movement of class action or large volume of popular complaint.[Government] It is subject to disciplinary action, Warning and tight constraint .

3 Normal impact Negative influence about sub-task and main management

[Mass media] Notice through the company’s website.[Government] Give a salary reduction or internal penalty

2 Lowimpact

Not related to main management, but some negative influence

[customer] There is some of popular complaint.[Mass media] Only the half of internet sites posted it.

1 Insignificant impact

Insignificant influence about organization and management

[customer] The potentiality of dissatisfaction.[Mass media] None of reporting.

Risk Assessment - concept

stage Possibility of arising explanation

5 Almost Certain Once a day ( Everyday)

4 Likely Once a month

3 Possible Once a year

2 Unlikely Once at least in three years

1 Doubtful Once at least in five years

Risk Assessment - concept

stage Possibility of aris-ing

explanation

5 Certain Once a month (frequently)

4 Almost Certain Once in four months i.e thrice a year

3 Probable/Possible Once a year

2 Probably not/Unlikely Once at least in 5 years

1 Certainly not Once at least after 5 years

frequency Risk Assessment - concept

Select Major risks II – Option - 2

Average :4

Misuse of authority 2.4 x 4 =

9.6Average : 2.4

Bribery

Average : 2

2 X 1.8 = 3.6

Average : 2.4

Frequency(2)

Risk Impact (1)

Assess(1) X (2)

Lack of transpare

ncyAverage : 3.6

3.6 X 2.4= 8.64

3 4

2

2

1

3 2

4 4

2 2 2

3 3

5

5 55 3

2

1 3 2

2 2

23 2

1 1Average :1.8

Choose the risk that have high score !

Impact

1 Normal risk 2Significant risk

4Extremely serious Risk

Frequency

ExtremelySeriousimpact

Seriousimpact

Normalimpact

Lowimpact

Insignificant impact

5

4

3

2

1

1 2 3 4 5

Doubtful Unlikely Possible LikelyAlmost Certain

3 Serious risk

Select Major risks I –Option 1

Choose the impending matter among the risks using the I -F matrix

Cause Analysis – concept & tool

Knowing the cause of major risks , lead to find a solution of each causes that is helpful to manage corruption risk.

beginner

selfishness

Narrow road

Uncorrect indication

Traffi ccongestion

individual

system

Why

WhyWhy

Core risk

situationMany cars

Acc ident

Why

Brainstorming?? Brainwriting!!! 1. Think the idea freely and Write it on post-it note2. Express opinions and add replies to other’s opinions3. Let a charter record proposed ideas so that all can see

Rule.1

NO Blaming !NO Criticism !NO Complains !

Rule.2

Quality ?Quantity !!

Considering the response degree, Let’ find a super idea for improvement using Brainwriting !!

Strategic solution – “Finding solution” concept & tool

Please avoid these opinions…,,,

Let’s use more specific words…Is it diffi cult?…

These expressions cover too many opinions!

How aboutasking “How”?

Make some plans for

innovation system

More educational systems for innovation

Sharingsuccessful Innovationcase

Tips for finding solution !

Subject : Anti-corruption

KRI : Detailed Action Plan

Major Risk :

Solution Detailed Plan Charge

Schedule

July. Aug. Sep.

what How Who

Implementation

Monitoring of implementation action plans

-Proper monitoring systems put in place;

-Bi-annual or annual review of compliance.

How?Choose the most vulnerable Ministry/organization- example: MoH/MoWHS/MoAF;

Understand the vision of the organization.

Divide into 4 groups;

Identify risks (group wise)

Assess risks based on impact and frequency and Plot

Select the major risks based on the assessment (high score)

Analyze causes of each risks

Strategic solution

Implementation action plan

Monitoring of implementation of action plans.

YES, WE CAN IF WE CHOOSE TO!

Together we can make a difference in building a

harmonious, happy and a healthy democratic Bhutan.