RISK MANAGEMENT AUDIT TOOL 9 Essay Example

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Risk Management Audit Tool

8th June 2011

Abstract

As mentioned before, the level of efficiency and effectiveness of a plant can be determined by the audit finding in the process of risk management. Predictive data provided can be used to determine the required rate of return and the payback period of the plant (Merritt & Smith, 2002). This helps in determining the amount of work that can be completed in a given period. Mechanisms to resolve the identified hazards should be put in place to ensure efficiency and effectiveness of the plant (Marrison, 2002). This can make workers more comfortable at work place.

Furthermore, audit tool for the review of risk management processes AS/NZS requires that audits are necessary to “determine whether the system (including the organizational policy, objectives and targets, have been properly implemented and maintained and whether the organization has met the performance objectives set within its OHS policy (Pickett, 2005). Just a recap, a number of tools for risk management processes and control for environmental and plant hazards were identified previously.

Among the tools identified included the SWOT analysis for identifying the strengths, weaknesses, opportunities and threats that face the organization in terms of risks, aggregate risk tool (ART) for monitoring the effectiveness and efficiencies of risk management processes in the organization, probabilistic risk assessment for estimating the probability of occurrence of a problem in the organizational processes (Kendrick, 2009). In this section of the project, the audit tool that will be used for monitoring and reviewing the effectiveness of the above risk management processes tools and controls for environmental and plant hazards will be identified and discussed.

It is imperative to note that the performance measures for job scheduling include weighing the actual time taken for every job performed against the allocated time taken to complete that particular job. The closer the actual time taken to perform a particular job is to the allocated time for that particular job the better. The performance measure in relation to wearing PPE such as ear pads to the operators include complains gathered from the operators about effects of the noise to their ears and injuries to other parts of their bodies.

The more complains and injuries received from the operators the less effective is the PPE program. The performance measure in relation to maintaining equipments include weighing the standard performance duration of the equipment against the actual duration of performance of the equipment. This means that if the performance of the equipment is closer to its set standard duration then the equipment is well maintained. However, if the equipment breaks down often and does not meet its set duration of performance, then the equipment is not well maintained.

The first action was noise reduction. The findings from the audit reveal that using the sound level meter equipment helped to control noise in generator room thus providing conducive environment at workplace. The second action was reducing risks in the workplace. The findings from the audit revealed that when organizational policy, objectives and targets have been properly implemented and maintained then the number of risks in the workplace reduce significantly. The third action was enhancing employee relations with managers and other stakeholders. The audit findings revealed that improvements in organization operations reflected a cordial relationship between the employees and their managers as well other stakeholders.

Professional practice was particularly applied in identifying the performance measures necessary to ensure that all the processes in the workplace such as performing jobs as per the required schedule, reducing the number of complains and injuries in the workplace and identifying the standards of performance of every equipment required for determining whether the equipments are well maintained or not were used. The other way professional practice was applied include determining whether after the necessary parameters were put into place, noise was reduced, risks in the workplace were reduced and whether the relation between the employees and the managers and stakeholders was achieved.

The most appropriate audit tool to be used to achieve the above purpose is the Premier Physical Activity Council (PPAC) audit tool (PPAC, 2002). The purpose of the above audit tool is to determine the baseline for measuring any kinds of improvements in the wellbeing of the people in the organization. It is imperative to note that the effectiveness of the risk management processes and control for environmental and plant hazards can only be determined by the improvements in the wellbeing of the people working in the organization.

Since, the PPAC tool seeks to determine the level of such improvements then it is the most appropriate tool for monitoring and reviewing the effectiveness of risk management processes and controls for environmental and plant hazards. The PPAC audit tool must be regularly applied in the organization because it helps in highlighting improvement areas that must be taken into consideration in order o make risk management processes and controls for environmental and plant hazards more effective (Occupational Health, Safety and Welfare (OHS). It helps the organization to maintain and develop continuous cycle of improvements in order to achieve higher levels of wellbeing.

The PPAC audit tool will be used together with a survey from the employees as well as the resource kit on wellbeing in the workplace to help the organization to design, plan and implement as well as evaluating the programs tailored to the employee and organizational needs. The scope of the audit entails identifying whether the organization has risk management processes and what types or risk management processes are available in the organization. It also entails identification of the types of controls of environmental and plant hazards available in the organization (Gorrod, 2004).

The other area covered by the PPAC audit tool is whether the organizational management has signed the policy on risk management processes and control for environmental and plant hazards available in the organization. The other area covered in the PPAC audit tool is identification of the mechanisms put in place to educate the employees on the risk management processes and controls for environmental and plant hazards and how the information is used by the employees to control environmental and plant hazards as well as mitigate against risks that may arise in the course of undertaking their duties in the organization (Hopkin, 2010).

The performance measures and indicators included in the PPAC audit tool to monitor and review the effectiveness of the risks management processes and controls for environmental and plant hazards include the scouring performance measure which indicates how the organization scours in different areas of risk management processes and controls for environmental and plant hazards (Crockford, 1986). For example, more “yes” means that the organization scores well in different areas while the number of “Nos” means that the organization does not score well in different areas of risk management processes and controls for environmental and plant hazards which shows that the risks management tools and environmental and plant hazards control measures are not effective.

The audit should be conducted by the groups or individuals in the organization bestowed with the responsibility of managing risks and ensuring that the wellbeing of the employees in the workplace is always taken into consideration (Hubbard, 2009). In this perspective, the two most preferable groups to be consulted in the process of audit include the employs and the organizational management.

The first strategy of collecting the information includes formulating the audit questions to be presented to the employees and the management. The second strategy is to ensure that the answer by the employees and the management regarding the risks management processes and controls for environmental and plant hazards can be answered with a “Yes” or a “NO”. The third strategy is totalling the number of “Yes” and “NO” answers provided and related to the different risk management processes and control for environmental and plant hazards.

The fourth strategy is recording the total number of “Yes” and “No” answers on the score sheet which is the performance measure tool for monitoring and reviewing the effectiveness of the risk management processes and controls for environmental and plant hazards in the organization. I will apply professional practice to the audit by recording the required or necessary action plan on every “NO” answered provided in the PPAC audit tool which will help in the preparation of a summary of the entire audit.

From the audit tool, it is evident from the score sheet that the risk management tools and controls for environmental and plant hazards are effective in the organization going by the total number of “YES” answers provided. However, actions need to be taken in developing achievable and measurable objectives and goals for the wellbeing of the employees in the organization. Areas of improvement identified in the audit tool include inclusion of information on risk management processes and environmental and plant hazards during the induction process of the employees in the organization.

The other area of improvement is providing the required infrastructure that can support the safety and wellbeing of employees in the workplace. The identified improvements should be carried out by developing the required infrastructure in the workplace environment such as constructing alternative exit doors and educating the employees on risk management processes and controls for environmental and plant hazards available in the organization.

References

Crockford, N. (1986). An Introduction to Risk Management (2 ed.). Cambridge, UK: Woodhead-Faulkner. p. 18.

Gorrod, Martin (2004). Risk Management Systems : Technology Trends (Finance and Capital Markets). Basingstoke: Palgrave Macmillan.

Hopkin, P. (2010). «Fundamentals of Risk Management» Kogan-Page.

Hubbard, D. (2009). The Failure of Risk Management: Why It’s Broken and How to Fix It. John Wiley & Sons. p. 46.

Kendrick, T. (2009). Identifying and Management Project risk: Essential Tools for failure proofing your project. Washington, DC: AMACOM.

Marrison, C. (2002). Fundamentals of Risk Management. New York: McGraw-Hill.

Merritt, G & Smith, P. (2002). Proactive Risk Management: Controlling Uncertainty in Product, Development. Sydney: Development Press.

Occupational Health, Safety and Welfare (OHS). Hazard management. Retrieved from http://www.unisa.edu.au/ohsw/procedures/hazard.asp#References

Pickett, J. (2005). Auditing Managers: The Ultimate risk Management Tool. New York: Wiley.

PPAC audit tool (2002). Retrieved from http://www.getmoving.tas.gov.au/RelatedFiles/PPAC_Audit%20tool%20fv%20070907.pdf