Managing operational risk at the VAT department

Abstract

Changes in the Public Sector are ongoing; the VAT Department being part of the Public Sector is in no less of a challenge. With changes and challenges come new risks and new dynamics that create new risks. Having said this instils the need for a robust Operational Risk Management, this can be achieved through guidelines such as the Operational Risk Management Framework issued by Basel Committee on Banking Supervision. Although this framework was issued as guidelines for the banking industry, through this study it shall be seen how it can be adapted to any organisation according to its exigency. The study for this long essay is to determine what is and if Operational Risk Management exists in the VAT Department. Through this study Operational Risk Management shall be defined and discussed step by step. The implementation of an Operational Risk Management Framework is explored through secondary data. Primary data shall be formulated through interviews with the Assistant Director Administration and the Senior Systems Analyst following which an analysis is made to reveal if Operational Risk Management exists at the VAT Department. This study has been performed to: • Promote awareness of the importance of Operational Risk Management amongst senior management and once implemented to create a Risk Management culture amongst all employees. • Implement timely cost effective risk mitigates. • Prevent failure from inadequate internal processes, people, systems and external events. • Create awareness of what is a Business Continuity Plan and a Disaster Recovery Plan and if such plans do not exist, • To urge the implementation of such plans The VAT Department can benefit through this study to consolidate its present risk management to Operational Risk Management.