the municipal secretary desktop reference manual - Southwestern ...

A Risk Management Policy
for Small Municipalities
A Checklist of Components
1. The governing body has adopted a risk management policy statement which defines
programmatic objectives and expectations, fixes responsibilities and establishes criteria
for determining types of risks to be assumed.
2. The municipality=s risk management program is comprehensive in nature, involving four
distinct areas: risk identification, risk evaluation, risk control and risk funding.
3. The governing body has either created the position of risk management officer or, in
cooperation with neighboring governments, appointed an officer to serve the several
jurisdictions. In either situation, the officer is vested with the responsibility for the
development and administration of a comprehensive risk management program.
4. A risk management records system is maintained so that the responsible municipal
official may readily identify, measure and treat risks.
5 The governing body has adopted an incident reporting system to enable the municipality
to identify all incidents, their causes and their remedies.
6. The jurisdiction=s evaluation process involves techniques which enable it to measure
degrees of loss based upon frequency and severity (cost). The degree of loss identified
for each type of risks is used to determine the risk control means to be utilized.
7. The nature and types of risks which generally confront the local government has been
identified and analyzed by the municipality so that it can adopt a comprehensive risk
management program.
8. As part of its preparation for the renewal of its insurance program, the municipality has
an external audit conducted to determine compliance with its risk management program
and to evaluate its effectiveness. The audit is performed by a professional risk manager
appointed by the governing body and paid a fixed compensation.
9. The municipality=s decision-making process includes a risk assessment to determine
impacts new or expanded municipal activities or curtailed activities may have on risk
exposures and the municipality=s capacities to meet these new potential exposures.
10. An internal control system designed to protect the jurisdiction=s assets and resources
from loss due to waste, fraud and abuse has been implemented by the governing body.
11. The municipality=s risk management program includes four approaches to risk control:
avoidance, reduction, transfer and retention.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
No
No
XIV-5