Umsobomvu Youth Fund Annual Report 2006 - Nyda

statement ofcorporategovernanceYouth Advisory CentreRisk ManagementThe Fund’s Risk Management Unit,reporting to the Office of the CEO,monitors the Fund’s entire risk profile,ensuring that major risks are identifiedand reported upwards, and providesand maintains the risk managementinfrastructure to assist Management infulfilling its responsibilities. The RiskManager assists in the execution of therisk management process but the primaryresponsibility to the Board, which isultimately accountable, remains withManagement.• Credit and Market Risks;• Human Resources Risks;• Information and Technological Risks;• Business Continuity and Disaster Recovery;• Physical, Health and Safety Risks; and• Political, Social and Economic RisksEnterprise-wide risks, risk management policies and the management of and controlover these risks will change over time. The Fund views risk management as an ongoingprocess and, during the year under review, it continued to review its enterprisewiderisks, risk management policies and procedures at regular intervals in order toensure that its management of business risk is progressive and adjusted to changingcircumstances. A business continuity strategic plan and disaster recovery plan was alsodeveloped and implemented by 31 March 2006.Umsobomvu Youth Fund 2006 Annual ReportThe Fund’s approach to risk managementis to identify as many of its businessrisks as possible, to formulate andimplement policies to counter, manage,control, reduce or eliminate these risks.Risk policies are developed and reviewedfrom time to time to take account of newbusiness imperatives.UYF’s policy, approach to and managementof risk is documented in the UYFRisk Management Strategy, approvedby the Board of Directors in June 2005,and distinguishes between the followingidentified areas of risk:• Business and Operational Risks(Corporate Governance, Sustainability,Programmes, Support);The Risk Manager, under the supervision of the Chief Financial Officer, reports directlyto the Chief Executive Officer and has a standing invitation to attend the Board AuditCommittee. The Risk Manager convenes the quarterly Risk Management Committeemeetings, which are chaired by the Chief Executive Officer.Internal controlThe Fund’s internal controls and systems are designed to provide cost-effective,reasonable, but not absolute assurance as to the integrity and reliability of the annualfinancial statements, that assets are adequately safeguarded against material lossor unauthorised loss and transactions are properly authorised and recorded. Suchcontrols are based on established written policies, procedures, structures and approvalframeworks which are monitored throughout the Fund and are applied by trained,skilled personnel with appropriate segregation of duties through clearly defined lines ofaccountability and delegation of authority. The control system includes comprehensivereporting of critical risk areas which are identified by operational risk managementand confirmed by Executive Management. Both Management and internal auditorsclosely monitor the controls and ensure actions are taken to correct deficiencies as theyare identified.30