Enterprise Risk Management, 2nd Edition

CHAPTER 38Enterprise Risk Management in the Public Sector: A First Look at the U.S. Department of Commerce

 

KAREN HARDY, EdD

Former Deputy Chief Risk Officer and Director of Risk Management at the U.S. Department of Commerce

 

INTRODUCTION

The purpose of this case study is to describe the challenges and opportunities of implementing the revised Office of Management and Budget (OMB) enterprise risk management (ERM) requirements at an executive-level agency.

In July 2016, the White House Office of Management and Budget issued the revised OMB Circular No. A-123 retitled “Management's Responsibility for Enterprise Risk Management and Internal Control.”

The update significantly expanded the scope and content of the circular by adding a new Section II entitled “Establishing Enterprise Risk Management in Management Practices.”

When transmitting the revised circular, OMB explained that government operations have changed dramatically, becoming increasingly complex and driven by changes in technology. At the same time, resources are constrained, and stakeholders expect greater program integrity, efficiency, and transparency in government operations.

OMB also emphasized that the expansion of OMB Circular A-123 was necessary to ensure that federal managers are effectively managing risks associated with achieving an agency's strategic objectives and arising from its activities and operations. The expanded responsibilities are intended to reinforce financial integrity and the modernization ...