This Web page has been archived on the Web.
2007 February Report of the Auditor General of Canada
Exhibit 3—Examples of risks that can affect the Department of Highways and Public Works in achieving its program objectives
Accidental hazards: All types of hazards, with the exception of those resulting from pre-meditated activities.
Act of nature: An event resulting from natural causes, which could not have been prevented by reasonable care or foresight.
Client-related risk: The risk that actions (or inactions) taken by clients or user groups may negatively affect the achievement of objectives. For example, a client department may change its requirements for the amount and type of space and its fit-up specifications. The change may result in delays and increased costs.
Employee risk: The risk that arises from the actions (or inactions) of employees, whether intentional or unintentional. This category encompasses the risks associated with insufficient human resource capacity and/or competence.
Environmental risk: The risk that capital projects may have a negative impact on the environment and that measures to mitigate the environmental impact may not be fully complied with.
Financial risk: The risk arising from insufficient funding for operational and/or strategic priorities.
Fraud/corruption: The risk of loss or damage to assets due to an intentional misrepresentation (by an employee or the public) with an intention to deceive for personal gain.
Hostile actions from others: Malicious or premeditated actions against the organization, including action from the public.
Landlord-related risk: The risk that actions (or inactions) taken by the landlord or lessor of a building may negatively affect the achievement of objectives. At the end of a lease, a landlord of an occupied building may not be willing to renegotiate at favourable terms or may not want to modify buildings to meet the government's project schedule. This may result in increased costs and delays and less-than-satisfactory accommodation.
Legal risk: The violation of laws, regulations, and treaties/agreements and any legal liability that may result from these violations. For example, potential legal risks may arise in the tendering process, including changing the bid process midstream or accepting an unsolicited proposal from a bidder.
Partner or supplier/contractor risk: The risk that actions (or inactions) taken by partners or suppliers/contractors may negatively affect the achievement of objectives. For example, a heated construction market may have an adverse impact on cost estimates. A contractor may not be able to finish the construction of a capital project because of unforeseen construction or financial problems. This may result in cost overruns, delays, and potential liability for the government.
Political risk: The risk that a change of government, political priorities, or policy direction may negatively affect the achievement of established objectives. Unwarranted political involvement may work against the judgment and decision making of department officials.
Process risk: Inadequate or failed processes or management practices, including non-compliance with policies and procedures.
Public opinion risk: The risk that public opinion may impede the organization's ability to achieve its objectives.
Technology risk: The risk arising from inadequate infrastructure (technology or otherwise), including system failure.