The scale, complexity and likely impacts of the demographic, health, security and climate challenges facing Victoria requires a mature, well-coordinated approach to public sector risk management.
The Victorian Government Risk Management Framework (the Framework) published by the Department of Treasury and Finance (DTF) in 2007 has helped public sector agencies improve their risk management, and they largely comply with the high-level requirements.
However, risk management is not yet widely and consistently used as a proactive, outcome driven discipline because of weaknesses in the Framework and the practices used to translate it into action. The most important gap in the Framework is in the management of interagency and statewide risks, and agencies have not found a way to work with each other to manage them effectively. The information provided by DTF and the Victorian Managed Insurance Authority (VMIA) to government is not sufficient for it to understand the significance of the risks faced by the public sector.
Progress to address this critical gap has been very slow. VAGO's 2007 audit reminded agencies of our earlier 2003 recommendation to fix this problem and warned that the Framework DTF was developing in 2007 would not fully address this. DTF missed this opportunity to modify the 2007 Framework to address this concern and has not remedied this in the six years since then.
The formation of the Whole-of-Victorian Government Statewide Risks Interdepartmental Committee in December 2012 and DTF's planned update of the Framework in 2014 provide the opportunity to make significant progress