Auditor General Tytti Yli-Viikari: risk management must be improved throughout central government

Some of the central government’s risks are in danger of remaining unidentified as the number of actors increases. Today, the National Audit Office of Finland (NAOF) publishes its annual report in which it presents to Parliament its key observations on central government finances and governance.

According Tytti Yli-Viikari, the Auditor General of the NAOF, statement risk management as a whole must be improved. Risk management and thus securing the continuity of operations in society have received very little attention at all levels of central government.

“Risk management as a whole and responsibilities should be clarified. Risk management in central government should be organised in a more standardised manner,” Yli-Viikari says.

The processes used by government agencies to identify and manage their risks vary a great deal. Actors that focus on the future, such as the rescue services or the Finnish Defence Forces, are constantly prepared for risks. Almost all other actors only identify exceptional disturbances as risks; threats related to data systems and cyber security, in particular. Other disturbances under normal conditions or factors that will hamper continuity of operations can easily remain unidentified.

Nowadays, risks – also whole new ones – develop and are realised faster than before. The fact that the operations are more complex increases the risks in itself. The operations of the agencies change due to centralisation, outsourcing and privatisation. Agency borders are crossed and actors from outside the Government may also be involved.

“The drawback of this development is that the management of the agencies does not always identify all of their risk management responsibilities. As there are more actors involved, responsibility for risk management as a whole may remain unclear and the level of risk management may be compromised,” Yli-Viikari points out.

The NAOF will hand over its annual report to Parliament on 12 September 2018. In addition to risk management, other themes of the report include off-balance sheet liabilities and good governance. The Government has a significant number of off-balance sheet liabilities that may cause notable expenses in the future. In central government finances, good governance means compliance with the state budget, compliance of the activities with laws, good performance, effective internal control and effective risk management.

The annual report of the National Audit Office of Finland will be published in English later this autumn on the NAOF’s website.