here - SMDA - NSW Government

Consolidated
Impact on profit/loss
Change in
unit price
2012
$’000
Hour-Glass Investment - Cash Facility +/- 1% +/-673 -
2011
$’000
SMDA
Impact on profit/loss
Change in
unit price
2012
$’000
Hour-Glass Investment - Cash Facility +/- 1% +/-447 -
2011
$’000
(h) Operational Risk
The Authority manages its operational risk as part of the risk management strategy. Operational risk is the direct and indirect
losses arising from a wide variety of causes associated with the Authority’s processes, personnel, technology, legal and
regulatory requirements and generally accepted standards of corporate behaviour. Operational risk arises from all of the
Authority’s operations.
The Authority’s objective is to manage operational risk so as to balance the avoidance of financial losses and damages to the
Authority’s reputation with overall cost effectiveness and to avoid control procedures that restricts initiative and creativity.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to
senior management within each business unit. The responsibility is supported by the development of standards, policies and
procedures in the following areas:
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Requirements for appropriate segregation of duties, including the independent authorisation of transactions
––
Requirements for the reconciliation and monitoring of transactions
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Compliance with regulatory and legal requirements
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Documentation of controls and procedures
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Requirements for the periodic reporting to senior management, relevant committees and the Board.
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Training and professional development
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Risk mitigation, including insurance where this is effective.
Compliance with established standards, policies and procedures is supported by a programme of periodic review
undertaken by Internal Audit. The results of the internal audit reviews are discussed with management of the business unit
to which they relate, with reports submitted to Senior Management, the Audit and Risk Management Committee, and to
the Board where appropriate.
2011-12 ANNUAL REPORT
59