SA Water Annual Report 2004-05

CORPORATE GOVERNANCERisk managementThe SA Water Board’s Audit Committee has beendelegated responsibility, via the Audit CommitteeCharter, for the overall review and evaluation of riskmanagement processes within SA Water.This high-level focus on risk recognises thecritical role risk management plays in ensuringthe Board can fulfil its corporate governanceand supervisory responsibilities.The Audit Committee’s roles include:> Understanding the risks of the business> Monitoring risk management activities on anannual basis> Endorsing and contributing to the identificationof SA Water’s annual risk profile> Endorsing SA Water’s Risk Management Policyand FrameworkTo assist both the Chief Executive and theAudit Committee:> A General Manager Business Assurance & Riskhas been appointed who reports, via the CorporationSecretary, to the Audit Committee on a bi-monthlybasis and to the Chief Executive as required. Arisk management team is responsible for providingpolicies and procedures, systems and tools, training,coordination and facilitation services and monitoringmechanisms related to risk management activity> All personnel within SA Water, including executive,management or other employees and our key partnersplay a role in the identification, assessment andmanagement of risks.The SA Water Risk Management Policy and Framework,as approved by the Audit Committee, formallyestablishes the process of assessing the businessrisks and opportunities we face, as well as developingand implementing strategies to proactively transfer,manage and/or mitigate these risks.This policy was developed in conjunction with a leadingconsulting firm in 1998 and has been revisited andre-approved by the Audit Committee on a biennialbasis since this time. The Policy is consistent with theAustralian/New Zealand Risk Management StandardAS/NZS 4360: 2004 and the South AustralianGovernment Risk Management Policy Statement, 2003.The policy principles are applied across SA Water and riskassessments have become a key component of strategicand business unit planning, capital and asset planning,emergency response and business continuity planning.Business Assurance & Risk also plays a key role inmonitoring effective management of risk. BusinessAssurance & Risk and External Audit report to the AuditCommittee directly on specific control issues identified.FraudSA Water has in place a code of conduct which informsstaff members on what activities might constitute fraudand warns them against committing fraud. There is alsoa specific fraud policy and fraud guidelines, dealing withthe treatment of any detected frauds.Extensive strategies are in place to control andprevent fraud in terms of the controls exercisedover SA Water’s accounting policies and thephysical security of assets. There is also a regularlyconducted internal audit process which targetsthe areas identified as high risk. There was oneinstance of fraud detected in SA Water in 2004-05.Policy DevelopmentSA Water maintains a policy framework with morethan 50 policies and a suite of associated guidelines.These cover a range of SA Water activities andprocesses including environmental responsibilities,financial management, procurement, human resourcemanagement and OHS issues. During 2004-05 ourpolicy framework was revised and updated.16 SA WATER annual report