Every year, key academic and administrative leaders engage in a risk assessment process. Within each functional area, risk identification starts with a review of the area’s strategic objectives and its critical functions or services. They then identify key events or circumstances that, over the next three years, could prevent a functional area or the University from achieving its objectives or executing its strategies. Risk assessment leaders consider risks regardless of whether they are under the University’s control as well as the possible interdependence of different risks and their sources. Each functional area identifies risks that it might face, including university-level, campus-level and department-level risks.
Each identified risk is ranked as high, medium or low in three categories: impact, likelihood and velocity. Finally, a management plan is developed for each risk, describing how Georgetown is managing the risk.
The following example illustrates the factors considered for individual risks identified through the risk assessment process.
|Risk Event/ Description||Federal sequester and current budget paralysis|
|Risk Category||Federal Budget|
|Key Considerations/ Assumptions||Potential NIH, Department of Education and other federal budget cutbacks could undermine research and other programs.|
|Impact||High (Annual loss of $10 million or more)|
|Likelihood||Medium (Risk is probable and has a medium chance of occurring in the next 3 years)|
|Velocity||Medium (Risk impact will be felt in 3 to 9 months after occurence)|
Developed a financial plan that assumes reduction in federal funds for foreseeable future. Seeking opportunities to diversify research portfolio.
All of the risks identified by the University’s functional areas are compiled into a risk inventory. The ERM Committee ranks the identified risks into three risk prioritization levels: