Department of Internal Audit and Compliance

Finance and Accounting - Physical Risk Management

Effectiveness and efficiency of operations 

A. Risk of accidents is reduced by providing a safe working environment.

  1. Have hazardous jobs, activities, or locations and been identified and formal safety procedures and policies developed to manage hazards in these areas?
  2. Is worker compensation or related insurance claims monitored? Are underlying causes of the claims analyzed and compared to claim experience industry averages?
  3. Has a regular maintenance program been established for machinery and equipment and any malfunctioning of equipment investigated, resolved, and documented on a timely basis?
  4. Are external resources such as insurance University loss control or industry safety management experts employed to identify safety risks and recommend appropriate precautions?

B. Adequate insurance coverage is maintained at a minimum cost.

  1. Are employees with risk management training and experience retained to help identify the potential risks of loss or damage to physical resources and assess the related financial loss and other consequences?
  2. Have competitive quotes been obtained from third party insurance carriers for the insurance coverage desired?
  3. Has the adequacy of existing insurance coverage in light of prevailing market conditions and circumstances been reviewed periodically?
  4. Are alternatives considered for insuring certain risks where the coverage is either not available or cost prohibitive?

C. The risks of incurring significant losses in physical assets are evaluated.

  1. Are operations, business plans, and historical events analyzed periodically, in association with insurance carriers, legal counsel, and other appropriate parties, to ensure that all risks and contingent liabilities are managed properly?
  2. Have information systems been configured to provide information on all risk-related costs including insurance premiums, self-insured losses, and risk management personnel costs?

D. Risk management strategy is integrated with University strategy.

  1. Has a risk management strategy been developed that is consistent with the University's culture and long-term goals?
  2. Has a proactive risk management approach been adopted, based on loss prevention rather than loss control, to focus on anticipating what can happen so that preventive steps can be taken?
  3. Is legal counsel engaged to periodically review applicable policies, procedures, and safety precautions?

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Last Updated: 1/3/23