Risk Mitigation in Local Government

Simply put, risk mitigation is the process of taking steps to reduce the potential loss and harm of a risk.

Usually, the first step of risk mitigation involves evaluating the likelihood of a risk and how much damage it would cause.

Organizations in every industry face risks, and some level of risk is unavoidable. Risk mitigation – or risk reduction – is a method of risk management. Other methods include risk avoidance, risk transfer, and risk acceptance.

Local governments can’t completely avoid all risks. If government agencies are too cautious in avoiding risks, they miss opportunities for innovation.

Every new program involves some level of risk. And if local governments never implement new programs or new technology, they may become ineffective and inefficient.

Every employee plays a part in reducing risk, but local governments should have a larger plan in place to guide risk management and mitigation.

Here are a few things governments can do to reduce risks:

Conduct a compliance risk assessment

Governments can’t plan for a risk they’re not aware of. Therefore, the first step of risk mitigation is assessing the biggest risks facing an agency or department.

Governments should examine external risks, but they should also look at internal processes.

Many of the biggest risks come through a gap in policy or a lack of compliance. A compliance risk assessment involves systematically comparing the current operations in each department with the proper policies and procedures.

This may sound like a daunting task or something that needs a lot of risk management expertise. But it doesn’t have to be.

Taking time to conduct some in-person interviews and shadowing people at their jobs will allow government agencies to see where there are holes that need to be addressed.

Employees know the inner workings of their department, and they are often aware of liability risks that management may have overlooked.

This type of risk assessment is typically best handled by someone outside the actual department who can bring a more objective viewpoint. But it doesn’t require a skilled risk manager.

It could even be done in a collaborative manner with members of other departments.

Policy and procedure review

We’ve written before about the importance of policies and procedures. Policies and procedures guide internal operations and help ensure that every employee knows the rules and expectations.

Policies and procedures should be living, changing documents. Outdated policies and procedures can increase risks since they may not address current regulations or current technology.

Local governments need to systematically review policy manuals to make sure that they are up-to-date and accurately reflect current practices and priorities.

These reviews should involve representatives from different departments as subject matter experts.

As we wrote in our post about How to Manage Your Local Government Handbook, government agencies should review policies and procedures at least annually, if not more often.

Keeping policies and procedures up to date is an essential part of risk mitigation. Written policies decrease liability by showing the steps a government agency took to follow laws and implement safe practices.

Have employees sign policies

It’s not enough simply to have policies in place. Local governments must make sure that employees read and understand policies.

Collecting employee signatures can help limit a government’s liability if an employee violates policy.

Having a record that proves that an employee saw and affirmed the policy shows that the government agency is not at fault for the employee’s misconduct.

Employee training and regular retraining

Regular training can also help local governments limit liability risks.

Training helps employees see how to apply policies and procedures to their day-to-day work. It helps employees know how to do their specific jobs, but it also shows them how to implement higher-level policies to their day-to-day behavior.

Training shouldn’t just happen during the onboarding process.

Government agencies should conduct regular retraining in high-liability areas such as sexual harassment and discrimination. Reminding employees of laws and expectations can help prevent incidents.

Keeping up-to-date training records can also help local governments limit liability. Training records show that government agencies did their due diligence in communicating expectations for lawful behavior.

An online training management tool can help governments easily keep accurate records. It can also save time, money, and make sure training content aligns with the most up-to-date policies.

Local governments can’t afford to wait until an incident occurs to create a plan to address it.

Risk mitigation strategies can save governments millions of dollars a year in lawsuits. Risk reduction can also help governments operate more efficiently, maintain public trust, and swiftly address any crises that do arise.