OMB has released a new version of Circular A-123, presenting a new government-wide enterprise risk management (ERM) framework to be rolled out over the next year with the goal of having an ERM program in every department.
“This circular formalizes ERM principles that many agencies may already apply in their current management practices. The complexity of government requires leaders at every level to recognize and take steps to mitigate risk,” a summary said.
The update was two years in the making and represents the first revision since 2004 in the circular, which is now titled Management’s Responsibility for Enterprise Risk Management and Internal Controls. The Office of Executive Councils convened a group of risk practitioners from across government to develop an ERM Playbook, which includes a sample ERM framework as well as additional examples and templates that agencies can adapt based on their needs.
OMB will use the ERM Playbook as part of a series of ERM rollout meetings over several months starting in August. The meetings will assist agencies meet the requirements of A-123 and build on their ERM capabilities, the summary said.
ERM will be a culture change for most agencies that will require them to look at risk across the organization, as well as along the “seams” where bureaus intersect, to have a more holistic view of risk, it added.