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Focus - Risk Management

Risk Analysis and Risk Management in the Public Sector and in Public Auditing

László Domokos
President of the State Audit Office of Hungary

Melinda Nyéki
Auditor Chief Senior Counsellor, State Audit Office of Hungary

Katalin Jakovác
Economist, Auditor, State Audit Office of Hungary

Erzsébeth Németh
University Professor, Adviser to the President, State Audit Office of Hungary

Csaba Hatvani
Senior Auditor, European Court of Auditors, Luxembourg

Published in: Public Finance Quarterly 2015/1 (p. 7-28.)


SUMMARY: The significance of organisational risk management has grown ostensibly during recent decades, and this is true regarding for-profit organisations and public entities alike. There are, however, unique traits that characterise risk analysis and risk management as applied in the public sector, both in terms of areas of application and execution. Being mandatory is the foremost feature of risk management as applied in the public sector, with efforts to minimise risk, and the promotion of compliant operation and financial management serving as the goal. A conclusion that can be drawn from the State Audit Office’s audit and research experience is that even though internal controls are usually developed for risk management in organisations belonging to the central and local government subsystems of public finances, the conscious management of risks is not implemented. Organisations are yet in the learning phase of how to integrate risk management with organisational operations.

KEYWORDS: organisational risk, risk analysis, risk management, organisational integrity, Supreme Audit Institution

JOURNAL OF ECONOMIC LITERATURE (JEL) KÓD: D81, D83, G32, G38, H83


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