RISK - HANDY-LESSON 3 2pm 9-9-23 Kuscco Supervisory Committee

Sultan Amri
Fellow KIM
Member : IoD, PRSK, PTAK, TSC, CCOP
Expert: Governance ; Strategy; Leadership; Business Improvement
Seasoned trainer in
SACCOs –KUSCCO, ATC Coop University & a number
of DTS Tier 1, 2,NDTS Saccos , Corporates, SMEs,
Governments, Universities ;
Kenya. Uganda. Tanzania,. Somalia. Djibouti. South Sudan . Rwanda. DRC Congo. Dubai. Turkey. Japan. Netherlands, Etc.
Tel : +254722282062;
Email: [email protected]; NAIROBI, KENYA.
29-4-23- Sacco
9-9-2023
RoSCiRM
Role of Supervisory
Committee in
RISK
MANAGEMENT
[email protected]
HBR
Risk management
RISK MANAGEMENT
A systematic process to identify, evaluate and address risks on
a continuous basis before such risks can impact negatively on
the institution's service delivery capacity
RISK
A situation involving exposure to danger.
Risk implies future uncertainty about deviation from expected

earnings or expected outcome.
Risk measures the uncertainty that an investor is willing to take

to realize a gain from an investment.
Risks—SACCOs— brainstormed by participants
1. Technology 1. Fraud
2. Court cases 2. Forgery
3. Sacco unable to pay loans
3. Procurement
requested
4. Corruption 4. Members unable to repay –
5. Impunity credit risk
6. Government 5. Political risk –change of
regulations government
6. membership dwindling
7. Staff given increment 7. Common bond opened –
x2 per year without
appraisal their biz not performing
8. Coop bank no longer giving
8. Default concessional loans
9. Nepotism in 9. Dormant saccos
employment 10.Risk of unethical ‘branding’
Risk Management System[*]
Basic Elements of a risk management
system That is effective, that works:
1. Active oversight by
1. Supervisory committee,
2. Audit Committee,
3. the Board
2. Adequate policies, procedures and limits
3. Sound implementation by management of
Risk register
the risk management policies, procedures
and limits
4. Adequate risk monitoring and management
information system(MIS)
5. Adequate internal controls
5
[*] it is called Enterprise Risk Management ERM=Risk Based Approach to managing an enterprise
Risk management Process
1. Risk identification RISK
1. Identifying current and emerging risks IDENTIFICATION
2. Risk measurement
1. Developing risk assessment and
measurement systems RISK
3. Risk control MEASUREMENT
1. Establishing policies and practices to

manage risks
2. Developing risk tolerance limits for Board RISK CONTROL
approval
4. Risk monitoring
1. Monitoring positions against approved risk
tolerance limits and RISK MONITORING
2. Reporting results of risk monitoring to senior
management and the Board 6
RISK IDENTIFICATION AND ANALYSIS
..general framework
PROBABILITY SEVERITY Value ACTION
N RISK category T/ R/ A/ P? or MITIGATION:
Specific risk 1,2,3 1,2,3,4 S/A/R/A/? NARRATIVE
[1]ANTI VIR
Example ICT [2]Firewall
Viruses 3 3 9 Take [T] [3]POLICY, TRAINING
Password theft
Hacking
If someone has a low risk tolerance, they likely make more conservative business decisions that do
not pose a threat to themselves or their organization.
Someone that has a higher risk tolerance, may opt for more aggressive decisions in which they have a
higher likelihood for consequences or face more dangerous consequences.
According to ISO 31000, a risk appetite definition is “the amount and type of risk that an organization
is prepared to pursue, retain or take.”
PROBABILITY IMPACT
3=CERTAIN, 1=NEGLIGIBLE
2= POSSIBLE, 2=MARGINAL
1= RARE 3=CRITICAL
4=CATASTROPHIC
Assess your Sacco’s readiness in Risk Management==YES or NO
1. Does the SACO have objectives of RM, a policy, a plan

2. Does the Sacco follow strict financial risk management practices
3. Are operational risks monitored
4. Is there regular communication on RM to the rest of the staff
5. Is there regular training on RM to Management and staff
6. Is Risk register available and up to date
7. Has the Sacco appointed a RM coordinator (champion)
8. Has the Sacco set the risk appetite and risk tolerance
9. Does the sacco carry out Quarterly and annual risk assessment
10. Does the Sacco incorporate risk analysis into strategic planning
11. Does the Sacco include RISK as a Standing agenda in Board Meetings
and monitor resolution of deficiencies
12. Does the Sacco implement Risk assessment report recommendations
and provide an index(%achieved)
8
SASRA REGULATION-–EXTRACT FROM the Cooperative Societies Act, 1997
(1) The supervisory committee provided for under the Cooperative Societies Act, 1997 shall, in addition to the duties
assigned to it under the Cooperative Societies Rules 2004, perform the following functions —
1(a) review internal controls including the scope of the internal audit program, the internal audit findings, and
recommend action to be taken by management;
1(b) review internal audit reports and their overall effectiveness, the scope and depth of audit coverage, reports on
internal control and any recommendations and confirm that appropriate action has been taken;
1(c) ensure that accounting records and financial reports are promptly prepared to accurately reflect operations and results;
1(d) review management reports, and reports from the internal and external auditors concerning deviations and
weaknesses in accounting and operational controls;
1(e) monitor the ethical conduct of the Sacco society and consider the development of ethical standards and
requirements, including —
1-e-(i) effectiveness of procedures for handling and reporting complaints;
1-e-(ii) reviewing any related party transactions that may arise within the Sacco Society; Responsibilities of external
auditors to the Authority.
1-e-(iii) verifying that relevant plans, policies, and control procedures are established and properly administered;
1-e-(iv) investigating members complaints and making recommendations for redress;
1-e-(v) considering any matter of significance raised by members during the annual general meeting or the Authority.
(2) The supervisory committee shall prepare and submit quarterly reports to be presented to a joint meeting with the
board of directors within thirty days after the end of each quarter.
(3) The supervisory committee shall submit or cause to be submitted to the Authority all quarterly reports of the
supervisory committee, together with comments and actions made by the board of directors, within thirty days, after
presentation to the board of directors.
-x-A person who contravenes the provisions of this Part commits an offense and on conviction is liable to a fine of one hundred
thousand shillings or imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.
THE
END
THANK
YOU
Sultan Amri
Fellow KIM
Member : IoD, PRSK, PTAK, TSC, CCOP
Tel : +254722282062;
Email: [email protected];
NAIROBI, KENYA.

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Sultan Amri

Risk implies future uncertainty about deviation from expected

Risk measures the uncertainty that an investor is willing to take

1. Establishing policies and practices to

1. Does the SACO have objectives of RM, a policy, a plan

Member : IoD, PRSK, PTAK, TSC, CCOP

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