Development of internal control and risk management
The Ministry of Finance is continuing to develop internal control and risk management in central government. The Ministry has launched a project to determine how to make internal control and risk management into a strategic part of central government processes. The Ministry has partnered with the OECD in the project, which is being funded by the EU.
The Ministry is working with stakeholders to determine whether the regulation or organisation of internal control and risk management needs to be amended. The project also aims to improve central government’s ability to plan, develop and maintain effective internal control and risk management processes.
The project will produce:
- an analysis of the current state of internal control and risk management;
- a recommendation on strategic guidance of internal control and risk management and the implementation of that guidance;
- a recommendation on the legislative foundation for internal control and the development of that foundation;
- a methodological description of systematic risk assessment;
- a frame of reference for monitoring and assessment.
The term of this central government development project is one and a half years. The work is scheduled to be completed in March 2025.
The Government Financial Controller’s Function in the Ministry of Finance is responsible for the project. The Advisory Council on Internal Control and Risk Management and the risk management and internal audit divisions operating under it will also participate in the project. Other central government parties will be consulted over the course of the project, for example, in interviews, workshops, hearings and stakeholder meetings.
The European Union is financing the project through the Technical Support Instrument (TSI). The purpose of the TSI is to support EU Member States in planning and implementing reforms
The need to develop risk management at the level of central government has come up in several connections. For example, Parliament has required that central government risk management be improved by creating compatible procedures and defining the responsibilities for risk management at the level of central government.
In 2021, a Ministry of Finance working group set a target that risk management should support the central government's decision-making as part of its system of corporate governance. The working group made proposals for the organisation, guidance and division of responsibilities of risk management on the central government level and for coordinating risk management at the branch of government and agency levels.
Among other things, the working group proposed an assessment of the statues, instructions and recommendations governing risk management. Relevant statutes can be found in budget legislation and other legislation. The working group was of the opinion that the assessment should identify needs for review.
Developing risk management at central government level: Final report of working group (publication archive Valto)
EU Technical Support Instrument (European Commission)
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