Post by Stacey Fraser on Aug 31, 2021 12:40:25 GMT
Risk Management
Lesson # 3
Scenario #1
Questions:
• What are the major (obvious and not so obvious) risks of this contract?
The major risks of this contract would be the obvious financial risk. Reputational risk and business/contractual risk would also play key parts, as well.
• What should be done early to ensure that the contract does not fail?
Assuming Easterseals TX is part of the Fedcap group, I would ensure communication and guidance is sought from leaders/directors of other Fedcap companies that have similar programs and insight. Community partnerships would also need to be sought early, as there needs to be an avenue to direct people into the program and help support them beyond Easterseals TX capabilities.
• What are some of the tripwires that the program director needs to be able to monitor should the company move forward? How will that measurement occur?
A program director would need to monitor the metrics very closely, the number of people coming into the program and the milestones being met or not met. How to monitor this? The program director would have to establish a system with the intake people and support people so that there is constant accurate communication as to the numbers and potential challenges being faced.
• How can you negotiate this contract to mitigate as much risk as possible?
Seems that the only negotiation possible would be in terms of the total number of people trained, the total number of people placed in jobs, and the retention rate after 6 months. The unknown financial piece in terms of fee for service payment may also be able to be negotiated based on the previous provider’s failure.
Scenario # 2
Questions:
• Was a fraud committed? Are there any compliance issues?
I am not seeing obvious signs of outward fraud, however, there appears to be red flags from the onset. In terms of fraud, we can’t really speak to if fraud has occurred, as we are not able to know what the compliance standard is, if any, from a contractual standpoint or just from a Fedcap/City agency perspective. Seems the lack of information in this area does not allow for a clear-cut answer.
• What were the risks involved with this contract?
The risks involved in this contract appear to be numerous with the little information provided. From the info, there are obvious financial risks, but we can’t determine why. There is an obvious reputational risk, for both Fedcap and the City agency, as the dealings with the City agency seem to have been very limited with the exception of the one person. Did we even know the reputation of the City agency before the contract was awarded? Fedcap may or may not have investigated the contract from a business perspective beyond that one person, therefore, there could very likely have been other info that needed to have been known and taken into consideration at the onset of the contract or prior to the contract being signed.
• How could you have mitigated them?
Asking more questions, should have occurred from the onset. Was the contract looked at from a financial perspective, from a reputational perspective, from a business risk perspective, etc. Was the City agency investigated and were there dealings with anyone else besides the one person that left under seemingly suspicious circumstances? I think information, from the beginning, could have mitigated many things.
• What specific controls should we have implemented?
I think a contact beyond the initial counterpart person was needed from the beginning. Having the full weight of a contract with only one key contact seems very risky (at least as far as the information provided to us is concerned). Who is/was this person and why the subterfuge from the beginning? A full risk analysis of the contract/situation seems as though it would have key, assuming this wasn’t done. A more thorough history of the City agency and its reputation might have provided more info used from the beginning in deciding if the contract was deemed an acceptable risk. With the little information provided, it would appear this was a risky endeavor and most likely should not have been pursued past an initial interest phase.
• Are there any lessons learned?
In this scenario, there are many lessons learned. I think the basic lack of information and communication is key. Fedcap should have known, up front, more about the contract, the agency, other key players in the agency so that a more informed decision could have been made – from a risk management perspective!
Lesson # 3
Scenario #1
Questions:
• What are the major (obvious and not so obvious) risks of this contract?
The major risks of this contract would be the obvious financial risk. Reputational risk and business/contractual risk would also play key parts, as well.
• What should be done early to ensure that the contract does not fail?
Assuming Easterseals TX is part of the Fedcap group, I would ensure communication and guidance is sought from leaders/directors of other Fedcap companies that have similar programs and insight. Community partnerships would also need to be sought early, as there needs to be an avenue to direct people into the program and help support them beyond Easterseals TX capabilities.
• What are some of the tripwires that the program director needs to be able to monitor should the company move forward? How will that measurement occur?
A program director would need to monitor the metrics very closely, the number of people coming into the program and the milestones being met or not met. How to monitor this? The program director would have to establish a system with the intake people and support people so that there is constant accurate communication as to the numbers and potential challenges being faced.
• How can you negotiate this contract to mitigate as much risk as possible?
Seems that the only negotiation possible would be in terms of the total number of people trained, the total number of people placed in jobs, and the retention rate after 6 months. The unknown financial piece in terms of fee for service payment may also be able to be negotiated based on the previous provider’s failure.
Scenario # 2
Questions:
• Was a fraud committed? Are there any compliance issues?
I am not seeing obvious signs of outward fraud, however, there appears to be red flags from the onset. In terms of fraud, we can’t really speak to if fraud has occurred, as we are not able to know what the compliance standard is, if any, from a contractual standpoint or just from a Fedcap/City agency perspective. Seems the lack of information in this area does not allow for a clear-cut answer.
• What were the risks involved with this contract?
The risks involved in this contract appear to be numerous with the little information provided. From the info, there are obvious financial risks, but we can’t determine why. There is an obvious reputational risk, for both Fedcap and the City agency, as the dealings with the City agency seem to have been very limited with the exception of the one person. Did we even know the reputation of the City agency before the contract was awarded? Fedcap may or may not have investigated the contract from a business perspective beyond that one person, therefore, there could very likely have been other info that needed to have been known and taken into consideration at the onset of the contract or prior to the contract being signed.
• How could you have mitigated them?
Asking more questions, should have occurred from the onset. Was the contract looked at from a financial perspective, from a reputational perspective, from a business risk perspective, etc. Was the City agency investigated and were there dealings with anyone else besides the one person that left under seemingly suspicious circumstances? I think information, from the beginning, could have mitigated many things.
• What specific controls should we have implemented?
I think a contact beyond the initial counterpart person was needed from the beginning. Having the full weight of a contract with only one key contact seems very risky (at least as far as the information provided to us is concerned). Who is/was this person and why the subterfuge from the beginning? A full risk analysis of the contract/situation seems as though it would have key, assuming this wasn’t done. A more thorough history of the City agency and its reputation might have provided more info used from the beginning in deciding if the contract was deemed an acceptable risk. With the little information provided, it would appear this was a risky endeavor and most likely should not have been pursued past an initial interest phase.
• Are there any lessons learned?
In this scenario, there are many lessons learned. I think the basic lack of information and communication is key. Fedcap should have known, up front, more about the contract, the agency, other key players in the agency so that a more informed decision could have been made – from a risk management perspective!