US Government Efficiency Solution: Clarify Enterprise Risk Management and Management Controls
This Asset Management Partnership (AMP) Newsletter continues a miniseries that covers how the US Government is failing to manage its built infrastructure and how this problem can be solved. A complete list of preceding articles in this miniseries is provided at the end.
This article focuses on how to solve a key point of failure all Federal agencies are challenged by. The point of failure is the management of enterprise risk. This point of failure is developed in an earlier article in this miniseries titled: US Government Efficiency Failure – Understanding Enterprise Risk.
Evidence of not understanding enterprise risk is when Federal agencies view chronic depletion of built infrastructure as a “tragedy of the commons” problem. That is, the problem is so big or so entrenched that leaders absolve themselves of the responsibility to address it. This is a fiduciary failure that is inherent to the form of asset management allowed in US Government policy – that is, it is a systems failure. It can also be viewed as a failure in leadership.
The US Government does have very good guidance on how to manage enterprise risk. They include:
OMB Circular A-11: Preparation, Submission, and Executive of the Budget is long, but clear that budgets appropriated to Federal agencies must be spend for authorized missions and uses. OMB Circular A-11 requires use of enterprise risk management in budget decision making and execution. US Law also requires that Federal agencies efficiently and effectively manage their built infrastructure – that is, to not ignore obligations to efficiently maintain built infrastructure over its useful life.
US Law contains specific requirements for stewardship, safety, code and regulatory compliance, environmental protection, energy efficiency, and cybersecurity for built infrastructure. Stewardship is about effectively supporting agency mission execution through efficient management of the built infrastructure they are dependent on and responsible for. Stewardship covers requirements to renew assets (as needed) in support of agency needs (when, where, and how needed). This concept was expanded to continual renewal of asset portfolios in the National Academies’ report titled Strategies to Renew Federal Facilities. Enterprise risk management means leaders must shoulder these responsibilities through budget development and execution.
The earlier AMP Newsletter article, US Government Efficiency Failure – Understanding Enterprise Risk introduced indicators for good enterprise risk management. The solution for development and improvement of Federal agency enterprise risk management capabilities means establishing behaviors and developing competencies and capabilities that enable achievement of these indicators. Actions Federal agencies can do to achieve this and advance their ability to implement enterprise risk management are:
Deploy an Asset Management (AM) Framework that conforms to ISO 55000 and codify the AM Framework that operationalizes this in policy, see:
Develop and use Key Performance Indicators that accurately report asset and asset portfolio performance, see:
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Develop and use metrics, means, and measures that link built infrastructure assets to agency performance and achievement of Organizational Objectives, see:
Develop solutions that accurately measure and portray current performance meaningful to resource and investment decision making, and use these means to forecast and predict future performance through resource and investment strategies that execute approved budgets, see:
Following this guidance will establish enterprise risk management capabilities that can see the totality of how resource and investment decisions (both big and small) affect agency performance and provide a solution vector to advance an agency’s enterprise risk management capabilities. The cause-and-effect analysis mechanisms critical to enterprise risk management are inherent to the AM Framework detailed throughout the AMP Newsletter and AMF Journal. Implementation of these enterprise risk management capabilities is through development and deployment of an ISO 55000 conforming AM Framework. Activation of this solution is through the embracement of Management System Thinking as covered in the following miniseries:
If you liked this post, please like and share. The way to help fix the problem of the US Government’s fiduciary failure in managing its built infrastructure portfolio is to help more people understand the problem and solutions for it.
Written to Jack Dempsey | January 21, 2025
AMP Newsletter #106
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Preceding articles at:
My Property ID Registry
1 个月When it comes to non-fixed government property, you can't ever really know if it's lost, missing or stolen, but there is a simple way of improving the probabilities you'll deter problems in the first instance and recover assets in the second.
Senior Fellow and Board Member of Asset Leadership Network, November 2015 -- Present
1 个月Jack -- this is excellent work! This provides the road map. It starts with the understanding of risk management and the use of standards -- recognition of the right road and the road to failure is through the use of the internal control-integrated framework (GAO Green Book), and continual validations of being on the right road is through conformance of generally of accepted auditing standards GAO-24-106786.