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Module 5: Financial, Resource and Risk Management

Topic 4: Risk assessment and management

"The whole point of undertaking a project is to achieve or establish something new, to venture, to take chances, to risk."

Project Management Body of Knowledge (PMBOK), 1987

Project risk management seeks to anticipate and address uncertainties that threaten the goals and timetables of a project. The uncertainties may include:

  • questions of scope;
  • research in other institutions that may impact on your research;
  • the availability of suitable facilities;
  • the availability and quality of researchers available to you;
  • budgetary and personnel constraints; and
  • incomplete knowledge.

These risks lead rapidly to delays in research completion and budget over-runs which can severely undermine confidence in the project and in the chief investigator. Since project risk management is process oriented, it remains possible to have a successful project and an unsuccessful product (for example, a research project that meets all time, budgetary, and quality requirements yet is overtaken by research breakthroughs in another part of the world).

While any project accepts a certain level of risk, regular and rigorous risk analysis and risk management techniques serve to identify and defuse problems before they arise.

Learning outcomes

After completing this topic you should be able to:

  • Recognise the concepts of risk assessment and management
  • Apply these concepts to financial risk and financial management of research projects
  • Recognise the concept of internal control
  • Apply the principles of internal control to research projects.

Topic content

Read the following notes:

4.1 The risk management process

4.2 Benefits of risk management

4.3 Example of a risk assessment technique

4.4 Internal control

4.5 Managing and monitoring your grant

Activity 4 – Create a risk matrix

Take 10–20 minutes to complete the following tasks. Make a note of your responses and bring them to the workshop.

Make a list of some budgeted expenditure in a project on which you are currently working (or are familiar with). When you have done that, create your own version of the risk assessment figure presented in Subtopic 4.3 and place each expenditure item within the risk matrix. Note the risk associated with each expenditure item.

Now answer the following questions:

  • Who are the major stakeholders associated with your project?
  • What are the major financial risks associated with your project?
  • What would be the major impacts if critical or high level financial risks occurred?
  • For each step in a research project which you have undertaken – from application through to project closure – identify the internal controls that are in place
  • Would you recommend additional controls?

 

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