Appendix C

Possible Risk Assessment Criteria by Type

Introduction

This appendix presents suggested risk elements that should be considered for inclusion in the risk assessment tool. This list of suggested risk elements incorporates some of the existing elements and suggestions from interviewees. The elements are organized in three groups:

Recipient risk . Risk elements associated with the recipient, regardless of the nature of the project under consideration. The recipient risk should remain constant across all active projects with a given recipient. Recipient risk should be evaluated during the project assessment process. While recipient risk should be reevaluated periodically, it is unlikely to change as frequently.
Project risk . Risk elements associated with the project as planned, regardless of the recipient or the eventual performance of the project. The project risk will likely remain constant over the lifespan of the project.
Compliance risk . Risk elements associated with the recipient's compliance to the terms and conditions of the contribution agreement. These risk elements capture risks associated with the progress and financial performance of the project, and must be continually reassessed throughout the lifespan of the project in conjunction with WD's monitoring and claims verification activities.

Risk Assessment Criteria

Recipient Risk

Characteristics of recipient
- Nature of recipient (e.g. government, non-profit, industry)
- Organization maturity
- Financial stability (e.g. stability/liquidity of private organizations; dependability and predictability of funding for non-profit and public sector organizations)
Project management capacity (assessment of depth and breadth of management team, and project manager-contracted or otherwise)
Financial management capacity (assessment of experience of controller, quality of financial records/record-keeping processes and quality of internal controls)
Previous government experience with recipient

Project Risk

Predictability of project outputs (e.g. research project vs. business plan)
Project complexity (e.g. multiple suppliers, simultaneous project streams)
Project size in relation to organization size
Nature of contribution
- Total contribution size
- Exposure (% of eligible expenses contributed)
- Requirement for repayment
Public profile

Compliance Risk

Monitoring and claim experience
Audit results
Verification and monitoring controls of other funders (i.e. to what degree can WD expect other funders to help monitor compliance and prevent double dipping)
Project progress (e.g. achievement of milestones, required extensions)
Project financial performance (e.g. cost increases, changes in funding from other sources)

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