UNCW
Institutional Risk Management
Tier 1 Update and Trend Report
& IRM Policy Overview
Presented to the Audit Committee of the Board
of Trustees April 3, 2014
Agenda


Tier 1 Update and Trend Report:

Senior officer stakeholder analysis workshop

Interviews of key stakeholders/workgroup leads

Evaluation of key risk indicators

Risk trend and reason for change in trend
IRM Policy Overview

Policy overview

Policy review and implementation

Next steps
University of North Carolina Wilmington
UNCW
Institutional Risk Management
Tier 1 Update and Trend Report
Tier 1 Update and Trend Report –
2013 vs. 2012

Senior officer stakeholder analysis workshop

Interviews of key stakeholders/workgroup leads

Evaluation of key risk indicators

Risk trend and reason for change in trend
University of North Carolina Wilmington
Senior Officer Stakeholder Analysis
Workshop

Objectives:

Ensure senior level officials
are better informed about
potential risks at an early
stage

Have a dialogue about risks
and opportunity through the
prism of strategic priorities

In accordance with AGB Best
Practices, have top
administrators prioritize risks
and become engaged in
evaluating the effectiveness
of risk mitigation strategies

Charge workgroups with next
steps
University of North Carolina Wilmington
Senior Officer Stakeholder Analysis
Workshop

Discussion: Areas of Challenge and Opportunity
Through the prism of institutional priorities: student completion, student recruitment,
attracting talent

Each item below received at least 22% of the total points for a particular question (Presented 5 questions and
for each question with 5 possible responses, attendees were asked to anonymously rank the top 3.)

Diversity of faculty, staff and students

Employee collaboration and innovation

Compensation philosophy and faculty incentives

Carry forward reform

Enrollment yield and out of state demand elasticity

GA performance measures

Predictive analytics

Space utilization

Operational efficiency

Adherence/awareness of legislation, regulations and university policies

Policies/guidelines for applied learning, service learning and internships

Business continuity planning (disaster resilience)

Health and safety compliance
University of North Carolina Wilmington
Senior Officer Stakeholder Analysis
Workshop


Assessment of Mitigation Strategies
Possible responses were Keep Doing the Same, May Be Able to Reduce Resources,
Need to Apply More Resources, and Need to Try Different Approaches


Apply More Resources (Highest to Lowest)

Campus Health & Safety

Regulatory Intervention & Talent Management

Volatile Essential Resources

Continuity of Operations
Try Different Approaches (Highest to Lowest)

Continuity of Operations

Talent Management

Volatile Essential Resources
University of North Carolina Wilmington
Evaluation of Key Risk Indicators
Regulatory Intervention – High Rating
Strategic
Objective/
Risk Issue
Risk Name/
Potential
Impact
Mitigate regulatory
Inability to comply
compliance risk in an with all laws and
inherently
regulations
decentralized
environment
Key Drivers
Risk
Trend
Increase in federal and state
regulations
Increased regulatory
oversight and intervention:
 Accountability for safety
 Deficient
coordination and
support
 Financial
losses
 Reputational
damage
 Limits to
institutional
control
 Pressure to increase
affordability and efficiency
 Governance
Turnover in positions
responsible for compliance in
a decentralized environment
Reason for Change
in Trend
DOE: Title IX/Clery Act
Nationally, OCR
investigations, Resolution
Agreements, inquiries
UNCW: increased use of
trained fact finders for
investigations and external
agency inquiries
New reporting and
education requirements in
the Violence Against
Women Reauthorization
Act / and Campus Sexual
Violence Elimination Act
(SaVE) Provision
Pending rulemaking on
federal financial aid
University of North Carolina Wilmington
State legislation – tuition
agreements, taxation
Evaluation of Key Risk Indicators
Talent Management – High Rating
Strategic
Objective/
Risk Issue
Risk Name/ Key Drivers
Potential
Impact
Mitigate talent
management
recruitment and
retention risk
Inability to
achieve a
right-sized,
innovative,
highly effective
workforce
 High quality
faculty and
dedicated staff
are essential to
delivering the
programs and
services that best
serve 21st
century students
 Strategic
 Operational
Risk
Trend
Reason for Change
in Trend (No Change)
Very limited institutional
control over compensation
FY12 to FY13, Turnover rose
from 9% to 10.8%.
Stagnant wages, colliding
with greater economic
mobility
The highest numbers were in
employees with 0-10 years of
service. The highest %
increase was in employees
with 16-20 and 26-30 years of
service. Of the total 10.8%
workforce turnover,
retirements represented 3.0%
of workforce turnover.
Young professionals
perceive the speed of
innovation to be greater in
healthcare, tech and other
sectors
Noncompetitive
salary/benefits/startup
packages
Counterpoints
Instit. Quality and Location
Staff compensation
philosophy
University of North Carolina Wilmington
Turnover was highest among
professionals and
paraprofessionals (these two
classes represent 52.5% of all
turnover and increased from
10.8% to 14.7%)
Faculty turnover is <6%
(Note: Fall ‘13 was marked by a
number of failed searches and
instances of first choice
candidates turning down offers)
Evaluation of Key Risk Indicators
Campus Health & Safety – High Rating
Strategic
Objective/
Risk Issue
Risk Name/ Key Drivers
Potential
Impact
Mitigate
vulnerability of
students, faculty
and staff in an open
environment
Inability to
achieve the
safest possible
environment in
which to learn
 Expectations and  Reputational
accountability for
safety and health
is increasing, and
existing
resources must
meet stronger
requirements




Hazard
Operational
Financial
Compliance
Risk
Trend
Shift in expectations from
shared responsibility to the
safest possible environment
in which to learn
Increased frequency of active
shooter threat
Fire alarms and suppression
system upgrades are not
adequately funded with R&R-at UNCW, Dept. of Insurance
and ADA improvements are
prioritized with receipt funding
and one-time general funds.
Title IX training of mandatory
reporters
University of North Carolina Wilmington
Reason for Change
in Trend (No
Change)
CY12 to CY13, violent crimes
increased from 10 to 15
Weapons violations decreased
and many other indicators
remained constant
Workers’ compensation costs
increased 3.5%
Student health as self reported
by students improved; health
center visits increased 11%
1 reportable fire vs. 0 prior yr
1 fire alarm system upgraded in
2013 and two residential
sprinkler systems completed in
late 2012 (four building system
upgrades planned 2014)
(Note: Campus-based
consulting and training provided
by a Title IX National resource
group in 2014)
Evaluation of Key Risk Indicators
Continuity of Operations – High Rating
Strategic
Objective/
Risk Issue
Risk Name/
Potential
Impact
Key Drivers
Mitigate impact to
students, faculty
and staff, facilities
and operations on
a campus
vulnerable to
natural disasters
Inability to
complete our
teaching,
research, and
service mission
following a
disaster
Critical restoration abilities rely
heavily on redundancy and
hardening of critical services,
such as power and data
Addition of MARBIONC
building with generators
increased availability of
hardened research centers
Scientific and computer-based
research heavily dependent
upon specialized equipment
and facilities
Data connectivity made
redundant with MCNC site
 Continuity of
operations plans
are essential to
minimizing the
severity of impact
and related
business
interruption
caused by natural
or manmade
disasters





Strategic
Operational
Financial
Hazard
Reputational
Risk
Trend
Dependency upon provision of
supplies and services
Mutual aid is key when there is
a larger scale event affecting
the region
Effectiveness requires
developed knowledge,
relationships and training of
essential personnel
Core mission delivery
alternatives aid in recovery
University of North Carolina Wilmington
Reason for
Change in Trend
(No Change)
Improved supplier
agreements (e.g., fuel
contracts)
FY13 - process initiated to
update FEMA Mitigation
Plan, which develops
priorities for maintaining and
restoring critical services
and specialized needs.
(Note: FEMA Approved
Plan on 3/24/14, thus
allowing federal
reimbursement)
Relationships with county
and system
Evaluation of Key Risk Indicators
Volatile Essential Resources – High Rating
Strategic
Objective/
Risk Issue
Risk
Name/
Potential
Impact
Key Drivers
Minimize the
impact of changing
resources
supporting
University mission
and goals
Shortfalls in
funding with
limited time to
manage
accordingly
Other state policy funding
priorities
No significant change in
the revenue mix
Heightened
competitiveness for
research awards
Budget cuts FY14 >
FY13, but less than
FY12
 Tuition limits,
Heightened
 Financial
competitiveness for out of
 Strategic
 Operational state students
state support,
research
funding, and
outcomes-based
policies have the
potential to
reduce the
availability of
essential
resources
Risk
Trend
Limits on available Pell
funding
Pressure to increase
expenses to meet
regulatory mandates
Updating, retrofitting and
replacing critical
infrastructure
University of North Carolina Wilmington
Reason for
Change in Trend
(No Change)
Counterpoints
Focused management
and support of research
Innovation in the
creation of new revenue
sources
Improved Moody’s credit
rating outlook
Monitoring and watching
out of state enrollment
for any downside impact
UNCW
Institutional Risk Management
IRM Policy Overview
IRM Policy Overview

IRM statement of
goals and focus

Consistent
approach by the
entire university

Standards include
ISO 31000 and
COSO

Approach reflects
an understanding
of the institution
and its context

Policy Purpose
Policy Approach and
Policy Principles
Principles reflect
ISO 31000, Risk
Management
Principles and
Guidelines
University of North Carolina Wilmington
IRM Policy Overview

Board of Trustees

Chancellor

IRM Steering
Committee

IRM Officer

IRM Committee

Executive Sponsors,
have the authority
and commitment to
assist those
accountable and
responsible

Cyclical, regular
processes

Formulation and
evaluation of treatment
measures
Responsibilities
Processes and
Treatment
University of North Carolina Wilmington
IRM Policy Review and Implementation


Policy Review and Implementation:

IRM Steering Committee, Academic Coordinating Council,
Student Affairs Directors, and Chancellor’s Cabinet

Implementation begins with the establishment of Executive
Sponsors, effective July 1.
Next Steps:

Refinement of Key Risk Indicators

Repeat cycle of Risk Identification, including but not limited to:


Academic processes for applied learning and research support
Data security (intrusion protection and detection, vulnerability
assessment and policy awareness and training)
University of North Carolina Wilmington
Questions
University of North Carolina Wilmington