Home' Defence Magazine : Issue 6 2009 Contents 20
DeFenCe AuDIt AnD RIsK CoMMIttee
he need for Defence to
better understand and
reduce the risks it faces every
day is necessary for continued
organisational success and
reputation, and a re-focused
Defence Audit and Risk Committee
(DARC) is on the task.
Previously known as the Defence Audit
Committee, the re-naming of the committee
is a reflection of the increased emphasis on
the importance of risk management, said the
committee’s chair, Mr Paul Rizzo.
“The Secretary and CDF recognised the need
to build enterprise risk management practices and
they could see the value of having a committee
that had the capability to advise on the appropriate
limits to Defence’s risk exposure,” Mr Rizzo said.
Pressures such as climate change, the
global financial crisis, and a spate of high profile
corporate failures have increased the level of
scrutiny of organisations. This increased level of
scrutiny has resulted in the DARC being given a
wide scope to enable it to look across the whole
span of the organisation.
“We don’t just review the preparation of
Defence’s financial statements and oversee
internal audit activities any more,” Mr Rizzo said.
“We look right across the organisation at the
full range of strategies, policies and processes
needed to manage major risks and meet Defence
With the members of the committee
coming from a range of public and private sector
backgrounds, they are able to provide independent
and expert advice on all aspects of governance.
“Even though the committee is independent from
the management chain, the DARC has a very strong
channel of communication with the Secretary and
Senior Leadership Group that allows the Committee
to raise issues at a senior level and follow through on
proposed remediation plans,” Mr Rizzo said.
When the 2009 priorities for the Committee
were outlined, Mr Rizzo stated the importance
of improving the reach of the Committee within
Defence and the value in inviting more managers
and risk owners to the Committee.
There are big plans on the horizon this year for
the committee including:
■ Continued monitoring of the risk framework in
place and how it is evolving to more sharply
define risk appetite metrics and trade-offs
■ establishing an inventory of Defence
compliance obligations and mitigation
■ monitoring the impact of the Strategic Reform
Program on Defence's risk profile
■ more closely integrating the internal audit
program with the Strategic Reform Program
■ ensuring the financial statements are on track
■ remediation the internal controls framework
■ understanding the impact of the Mortimer
Review on the Defence –DMO relationship
and how this might affect the interface
between the DARC and the DMO Materiel
Audit and Risk Committee, and
■ monitoring the strategy for ICT and major
Management Information Systems.
“We already have several initiatives in place
to improve the interaction with senior management
and to identify issues, risk and strategies where
the DARC can assist,” Mr Rizzo said.
“These include regular meetings with the
Secretary and CDF, reporting on risk and control
issues to the senior leadership team and the
establishment of a dedicated advisory and support
team service led by the Acting Deputy Secretary
Strategy, Mr Peter Jennings.”
Want to know more:
The DARC secretariat provide a comprehensive
advisory and support function to assist the
Committee in shaping its work program and
facilitating effective engagement between the
DARC and the senior leadership of Defence.
The secretariat staff may be contacted by any
Group or Service which requires assistance
from the DARC in its areas of expertise.
More information on the DARC can be found
on the Defence Intranet at: http://intranet.
the light on risk
By Leila Daniels
ABOVe: The Defence Audit and Risk Committee:
Mr John Brown, Vice Chief of Defence Force
Lieutenant General David Hurley, Mr Alan Beckett;
(front) Mr stephen Merchant and Mr Paul Rizzo
(Chair). Photo: Bryan Doherty
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