An Application of Fault Tree Analysis to the Identification and Management of Risks in Government Funded Human Service Delivery

In Singh, K., Singh, B., et al. (Eds.), Proceedings of the 2nd International Conference on Public Policy and Social Sciences held in Kuching, October 31, 2011

15 Pages Posted: 6 Nov 2012  

Peter Lacey

Department of Communities, Disability Services and Child Safety

Date Written: November 1, 2011

Abstract

In many economies, the delivery of Government funded human services through nongovernmental organizations has increased dramatically, resulting in a qualitative change to the scale and nature of the associated risk. Previously, where it existed, nongovernmental service delivery was ancillary to, or a minor component of, social policy delivery. In this context, risk was reasonably focused on probity. As nongovernmental service delivery increasingly becomes the main vehicle for the achievement of these policy objectives, risk to service system itself must be systematically identified and managed.

This paper employs a single exploratory/descriptive case study to describe one such approach to this need, developed in the Queensland Department of Communities. This approach incorporates the application of fault tree analysis to the determination of the elements of risk for that Department as a funder of human services prior to the qualitative ranking of risk. This enables the integration of strategic risk management with both operational assessments of funding risks and with senior executive performance management. The approach also addresses the allocation of risk ownership, from strategic through tactical to operational levels, within the agency.

The paper highlights the importance of recognizing failure of the service system as an integrated whole as the top level event, while addressing the complicating role of multiple and competing objectives. The service system includes the client, the service provider, and the policy-setter/funder, not merely as system components but as collaborators. For this reason, the risk management approach described also seeks to recognize the criticality of the dynamic relationship of these collaborators.

The risk identification methodology described has application to the management of funded nongovernmental service systems, with the potential to reduce compliance and monitoring costs for governments and nongovernmental service providers. More broadly, risk assessment frameworks adopted by governments have the capacity to modify nongovernmental behaviors in intended and unintended ways. This means that exploration of these frameworks is an important policy and research question in an emerging field of public administrative practice. This use of fault tree analysis opens future avenues for research, particularly as related to improved quantitative risk assessment for human service system management.

Keywords: Social services, Risk assessment, Nongovernmental organizations, NGOs, Performance evaluation, Performance management

JEL Classification: C61, D81, H57, I38, J41, L33, L89

Suggested Citation

Lacey, Peter, An Application of Fault Tree Analysis to the Identification and Management of Risks in Government Funded Human Service Delivery (November 1, 2011). In Singh, K., Singh, B., et al. (Eds.), Proceedings of the 2nd International Conference on Public Policy and Social Sciences held in Kuching, October 31, 2011. Available at SSRN: https://ssrn.com/abstract=2171117

Peter John Lacey (Contact Author)

Department of Communities, Disability Services and Child Safety ( email )

Level 13
111 George Street
BRISBANE, Queensland 4000
Australia

HOME PAGE: http://www.communities.qld.gov.au/

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