Risk Management During Pandemic and Widespread Illness
All Washington governments are dealing with the impact of the current COVID-19 pandemic. And we will all continue to deal with this constantly evolving situation. Following basic risk management strategies will help your organization survive and be stronger when the pandemic is over.
Risk management is the process of identifying, assessing, and controlling threats to an organization's capital and earnings. These threats stem from a wide variety of sources, including financial uncertainty (think loss of taxes and revenues generated by activities such as park and recreation programs), legal liabilities, strategic management errors, (this is the time for clear strategic decision making, not knee jerk responses) accidents, natural disasters, and even a worldwide pandemic.
Together, the five risk management process steps combine to deliver a simple and effective risk management process.
Step 1: Identify the risk
“What can go wrong?”
One of the challenges with COVID-19 is the evolving nature of the virus’ impact on each of our communities. And the sometimes contradictory advice from state and federal officials causes our citizens to be confused as to what they are supposed to do or not do.
Step 2: Analyze the risk
Will the COVID-19 outbreak have a large or small impact on your organization?
Your answer today will probably be different a week from now. Some of our communities have yet to experience a documented case of COVID-19 while others have had hundreds of cases. Management and elected officials must remain nimble.
Step 3: Evaluate or rank the risk
COVID-19 is a Low Frequency/High Severity risk which has or will impact all governmental entities, our economy, and society in general.
Step 4: Treat the risk
What steps or can be taken to prevent the loss? Social distancing is one way to treat the risk. Closing public facilities and holding remote (as opposed to in-person) meetings are two other mitigation strategies.
What can be done to recover economically, operationally, and as a community?
Step 5: Monitor and review the risk
At this time, monitoring the outbreak in your community and county needs to occur at least daily. Constantly review your strategies and modify existing procedures based on scientific advice and reputable data from local health authorities, such as your county health department and the Centers for Disease Control and Prevention. It is highly likely that you will be changing strategies several times during the course of the COVID-19 outbreak. We may be living with this disease for many months.
Here are some specific recommendations to help you manage your agency during the COVID-19 pandemic:
1. Declare an “emergency”
Do this if your agency hasn’t already done so. This will allow you to streamline processes such as purchases, approval of warrants, expenditures, and implementing contracts. It also becomes the baseline for potential reimbursement by the state or federal government. Without the emergency declaration, your agency may not be eligible for funds related to the emergency.
2. Remember your staff
Make counseling available to staff who are having to deal with the stress of potential exposure to COVID-19, a rapidly changing society where the rules of yesterday will probably not be the rules of tomorrow, and family members or friends who have been directly impacted by the virus. Even the change from working at the office to working at home can be stressful for some. Monitor their physical and mental well-being.
3. Review your Continuity of Operations/Government plan
Depending on your role within the organization, your responsibilities will vary.
4. Dust off and review your Emergency Management Plan (EMP)
Even though most EMP’s are written for response to natural disasters, the principles in the plan will apply to responding to the COVID-19 pandemic. Use the EMP as your roadmap.
5. Stay in contact with your health department
Develop and maintain daily conversations with your local or county health department. Use and follow their direction.
6. Establish a communications plan
Create a plan and use a variety of methods to communicate with your citizens. During an emergency, citizens are hungry for factual information. Be that conduit; if you aren’t, your citizens will find their own information, much of which may not be factual or data based. Keep your elected officials briefed so that they can answer questions from their citizens.
7. Review economic impacts on your agency
With a number of counties extending the time to pay property taxes, affected jurisdictions will probably will see a reduction of revenue during May, traditionally when most agencies receive the first large distribution of property taxes from the county. Do you have enough cash reserves to cover normal expenses, such as salaries, until you receive the tax revenues? Consider the impact of reduced sales tax revenues due to the closure of businesses. If you operate utilities, you may even have a positive surprise with an increase due to people staying at home and using more water and electricity.
8. Begin preparing an amended budget
Virtually all governments will need to adjust their currently adopted budget. And you will have to revise it several times.
9. Document, document, document
Keep track of all expenditures and the loss of revenue that might even be remotely associated with your response to the COVID-19 pandemic. You will need it when dealing with the Federal Emergency Management Agency (FEMA), the Small Business Administration, the Washington State Auditor’s office, and other agencies.
10. Use remote meeting methods
Local governments can use a variety of social meeting platforms to hold public meetings and continue to operate as close to normal as possible.
It is in times such as now that citizens look to government for answers, reassurance, and calm strategic messaging. Use these risk management tools to provide what the public, and your organization, need to survive and prosper.
MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.