Commerce and Customers when assessing borrowing and investment decisions. 5. RISK ASSESSMENT Risks Risk Assessment Risk Risk Management Level Both the Treasury Medium The Treasury Interest rate Management and the Management Practices exposures Investment strategies are designed to mitigate Security of have been produced on risks from this function. investments the basis of estimates This is managed by Impact of and assumptions regular contact, briefing legislation regarding interest rates documents and Risk of and financial market information with the fraud/error, conditions. However, as Treasury Council’s covering the Council has no Management authorisation, control over these there consultants, strict approval and is an inherent risk that control over the security processing of the strategies do not of investments, regular transaction; provide the optimum monitoring and approval Dealing benefit to the authority control procedures arrangements Cash flow implications Insufficient MRP Any new borrowing that Low All new capital schemes provided for in the the Council takes out require a report being budget will incur an MRP submitted to Council for Council’s charge in the revenue approval. By including budget (in accordance an assessment of MRP with the MRP Policy) (as per the which will specifically recommendation within relate to the asset this report) there will be acquired or enhanced. an early indication as to This will need any future MRP liability ‘charge’ to be built into the which can be built into revenue budget to the budget accordingly. ensure the Council has sufficient resources available to meet the liability.
Commerce and Customers when assessing borrowing and investment decisions. 5. RISK ASSESSMENT Risks Risk Assessment Risk Level Risk Management Interest rate exposures Security of investments Impact of legislation Risk of fraud/error, covering authorisation, approval and processing of transaction; Dealing arrangements Cash flow implications Both the Treasury Management and the Investment strategies have been produced on the basis of estimates and assumptions regarding interest rates and financial market conditions. However, as the Council has no control over these there is an inherent risk that the strategies do not provide the optimum benefit to the authority Medium The Treasury Management Practices are designed to mitigate risks from this function. This is managed by regular contact, briefing documents and information with the Council’s Treasury Management consultants, strict control over the security of investments, regular monitoring and approval control procedures Insufficient MRP provided for in the Council’s budget Any new borrowing that the Council takes out will incur an MRP charge in the revenue budget (in accordance with the MRP Policy) which will specifically relate to the asset acquired or enhanced. This ‘charge’ will need to be built into the revenue budget to ensure the Council has sufficient resources available to meet the liability. Low All new capital schemes require a report being submitted to Council for approval. By including an assessment of MRP (as per the recommendation within this report) there will be an early indication as to any future MRP liability which can be built into the budget accordingly.