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Controlling and risk management

As a non-profit organisation, the Red Cross, with its complex and diverse procedures, must always pay particular attention to maintaining its principles and guidelines at all levels. The basis for all of its work and its most important asset is the trust of the population. In order to ensure this remains so and to continuously improve its work, the GRC is subject to a number of voluntary coordinated control mechanisms.  

External audits

The German Red Cross annual report, notes and management report are prepared by an external auditor in accordance with the requirements of the German commercial code and compliant with the principles of sound management according to Article 53 of the German Budgetary Procedures Act. Projects with public funding are subject to regular control of the responsible federal ministry or the Bundesverwaltungsamt (administrative office). The GRC is compliant with special conditions as apply to international projects co-funded by the EU or federal ministries. One of the largest donors, the European Humanitarian Aid department (ECHO), organises regular reviews of both financial and organisational structures as well as of internal control systems. The German Red Cross is regularly confirmed as one of ECHO’s reliable partners. Joint projects with other Red Cross societies, for example the IKRK, are reviewed after completion to consider efficiency, benefits and sustainability.

Internal audits

Internal audits are performed by the staff members of a department reporting directly to the management board. They review proper and orderly business management, proofs of utilisation of donations, accounting and associated procedures. Furthermore, all international relief projects of the German Red Cross are subject to regular controlling. These reviews are frequently undertaken by external experts, sourced for example from auditing firms. In addition the auditing department provides tools and organises training measures for employees in the general secretariat and its international delegations.

Ombudsman

The German Red Cross was one of the first non-profit organisations to establish an ombudsman office in 2008. The ombudsman is an external party who accepts information from employees with respect to for example suspicion of corruption, undue advantage or other fraudulent damaging actions. The ombudsman provides the function of an external, independent point of contact for employees of the general secretariat also those abroad as well as the bodies of the national association. His role is to follow up on all reports and to exert a powerful preventive effect simply by the presence of a body guaranteeing rigorous monitoring.

Ombudsman: Attorney at Law, Dr. Rainer Buchert
Telephone: 069/71033330 or 06105/921355
Email-contact: dr-buchert(at)dr-buchert.de

Identifying future risks

Being dependent upon widely fluctuating donations was regarded as a major risk for the German Red Cross in 2010. In order to reduce that risk and to put its international relief operations on a secure basis, medium-term and long-term fund-raising targets were agreed. The National Headquarters of the GRC has also developed a diverse range of controlling instruments as a means to identify risks early on and hence mitigate their consequences.

Risk management

The risk management system implemented by the German Red Cross is developed from the German law on the control and transparency of enterprises (KonTraG). The executive committee receives an annual report on the current status of risk management as assessed by the management board and department heads as well as an evaluation of the respective risks. In addition to key strategic issues, recent years have seen the performance of many projects with the help of which the management processes have been configured even more efficiently. As a result of these actions opportunities can be more rapidly used and risks better managed.

Controlling

The department provides a continuous flow of necessary information to all decision making entities. Controlling delivers information in particular to those staff members with responsibility for project management, team leaders and department heads as well as the management board and the executive committee. In addition to annual business plans a key task of controlling is to provide monthly reports for all divisions. These reports provide department heads with the basis, together with the management board, to develop all necessary short-term control measures. The executive committee is presented with the results on a quarterly basis.

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