PREVENTING ASSET LOSSES
State employees have an ethical and legal responsibility to protect
state assets in their custody and control. Often we focus on the major,
high cost property losses like building fires. But small property losses
occur more frequently and many of them are preventable! All losses are
not covered by insurance and can directly impact your budget. Even if
they are covered, your agency generally incurs a deductible of some
Steps for Loss Prevention
Learn from the past. Ask Risk Management for your agency's prior loss
experience. What types of losses have you experienced?
- Losses caused by:
- Persons. Such as: theft; vandalism; breakage; vehicle
collisions; fraud; embezzlement, pollution, arson.
- Acts of nature. Such as: fire; water leaks or seepage;
flood; wind; power interruption, landslide, mold growth.
- Errors and Omissions. Things done or not done that result
in a loss.
- Type of property lost or damaged:
- Vehicles, boats, aircraft.
- Buildings or other structures.
- Property: landscaping; parking lots, benches, signs.
- Building contents: office furnishings; computers; servers;
- Field Equipment: lap top computers; scientific equipment;
cameras; palm pilots.
- Cash and securities: negotiable notes; bonds; checks.
- Where are the losses coming from?
- Particular programs or activities: training, use by others
such as clients or the public; displays.
- Geographic locations: urban vs. rural; particular offices
- Category of user: employee or staff; volunteer; trainee,
client, student/intern, contractor or temporary service employee.
Then use incident analysis techniques to determine system issues. Investigations
gather and document the facts. The next step is to analyze the evidence.
This allows you to determine all the things that led up to the incident
or loss. Not to place fault or blame but to make improvements.
- Do you regularly investigate each property loss?
- Do you document facts and establish corrections or future
- What systems do you analyze?
- Do you follow-up to be sure improvements are implemented?
- Do you track and address repetitive losses?
Accountability for loss prevention. Do employees know what
they are supposed to do it? Do they know how? Do they get any feedback?
- Who is responsible to investigate losses, analyze causes and
- Do they know how to investigate, analyze and improve?
- Do they have the resources, authority and executive backing
to make needed changes?
- Who pays for the loss? Who pays for the improvements?
- How does your agency recognize good performance for loss prevention
Do you have specific programs to prevent asset losses? Your
immediate goal is to prevent loss frequency since you pay from the
first dollar of loss up to your deductible.
- Loss prevention is specific to the type of loss. Remember you reviewed your data earlier. For example;
Loss mitigation. Can you respond quickly to a minor problem
to prevent it from developing into a more costly loss? For example,
boarding up a broken window to prevent water damage to the interior
due to rain.
- Fire prevention: control ignition sources or fuel; suppression systems.
- Water Incursion: prevent leaks from roofs, windows, faucets, storage tanks, piping.
- Power Fluctuations: power conditioning, reliable sources.
- Theft and Vandalism: security protocols, background checks, tools to tie down or lock up equipment or property that is portable and easily stolen.
- Damage and Breakage: preventive maintenance, user instructions and training, familiarity with equipment.
- Exceptional items: special programs to protect one of a kind, fine art, historic properties, cash, securities.
- Vehicles: passenger cars, vans, trucks, specialty vehicles.
- Policies and procedures to guide and direct action.
- Effective, prompt reporting systems.
- Rapid response plans.
Contract, Warrantees and Agreements. These can be effective
tools to transfer risk and recover losses. Conversely, they could
make you responsible for someone else's negligence.
- Do you hold people responsible to prevent or pay for a loss?
- Do you require written agreements to protect vehicles, equipment
or buildings used by others?
- Do you follow requirements to be able to recover under warrantees?
- Do people know their authority to sign contracts or agreements?
- Are you able to recover losses from other funding sources,
such as grants?
Subrogating or Recovering Costs. Through this process Risk
Management can recover some of the loss from third parties who cause
loss. You will need to help us establish that the other party is at
- Who is responsible to recover losses? Is a person assigned
- Do you have a policy and procedures to guide recovery?
- How do you account for recoveries? How is the recovery used?
- Do you have procedures to preserve evidence or prove your
Risk Management can insure your assets and can assist you in preventing
losses, but each agency and state employee has a responsibility to protect
the assets under their control.