QUALITY MANAGEMENT SYSTEM

RISK AND OPPORTUNITY ASSESSMENT PROCEDURE

Code : DdO-QP-06 Revision No. : 1 Effectivity: 1 October 2021 Page: 1 of 7

1.0 PURPOSE

This document serves as a guide for the Provincial Local Government of

Davao de Oro in planning for risks and opportunities that result from internal
and external challenges, as well as the requirements, needs, and expectations
of interested parties. For this:

a) give assurance that the quality management system can achieve its
intended result(s);
b) enhance desirable effects;
c) prevent or reduce undesired effects; and
d) achieve improvement in the service delivery of the province.

2.0 SCOPE
This procedure shall apply to the PLGU-DdO-Quality Management System
process on the actions to address risk and opportunities.

3.0 DEFINITION OF TERMS

3.1 Interested Party - a person or party that has an interest in a company,

and they can have an effect or be affected by the company’s business
strategy.

3.2 Context of the organisation - All of the internal and external issues that
affect the ability of the QMS to achieve intended outcomes / results.

3.3 Issue - Some fact, situation or circumstance that is observed to exist or

happen in the business environment of the organisation.
NOTE: Issues can be internal or external to the organisation

3.4 Uncertainty - The intrinsic (naturally occurring, inherent) variability of an

issue in the organisation’s environment (also called “intrinsic
uncertainty”); or lack of knowledge and that therefore can be reduced by
gathering more data, by refining models, improving sampling techniques,
etc. (also called “epistemic uncertainty”)

3.5 Risk - Adverse effect(s) of uncertainty to the intended outcomes of the

QMS caused by an issue(s) in the organisation’s business environment.

3.6 Opportunity - Beneficial effect(s) of uncertainty to the intended

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 QUALITY MANAGEMENT SYSTEM
RISK AND OPPORTUNITY ASSESSMENT PROCEDURE

Code : DdO-QP-06 Revision No. : 1 Effectivity: 1 October 2021 Page: 2 of 7

outcomes of the QMS caused by an issue(s) in the organisation’s

business environment

3.7 Impact of Rating – Measures the extent of a deviation (positive and

negative) from a certain expected result of the QMS caused by an
issue(s) in the organisation’s business environment

3.8 Likelihood Rating - Measures the probability of occurrence of a

deviation (positive and negative) from a certain expected result of the
QMS caused by an issue(s) in the organisation’s business environment

3.9 Risk/Opportunity Rating - An indicator of the risk priority

3.10 Control - Actions to reduce the Risk Level or enhance the Opportunity
Level of a Risk or Opportunity, respectively.

3.11 Action Priority - Measures whether the risk should be treated or not;
whether opportunity should be pursued or not.

3.12 Action Plan- Plan of activities that will prevent the occurrence of the risk
or that will maximize the benefits of the opportunity.

3.13 Timeline - Period covered that the action plan shall be implemented.

3.14 Audit Finding - Result of the evaluation of the collected audit evidence
against audit criteria

3.15 Conformity - Fulfillment of a requirement

3.16 Nonconformity (NC) - A non-fulfillment of a requirement

3.17 Opportunity for Improvement (OFI) - A situation or process that may

lead to potential nonconformity.

3.18 Corrective Action (CA) - Action taken to eliminate the cause of a

detected nonconformity or other undesirable situation to prevent its
recurrence.

3.19 Request for Action (RFA) - A tool/form used to record the audit findings
and the corresponding root cause analysis and appropriate actions taken
to address it.

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RISK AND OPPORTUNITY ASSESSMENT PROCEDURE

Code : DdO-QP-06 Revision No. : 1 Effectivity: 1 October 2021 Page: 3 of 7

3.20 Risk Management Team- The Risk Management Team oversee the
monitoring of the Risk and Opportunities identified.

3.21 IQA Team - The IQA Team formed to oversee the IQA implementation.

4.0 PROCEDURE DETAILS

Ref.
Key Activities Responsible
No.

5.1 Determine Internal and Internal and External Issues shall be Process
External Issues determined using the SWOT Owner
Analysis
5.2 Identify risks and ● The following shall be used as Process
opportunities inputs for determining risks and Owner
opportunities:
o analysis of external and
internal issues;
o the strategic direction of
the PLGU-DDO;
o relevant interested
parties and their
requirements
● Determine the effect of internal
or external issues on the QMS’
intended results (i.e., needs and
expectations of Relevant
Interested Parties, Quality
Objectives and the Quality
Policy).
● Effects of issues that are
negative deviations from the
intended results shall be
categorized as Risks.
● Effects of issues that are
positive deviations from the
intended results shall be
categorized as Opportunities.
5.3 Determine Current Current Controls shall be those Process
Controls controls that are established, Owner
implemented and maintained to

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address the Risk or Opportunity

5.4 Assess current Risk or ● Comprehend the nature of risk and Process
Opportunity Level opportunities Owner
● Determine the potential impact and
likelihood of the Risk / Opportunity
whilst taking into account the effect
of the Current Control
● Assign Impact and Likelihood
Scores following Criteria for Impact
and Likelihood.
5.3 Determine Risk / Risk / Opportunity Rating shall be Process
Opportunity Rating determined by obtaining the product of Owner
the Likelihood and Impact Scores
5.4 Determine Action Plans ● Determine the need for action Process
based on the Risk Rating Matrix Owner
and the Criterion for Action.
● Modify the Risk / Opportunity by
implementing appropriate Action
Plans.
o Action Plans to address
risks (a.k.a. Risk
Treatment) shall be able
to reduce the Risk Level
to “Low”
o Action Plans to address
opportunities shall be
able to enhance the
positive effects of the
Issue evidenced by an
increase in the Risk
Rating, as practicable.
● Determine Office / Unit Responsible
to implement the Action Plan
● Indicate the Timeline / Target Date
of completion of the Action Plan
5.5 Determine Target Risk / ● Determine the potential impact and Process
Opportunity Level likelihood whilst taking into account Owner
the effect of the Current Control
AND the Action Plan on the Risk /
Opportunity
● Assign Impact and Likelihood
Scores following Criteria for Impact
and Likelihood.
5.6 Implement Action Plans ● Action Plans related to Processes Process

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Code : DdO-QP-06 Revision No. : 1 Effectivity: 1 October 2021 Page: 5 of 7

shall be integrated into the Work Owner /

Instructions RMT
● Action Plans that are programmatic
(such as those of projects) shall be
implemented as part of the
Programs of Work.
5.7 Perform Re-assessment Perform a reassessment of the Risk Process
after completion of the Action Plan(s). Owner /
NOTE: Results of reassessments shall RMT
be presented during Management
Reviews

5.0 CRITERIA FOR IMPACT

Rate Risk (Negative Impact) Opportunity

Insignificant 1 Minimal (no customer complaint) No perceived value for

or no impact improvement and
sustainability

Minor 2 Minor impact (noticeable effect, Pursuing the opportunity

minor customer complaint) will slightly improve QMS
and sustainability

Significant 3 Moderate impact (customer Pursuing the opportunity

complaints resulting in claim) will considerably improve
QMS and sustainability

Major 4 Major impact (catastrophic, Pursuing the opportunity

recall, fatality, costly will highly improve QMS
compensation, legal action) and sustainability
alternatives available

Catastrophic 5 Major impact (catastrophic, Pursuing the opportunity

recall, fatality, costly will greatly improve QMS
compensation, legal action) no and sustainability
alternatives available

6.0 CRITERIA FOR LIKELIHOOD

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Rate Likelihood – Risk Likelihood - Opportunity

Rare 1 Not known to happen No chance of success within

the next 12 months

Low 2 Low occurrence of 1 x a year 1-25% chance of success

within the next 12 months

Medium 3 Known to happen, occurrence of 1 26-50% of success within the

per quarter next 12 months

High 4 Very likely to happen, occurrence of 51-75% of success within the

more than 1 time per quarter next 12 months

Very 5 Highly likely to happen, occurrence >75% success within the next
High of 1 time per month. 12 months

7.0 RISK RATING MATRIX

L Rare 1 2 3 4 5
I
Low 2 4 6 8 10
K
E Medium 3 6 9 12 15
L
I High 4 8 12 16 20
H
Very High 5 10 15 20 25
O
O Insignificant Minor Significant Major Catastrophic
D

IMPACT

8.0 CRITERION FOR ACTION

Risk/Opportunity PRIORITY MANAGEMENT’S DECISION
Rating
RISK OPPORTUNITY

10-25 HIGH Take immediate action Pursue the

to treat the risk opportunity

5-9 MEDIUM Take action to treat the Pursue the

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RISK AND OPPORTUNITY ASSESSMENT PROCEDURE

Code : DdO-QP-06 Revision No. : 1 Effectivity: 1 October 2021 Page: 7 of 7

risk as soon as opportunity

practicable

1-4 LOW No action required No action required

9.0 REFERENCES:
● PLGU-DdO Quality Management System Manual
● Quality Plans / Work Instruction

Prepared by:

JENES B. MINOZA
Risk Management Team Head
IQA Member

Approved:

LARA ZAPHIRE KRISTY N. BERMEJO, MPA

PHRMD Officer/
Quality Management Representative

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