Would the results have been different if a proper risk


Donald James, The property Managerat the College was awakened at 4:00 a.m. on a wet October morning.Earlier that night there was a heavy rain accompanied by lightning.It had caused a short circuit in one of the rooms on the Maledorm.

The voice on the other end belongedto a police officer, who explained that one of the pick-up trucksowned by the college was involved in an accident. It had driveninto a motor bike and the two persons on the bike were seriouslyinjured. The officer went on to explain that the pick-up driver wasdiscovered to have had a blood alcohol level well in excess oflegal limits. To make matters worse, the driver was operating thepick-up with a suspended driver's licence, a suspensionhanded down six months before.

The story is that the short circuitcaused a fire and two students were injured. One of the driversemployed to the college decided to rush the injured students to thehospital in the pick-up. The vehicle runs out of petrol just beforereaching a service station. With some assistance, the driver pushedthe vehicle to the service station. In his haste to get thestudents to the hospital he had driven into a bike that was parkedoff the road as the pillion rider was getting on.

As James hanged up the phone,these thoughts ran through his mind:

1. How did we let this man drive the College vehicles?

2. Was the Collegeinsured for such a loss?

3. What are theneeds of the victim's families?

4. Did the College's lack of a driver training programme contribute tothe accident?

5. Would the results have been different if a proper risk management programme was in place?

6. What are the public relations implications for the college?

7. What could wehave done differently?

If you were recruited as a riskmanager for the college how would you assist Mr. James in answering the questions that ran through his mind and how would you advise him?

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Accounting Basics: Would the results have been different if a proper risk
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