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In risk management watch list items depend upon which fund?

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Pradeepta kumar Guin Bhubaneswar, Or, India
Actively accepted risks are covered under contingency fund. Passively accepted risks are covered by  management reserve as they are called workarounds. Watch list items fall under which category and depend upon contingency  or management reserve?
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Pradeepta -

A watch list item is usually a low severity risk OR a higher severity one which lacks any meaningful response strategy. In general, contingency reserves are there to cover known-unknowns which includes items on the watch list, but if you had a very high impact risk which was on a watch list because it was believed to have an extremely low likelihood of realization then it is possible that a PM might need to seek management reserve access if it is realized as the expected monetary value for that risk which would have been allocated in the contingency reserves might be insufficient to cover the realized actual impact.

Or in short, it depends :-)

Kiron
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1 reply by Pradeepta kumar Guin
Oct 17, 2024 4:16 AM
Pradeepta kumar Guin
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Thanks for reply. Noted and understood.
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Rami Kaibni
Community Champion
Senior Projects Manager | Field & Marten Associates New Westminster, British Columbia, Canada
Pradeepta, in construction, we usually allocate contigency reserve for majority of the items on the watch list but some might be covered by management reservse so like Kiron mentioned, I would say it depends!
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1 reply by Pradeepta kumar Guin
Oct 17, 2024 4:17 AM
Pradeepta kumar Guin
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Ok got it. Thanks for clarifying 👍
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Pradeepta kumar Guin Bhubaneswar, Or, India
Oct 16, 2024 7:23 AM
Replying to Kiron Bondale
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Pradeepta -

A watch list item is usually a low severity risk OR a higher severity one which lacks any meaningful response strategy. In general, contingency reserves are there to cover known-unknowns which includes items on the watch list, but if you had a very high impact risk which was on a watch list because it was believed to have an extremely low likelihood of realization then it is possible that a PM might need to seek management reserve access if it is realized as the expected monetary value for that risk which would have been allocated in the contingency reserves might be insufficient to cover the realized actual impact.

Or in short, it depends :-)

Kiron
Thanks for reply. Noted and understood.
avatar
Pradeepta kumar Guin Bhubaneswar, Or, India
Oct 16, 2024 10:57 AM
Replying to Rami Kaibni
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Pradeepta, in construction, we usually allocate contigency reserve for majority of the items on the watch list but some might be covered by management reservse so like Kiron mentioned, I would say it depends!
Ok got it. Thanks for clarifying 👍

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