The General Manager,
This is a report on my proposed Fire Authority; it is generated by skillfully going through the Financial Statements of Greater Manchester Fire Authority, identifying and assessing the authorized limit and operational boundary, calculating the safety margin of the operational boundary to the authorized limit as well as the identification of six risks categories facing FRS, their impacts to the FRS, and how they have been recognized in the financial statements.
Regards
Characteristics of the Proposed FRS
The FRS that I shall establish would be operating both in urban and rural areas; it would be excellent in service provision and ensuring that life and property are highly protected in an effective, reliable, and efficient manner. There would be technological advancement that would address application protocols, good staffing techniques, public policy participation, and professional development. The FRS would protect citizens from damages of fire, environmental crisis, and natural crisis.
There would be enhanced awareness of fire prevention through public education and building effective partnerships with other agencies so as to bring strong collaboration and cooperation. At GMFRS, knowledge is highly improved any many forms, its entry to a Knowledge Transfer Partnership (KTP) in 2008, is seen as a way of helping the company to improve on its operations i.e. technology, better use of knowledge, and required skills. There are challenges that still face GMFRS, ranging from unwanted fire signals, faulty equipment, and poor pension allocation.
The Risk areas facing FRS
According to Wachowicz, John, and James, there are several risks that face companies in their daily endeavors, in pursuit of trying to establish this FRS; there is a high need to outline the risks that would face its operations (330).
The Risks that faces FRS are
Health risk
The Fire Rescue Service industry is one of the topmost companies that have High Health risks in its daily operations. Fire fighting is a health-threatening job to the employees, every time a firefighter responds to fire breakout, there is a high risk faced, they might be burnt in the process of trying to extinguish the fire, there are some long term damaging effects concerning their health and life.
Financial Risks/ Economic
There could be situations of non-payment by customers. Any business enterprise must be provided with capital. Failure of finances could lead to failure of a start-up of an organization, there might not be investors willing to sponsor FRS, the competitors might not readily admit the FRS’s operations for fear of being outdone and might go as far as convincing those who might readily be willing to invest in the FRS Company. Typically, the goals that make investors finance a business are; to secure investments that have a low amount of risks. In a low-risk situation, investors would earn a return. Everybody in society wants to benefit from their investments, thus, would properly assess any degree of risks associated with their intended investments. This might pose a danger for FRS to start its services. At GMFRS, the management team embarked on extensive consultation in order to recognize the implication of the global financial crisis and encouraged the staff to design a good fire and Rescue Service of the future, in the best way possible (Guthrie 267).
Operational Risks
April admits that in the daily operation of a Company entails processes, people, and systems, there needs to be ever well coordination among these players. The equipment used (fire apparatus, fire engines, fire trucks, as well as fire appliances) must be up to date especially in fire fighting scenarios, there should not be faulty in any way. Employees in fire-fighting companies might lack the desired skills for the job; this in itself might heavily cause danger to the company (475).
Processes that are always followed in an organization must be hard to reckon with, there might be a bureaucracy towards how to inform a company on issues relating to the fire break out, and who is to release the firefighters as well as the equipment to places that already have fire breakout, in such situations, the operation might be so hard for a fire company. Despite all precautions taken at GMFRS, unwanted fire signals still occur, this causes confusion in the daily operation of the company, making the firefighters attend even to things that actually do not matter, trying as hard as possible to reach places where they have been summoned, only to find that there is no such fire, this brings confusion in the company.
Environmental Risks
The environment in which we stay is so unique in everything as well as the risks that are associated with it. In our environment, there are risks such as disasters, accidents, deliberate assaults, natural events that cause pollution in the environment. There is a scarcity of resources in our society today, hence leading to substantial pollution. In the fire fighting industry, for instance, there must be the storage of aerosols and LPG (liquefied petroleum gas), all these are risks to the environment as they are stored on-site, bringing a risk of serious fire to employees on-site and even people in the surrounding areas (Arnold 624).
GMRS operates in an environment that continually changes due to external pressures to the modern world. GMRS operates in this way to bring cooperation in the ever-changing society. The operations recognize that all equipment for fire fighting is well stored and pollution is minimized.
Employee risk
There might be the risk of being not able to maintain a sufficient number of employees, get the best skills from the existing employees, and maintain their safety always in their daily cause of operations. Employees could not be readily able to follow the prescribed code of conduct, it’s them who many times would not wish to have changed in the organization, when all these happen, then they bring an enormous danger to the company, hence the risk that they are associated with. To ensure the continuity of the GMRS, employee development is a vital concern as the employees are continually trained to improve on the skills of the company, and truly address emergencies faced by the community that they serve; this brings an atmosphere of calm operation at the GMRS Company.
Political / Legal risks
Politics entail the allocation of scarce resources to people/ businesses that truly matter, in politics, the government would influence what business will take place, how, when, and where. Thus, there could be a possibility of interference with the establishment of the fire rescue service at some places. The people might be out in the rural areas not to accept a fire station in the area for several reasons, all these are political risks associated with business start-ups. The legal risk is associated with the possibility of other parties not meeting their contractual obligation, and all these could be politically influenced so that a business can fail. At GMFRS, the local MP demanded to meet with the chancellor, this was in response to the media information that several jobs would be lost, and some services would be cut. This was political in a way; the government promised a 4-year settlement but only gave a 2-year settlement, so there was no real information whether it was actually backloaded.
How my FRS has accommodated the aforementioned Risks
In order to start an FRS that is free from the aforementioned risk, there are several measures to ensure that it is risk-free. To implement the FRS there has been a thorough survey done ranging from water supply studies, Code consulting, inspection and testing services, emergency planning, preparedness, Master planning, program development, drills, training, and foam operations so that there are no risks. Therefore, the FRS would pursue the following: To address the health risk in an effective, efficient and reliable way, there shall be no illegal storage of large quantities of highly flammable aerosols, large amounts of LPG (liquefied petroleum gas), for such acts might lead to fire breakout and might lead to severe injuries of the employees and people in the surrounding areas.
On the financial and economic risk side, a well-organized procedure of ensuring that the customers pay their dues is in place, to customers who shall not settle their dues as they come, legal action shall be taken against them. There is a complete order on how the capital of the FRS would be generated, and all the potential investors have been approached and are willing to ensure that FRS Company is started especially in the rural areas, where fire breakout has been a significant problem. There is a well-laid down return on the investors who will be willing to buy the company shares. To ensure the smooth operation of the company, there shall be well-coordinated processes, systems, and people. Technology will be up to date; the equipment that shall be used in the company like the fire apparatus, fire engines, fire trucks, and fire appliances shall be regularly checked so that there are no faulty machines of operations. Employees at FRS shall be regularly taught different and emerging skills for fire operations. There shall be a well-established process of information flow in the company.
In order for the FRS to operate in a risk-free environment, there should be such risks preparedness, so that when they happen, FRS can not close down, but can strive to complete operations on a daily basis, the pollution in the environment can be extremely minimized, the aerosols and the LPG (liquid petroleum gas) would not be stored in large quantities and for a long time without changing the content, when there is fire breakout and there is a large amount of the gas, the fire would be so much and hence would cause extreme damage to the environment, when there is an outbreak of such fire, life might be lost, employees might be injured, and thus such measures of ensuring that people stay in a risk-free environment shall be taken into account. For FRS to remain competitive in the market, it must have skilled, respectful, ready to work and effective employees. There must be a sufficient number of employees, with few employees in a fire rescue company; there is no job that can go on well. To overpower any risk associated with Employees, the FRS would ensure that those employed in the company are of the right skills so required, are of the good number, follow the code of conduct, and are able to embrace any change in the daily operation of the company. As such, there would be no danger posed to the company by the employees.
There are situations when some players in the industry might fail to comply to meet their contractual obligations. The FRS has fully taken this into consideration, and shall fully ensure that the terms of the contract are respected and understood by everyone, the suppliers, employees, investors, and the customers. In order not to face serious rejection of putting up the company at the outlined location, the FRS has talked with the local leaders and has fully engaged the people on the ground of the importance of building up the company at the prescribed location, this is a measure towards ensuring that there shall be no opposing people during the building up of the company.
There shall be the use of modern fire engines. A modern fire engine is a multipurpose vehicle that carries professionals and equipment for a wide range of fire fighting and rescue tasks. This would be unlike the GMFRS which does not have modern fire engines. This FRS shall work in close consultation with other emergency response agencies, for instance, the police departments, the local and state authorities. There shall be the provision of emergency medical services as the first aid to the fire victims. All the fire fighting skills would be widely taught to everybody in the country, the firefighters themselves as well as the people in offices or the families at home. This will highly help them know what to do in the event of a fire breakout. The employees would be required to have skills at hand, ranging from size-up, and extinguishing, ventilation, salvage, overhaul, search and rescue. There shall be clear governance in the FRS, this would be achieved through clear roles and responsibilities of the players (employees, management, and customers), real enforcement of role definitions, and synchronizing contractual obligation to different stakeholders, the building of consumer trust, employee loyalty and keeping of their data, there shall be a quality of service by providing a 24/7/365 service to customers.
The operational Boundary for the period ended 31.3.2008
For GMFRS = ÂŁ11.698M = Operational Boundary
For GMFRS Authorized limit = ÂŁ12.5M
So the proportion of authorized limit used = operational boundary/authorized limit = 11.698/12.5 = 0.935
Therefore the safety margin = 100% – 93.5% = 6.5%
The recommended safety margin is 5%
Therefore GMFRS operates within recommended safety margins
If the number at 6.5% is less than 5 – FRS is not operating in recommended limits.
How operational boundary and authorized limits are set.
In their definition, Russell and Dewing say that “an operational boundary defines the scope of both direct and indirect emissions within an organizational boundary; it is established as soon as an organization determines its organizational boundary”. In pursuit of organizations reporting their gas emissions, the organizational boundary must be set at the onset. It will justify the legal composition of the company and how it is directly involved in the control of emissions. It justifies whether the operation of the company is totally controlled at the head office or per unit of operation, and also determines the financial control of the company (how the company controls its assets). After the establishment of an operational boundary, it has to be put into operation in a uniform manner in all the departments of the organization (27).
Works Cited
Arnold, Glen. Corporate financial management. London: Financial Times Prentice Hall, 2008.
Atrill, Peter. Financial Management for Decision Makers. University of Essex: FT Prentice Hall, 2008.
Guthrie, James. International public financial management reform: progress, contradictions, and challenges. University of Sydney: IAP, 2005.
Russell, Peter and Ian, Dewing. The Role of Principles and Practices of Financial Management in the Governance of With-Profits UK Life Insurers. Oxford: Butterworth-Heinemann, 2009.
Wachowicz, et.al. Fundamentals of financial management. London: Financial Times/Prentice Hall, 2008.