“Working on London 2012, the busier things get, the more you tend to lose perspective on what it is you’re actually involved with,” says Mary Hardy, speaking to A&R two weeks before the London 2012 Olympic and Paralympic Games opening ceremony. “But then, when I watch the progress of the Olympic torch or, as we occasionally get to do, visit the venues during test events, I’m reminded of just how exciting the whole thing is and how incredible it is to be a part of it.”
Mary Hardy was reconsidering her position at Transport for London (TfL) when she was headhunted for the role of head of risk assurance at the London Organising Committee of the Olympic and Paralympic Games (LOCOG). The position would last the lifetime of the games and up until March 2013, owing to the ongoing work involved in the insurance programme and the dissolution of the business.
“Aside from the fact that it was clearly a once-in-lifetime-opportunity, one of the things that appealed to me about this position was its fixed term,” she explains. “I had been considering moving on from TfL, having been there for some time, but was reluctant to commit to another four or five years as a head of internal audit.”
Since joining LOCOG in November 2009, Hardy has worked with a team of two internal auditors and a senior manager at KPMG, to which she co-sources work depending on the volume and specialisations required at the time. Now that her pre-games plan is complete, the internal audit team, together with a financial control department, are set to conduct compliance-type audits throughout the games, before tackling the audit work associated with the early stages of the post-games dissolution.
“I joined LOCOG when it was still a fairly small organisation of about 350 people,” Hardy recalls. “There hadn’t been much internal audit work done because there wasn’t much to audit. My first task was to write an audit plan for the lifetime of the games, from 1 April 2010 to the end of 2012. My colleague at KPMG and I tackled this in a fairly traditional way. There was only a skeleton risk management process in place at the time, as it was such a small organisation, so we based our plan on business strategies that were being updated, discussions with senior management and our own expertise.”
Was it difficult to plan assurance for a temporary event of this scale? Not really, says Hardy. “It was clear what the main risks would be: will we raise enough money to pay for the event? How robust will the transport and security provisions be? And how will LOCOG cope with the enormous explosion and the subsequent disappearance in the number of people working for it?”
As she explains, LOCOG has grown at an incredible rate. By the opening ceremony, the best part of 200,000 people will be working for the games – a mixture of paid staff, contractors and volunteers – from only about 5,000 at the end of March.
“There are obvious risks concerning how you bring all these people on board, train them and deal with all the other employment processes, both during the games and afterwards, when there will be a mass exodus,” Hardy says.
Combating fraud is also understandably high on LOCOG’s agenda. While counterfeit tickets and fake merchandise are dealt with by a separate brand protection team within the legal function, which works with the Metropolitan Police’s Operation Podium, corporate fraud falls within Hardy’s remit.
“Aside from the potential damage to the reputation of LOCOG and the nation, we can’t afford to lose money through fraudulent activities,” she says. “That’s why, right from the outset, we put in place ethical compliance policies, speak-up procedures and confidential hotlines. Everyone who works for LOCOG also has to pass an e-module on ethical compliance as part of their induction process and then must refresh that every 12 months.”
LOCOG has run fraud awareness workshops in association with Operation Podium for new recruits in key departments such as procurement and HR. The finance team has also attended fraud workshops run by the Bank of England.
“We’ve worked very hard to put anti-fraud measures in place, but no more or less than I would expect from any large organisation with a reputation and budget to protect,” Hardy says.
Looking back at the original audit plan, Hardy is satisfied that her team got the scope right. “While the way that we have delivered audits has changed quite a bit since the start, the content of that plan has altered very little, aside from a few tweaks as LOCOG has evolved.”
She had also correctly anticipated that delivering the plan would become increasingly difficult as the games approached, as people found themselves with less and less time to devote to the audit process. There would also be major areas of assurance that were not the direct responsibility of LOCOG and Hardy’s internal audit team. Transport, which is being delivered primarily by TfL, is the obvious example.
“If something were to go wrong, it could represent a huge reputational issue for LOCOG, the games and the UK,” Hardy says. “However, you can’t audit reputation risk; you simply have to put adequate processes in place to ensure that matters don’t turn into a reputational problem. You also have to understand and rely on what others, such as TfL, are doing to manage risks on your behalf and theirs.”
To help the audit committee understand what assurance falls within LOCOG’s remit, Hardy designed an assurance map detailing what the risks are, who is managing these and what assurance is being provided.
Start to finish
As final jobs before retirement go, Hardy’s can certainly be considered a climactic flourish to an impressive career. Having cut her teeth at Ernst & Young, where she stayed for 19 years and became a partner, she joined Guinness in 1996, a year before it merged with Grand Metropolitan to form Diageo.
“As director of group audit and assurance, my task was to merge together the audit functions of these two companies, which was a challenge because they were scattered around the world,” Hardy says. “I also developed and implemented the risk management processes that were necessary to comply with the Turnbull report’s requirements, which were new at that time.”
Hardy faced a comparable situation when she joined TfL in 2001, only a year after it had been established. “In effect, we were starting something from scratch,” she says. “Then, when London Underground merged with TfL in 2003, I once again had to merge two audit functions to produce something that worked for TfL, which was quite a different animal from London Underground. I’m proud of my achievements in both of these roles, as I was responsible for overseeing quite radical changes in the internal audit departments to create something new and effective.”
By the time this magazine goes to press, the Olympics will finally be over and LOCOG and Team GB should be breathing a collective sigh after a job well done. For Hardy and her internal audit team, the work continues, but the weight of responsibility should have lifted. At this point she can perhaps reflect on the unique and essential role she played in the London 2012 spectacle.