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4 Deficiencies of Value for Money Audit

Value for Money audit is a comprehensive examination that provides an objective and constructive assessment of the extent to which financial, human and physical resources are managed with due regard to economy, efficiency, and effectiveness; and accountability relationships are served.

Deficiencies of Value for Money Audit

i.     There exist no universal measures for outputs

E.g the output of a customer care executive in a call centre can be measured by the number of calls attended by him or her.  However, each call can be of different difficulty and take different amounts of time.  However, the output of a machine is likely to be uniform and will be in terms of the units manufactured.

ii.    Objectives of audit and measure of the efficiency vary with the type of work being audited

E.g the objective of a customer care executive is to satisfy the queries of a customer in the minimum time.  Hence, their efficiency would be determined on that basis.  However, the objective of a machine is to produce the maximum output with minimum resources.

iii.     Quality might be sacrificed to achieve economy and efficiency

The objective of VFM audits is to achieve economy, efficiency and effectiveness.  Sometimes efficiency is sacrificed to achieve economy. For example, the customer care executive may end the call without giving adequate answers to the queries posed by the customer.  The servicing of the machine may be delayed to avid the machine’s downtime.

iv.     It is not easy to measure the effectiveness

For example,  the effectiveness of a  customer care executive will improve if they give detailed replies to the queries of the customers. However, it would result in low call turnover and other customers would have to wait for a long time before their phone call is attended. Therefore, the measurement of the effectiveness of this function is subjective, and not easy.

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