Are National Audit Office “Value for Money” Audits Themselves Value for Money?

1276 Words Apr 6th, 2013 6 Pages
The National Audit Office (NAO) is responsible for the financial and “value for money” audits of central government expenditure, as well as other publicly related bodies. Although there is no single definition for what a value for money audit is, the most widely accepted definitions connect value for money audits with the review of the three E’s (Lecture 2, AC340 Lent Term, Liisa Kurunmakii):
• Economy – providing the intended service at the lowest cost possible, with regards to maintaining the quality of service
• Efficiency – gaining the maximum output from a given level of inputs
• Effectiveness – the extent to which these public bodies achieve their policy objectives

With this in mind, it is clear that in order for a “value for
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With this in mind, it can be argued that one of the VFM audit’s strengths is that it does take into account the effectiveness of the auditee in reaching their social objectives (as shown by the three E’s). The inherent difficulty for any public body is to balance effectiveness with efficiency and economy; the NAO must therefore take this into account when carrying out VFM audits, in order for the audits themselves to be of value.
Auditing the effectiveness of a public organisation is a difficult task in itself, however. What does effectiveness entail, and how does one measure it? You could argue that the effectiveness of the police force could be measured by looking at the ratio of number of crimes reported to the number of crimes solved. This seems to be in line with the police force’s social goals, so in theory seems an appropriate proxy for effectiveness. Yet it is also easy to see how this metric could be manipulated; where it is unlikely that a crime will be solved, the reporting of the crime may be ignored. The measure will give a false image of the efficacy of the police force in question, when

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