Value for Money Audits

Performance Auditing (Value for Money)


It is an independent, objective and reliable examination of whether government undertakings, Systems, operations, programmes, activities or organisations are operating in accordance with the principles of economy, efficiency and effectiveness and whether there is room for improvement.

Economy, efficiency and effectiveness

The principles of economy, efficiency and effectiveness can be defined as follows:

  • The principle of economy means minimising the costs of resources. The resources used should be available in due time, in and of appropriate quantity and quality and at the best price.
  • The principle of efficiency means getting the most from the available resources. It is concerned with the relationship between resources employed and outputs delivered in terms of quantity, quality and timing.
  • The principle of effectiveness concerns meeting the objectives set and achieving the intended results.

Objectives of performance auditing

The main objective of performance auditing is constructively to promote economical, effective and efficient governance. It also contributes to accountability and transparency. Performance auditing promotes Accountability by assisting those with governance and oversight responsibilities to improve performance. It does this by examining whether decisions by the legislature or the executive are efficiently and effectively prepared and implemented, and whether taxpayers or citizens have received value for money. It does not question the intentions and decisions of the legislature, but examines whether any shortcomings in the laws and regulations or their way of implementation have prevented the specified objectives from being achieved. Performance auditing focuses on areas in which it can add value for citizens and which have the greatest potential for improvement.  It provides constructive incentives for the responsible parties to take appropriate action.

Performance auditing promotes transparency by affording parliament, taxpayers and other sources of finance, those targeted by government policies and the media an insight into the management and outcomes of different government activities. It thereby contributes in a direct way to providing useful information to the citizen, while also serving as a basis for learning and improvements. In performance auditing, SAIs are free to decide, within their mandate, what, when and how to audit, and should not be restrained from publishing their findings

Benefits & Strategic Value of VFM audits

Improvement of public accountability and transparency through oversight into executive’s implementation of government programs and activities and reporting on how appropriated funds in MDAs have been utilized from the perspective of efficiency, economy and effectiveness.

Facilitation of decision-making by parliament, MDAs parties charged with responsibility of implementing and spending appropriated public funds.

  • Analyze policy and identify gaps in regulations and legislation affecting effective implementation of government programs that the legislature can follow-up on.
  • Promote elimination of waste in government MDAs through identifying duplication of efforts in implementation of government programs.
  • Analyze roles & responsibilities, functions and there by identify gaps affecting efficient and effective performance of MDAs, recommend changes,

Value for Money/ Performance Audit Process