Value for Money
In designing and implementing governmental projects, it is essential to promote Value for Money (VfM) so funds are used effectively and maximize the program’s contribution to outcomes. The following VfM strategy follows the United Kingdom’s Department for International Development (DFID)’s VfM approach in balancing the 3E’s of economy, efficiency, and effectiveness.
• Economy relates to the price of inputs;
• Efficiency relates to how well inputs are converted to the output of interest through transfers to beneficiaries;
• Effectiveness relates to how well outputs are converted to outcomes and impact.
It is imperative that a culture of value for money is promoted publicly. The public understanding and capability of recognizing the ‘Value for Money” of local government expenditure would strengthen public knowledge and thus empower them to exercise their rightful say over public finance management of LAs. An empowered public would pave the way for Social Accountability to emerge from grass-roots. A strong system of social accountability would drive local authorities towards efficiency, strengthen practices of accountability and transparency, while ensuring that tax money is returned to the citizen through quality service.