1. Understanding Value for Money Audits A GENERAL OVERVIEW

2. What is Value for Money (VFM)?  Value for money relates to ECONOMY, EFFICIENCY & EFFECTIVENESS with which the audited entity uses its resources to realize its goals  “…examines the ability of government organizations to discharge their responsibilities (EFFECTIVENESS) and control their costs by ensuring that resources are managed at the lowest cost (ECONOMY) and that activities are organized efficiently (EFFICIENCY)…” – CPA Canada (Emphasis Mine)  Performance audit covers not only specific financial operations, but the full range of government activity including both organisational and administrative systems.

3. Origins  VFM auditing was introduced in the 1970s to meet the need for additional information.  In October 1977, the International Organization of Supreme Audit Institutions adopted the Lima Declaration of Guidelines on Auditing Precepts, which placed VFM audits on the same footing as financial audits or compliance audits.  VFM audits are, therefore, very important in measuring organisational performance.

4. Content  auditors must be satisfied that the subject matter is within the collective professional expertise of their team.  Non-accounting specialists are engaged in VFM audits  Consultations with independent experts in the field subject to the audit Primarily to direct the work, interpret the findings and evaluate the conclusions.  the auditor should agree on the objective of the engagement with the entity’s management  seek management’s acknowledgment of responsibility for the subject matter related to this objective.  ensure that suitable criteria exist

5. Report content  findings  conclusion (essential result of an audit)  recommendations intended to correct the weaknesses identified  audit objectives  evaluation criteria used  source Before issuing its report, the SAI invites the managers concerned to submit their comments, which are incorporated into the report.

6. Where does the PAC fit in?  Analysis of reports  Follow up on AG findings and recommendations  Institute remedial action and sanctions  Recommend mitigating controls for misappropriation  Recommend significant internal audit role to complement the external/statutory audit function  Identify areas where VFM audits should be done and institute the AG to include these in audit plan  ….

7. Examples of Value for Money Audits

8. Presenter Details Clive M. Munemo CA(Z), RPA(Z) Managing Consultant Clive and Associates (Zimbabwe) +263 773 022 673 clive@cliveandassociates.com clive.munemo1