eBusiness Weekly
Retired Major Silibaziso Zhou
In a bid to ensure transparency, accountability and efficiency in the utilisation of public funds, the call for Value for Money (VFM) audits has become increasingly vital within the public sector.
The implementation of VFM audits serves as a mechanism to evaluate whether public resources are being utilised in the most effective and efficient manner possible.
This article will provide an understanding of value for money and suggest ways to enforce value for money in the public sector of Zimbabwe.
Understanding value for money
Value for Money in the public sector aims at achieving optimal outcomes through cost-effective resource allocation. It encompasses the principles of economy (acquiring resources at the best price without compromising quality), efficiency (maximising outcomes from inputs) and effectiveness (achieving desired impacts using available resources).
Value for Money (VFM) in the public sector context refers to the optimal use of resources to achieve the desired outcomes in a cost-effective and efficient manner. It involves assessing whether public funds are being utilised to their fullest potential to deliver the expected benefits and outcomes.
There are three elements of value for money.
Economy: Ensuring that resources are acquired at the best possible price while maintaining quality.
Efficiency: Maximising the output or outcomes achieved from a given level of inputs.
Effectiveness: Achieving the desired outcomes and impacts through the best use of available resources.
Importance of value for money in Zimbabwe
Zimbabwe faces challenges of limited resources and historical inefficiencies, making VFM audits imperative for ensuring accountability and improved service delivery.
The Government has taken steps, as outlined in the Public Finance Management Act (2021), to provide guidelines on VFM audits to enhance financial stewardship and regain public trust.
The World Bank (2018) reaffirms the significance of VFM audits in assessing the delivery of expected outcomes and benefits, guiding resource allocation decisions and budgeting processes.
By evaluating and enhancing the economy, efficiency and effectiveness of public spending, VFM audits contribute to bolstering governance and public trust in financial management practices.
VFM audits play a crucial role in enhancing governance within the public sector. By evaluating the economy, efficiency and effectiveness of public spending, these audits contribute to enhancing public trust and confidence in the government’s financial management practices.
It is imperative for public sector organisations to embrace the culture of VFM audits as a means to demonstrate their commitment to responsible financial stewardship.
By conducting regular audits and implementing recommendations, government entities can optimise resource allocation, drive performance improvements and ultimately deliver better value for taxpayers’ money.
As stakeholders increasingly demand greater transparency and accountability from the public sector, the requirement for VFM audits is set to become even more crucial in the years to come.
Embracing VFM audits not only safeguards public funds but also paves the way for a more efficient and effective delivery of public services.
Strategies to enforce value for money audit in Zimbabwe
In Zimbabwe, enforcing Value for Money (VFM) practices in the public sector requires a comprehensive approach that involves the commitment of stakeholders at various levels. Here are some strategies that can be employed to enforce VFM in Zimbabwe:
Establish clear VFM guidelines: The government should develop and disseminate clear guidelines and policies outlining the principles and processes for assessing VFM in public sector spending.
Strengthen oversight and accountability: Enhance the role of oversight bodies such as the Auditor General’s Office and parliamentary committees in monitoring and evaluating public expenditure to ensure compliance with VFM principles.
Capacity building and training: Provide training and capacity-building programmes for public sector officials on VFM concepts, practices and tools to enhance their understanding and implementation of efficient resource management.
Regular VFM audits: Conduct regular VFM audits across government departments and agencies to assess the economy, efficiency and effectiveness of public spending. Implement audit recommendations to drive performance improvements.
Performance targets and monitoring: Set performance targets linked to VFM objectives and establish mechanisms for monitoring and evaluating the achievement of these targets to ensure accountability and improve decision-making.
Promote transparency and information sharing: Enhance transparency in public financial management by making information on budget allocations, expenditures and outcomes readily accessible to the public. Encourage citizen engagement and participation in monitoring VFM.
Incentivise VFM practices: Implement reward mechanisms for departments or agencies that demonstrate exceptional VFM practices and outcomes, encouraging a culture of efficiency and effectiveness in public spending.
Utilise technology: Embrace technology solutions such as financial management systems, data analytics and performance monitoring tools to streamline processes, enhance reporting capabilities and facilitate better decision-making based on VFM principles.
Engage external stakeholders: Collaborate with civil society organisations, academia, and the private sector to provide independent assessments of VFM practices, offer recommendations for improvement and promote good governance in public expenditure management.
Periodic review and evaluation: Conduct periodic reviews and evaluations of VFM enforcement strategies to identify areas for improvement, update policies and guidelines in line with international best practices and ensure sustained commitment to VFM principles.
By implementing these strategies and fostering a culture of accountability, transparency and efficiency in public spending, Zimbabwe can effectively enforce Value for Money practices in the public sector, leading to improved service delivery, enhanced governance and better utilisation of resources for the benefit of its citizens.
The mandate for Value for Money audits in the public sector is a necessary step towards fostering a culture of accountability, transparency and efficiency in the management of public resources.
By prioritising VFM audits, government entities can enhance financial governance practices, drive performance improvements and ultimately deliver better value for taxpayers’ money.
Rtd Major Silibaziso Zhou is a senior lecturer at Great Zimbabwe University and has the following academic achievements: (PAAB, FACCA, FCGI, MBA, MCOM ACC.B.TECH ACC &, FORENSIC AUDITOR
