Question

Discuss why value for money audit is necessary

Answer 1

Value for money audit is an independent audit of a not for profit organization to access the effectiveness and efficiency of its utilization of funds. It focuses on organizational and management performance. Being subjected to value for money audit can sometimes be uncomfortable as it challenges the way in which activities are carried out and possibly the organizational culture.

The discipline of value for money reviews has several benefits for an organization. It facilitates and promotes better strategic and operational decision making, clarifies management responsibility and accountability, allows assessments of the achievement of objectives, promotes better use of resources, and highlights the importance of the customer or service user.

Value for money audit is necessary for curtailing extravagant expenditure by determining the geniuness of transactions at the lowest possible cost.