ACCA Strategic Professional · Advanced Performance Management · Performance optimisation in specific contexts
A public sports agency receives a $2,000,000 grant to run a youth fitness programme. It budgets 10,000 participant-sessions. Actual spend is $1,900,000 for 9,500 sessions, and independent measurement shows 30% of participants reached the target fitness level against a target of 40%. Which statement correctly assesses the programme?
Cost per session is exactly on budget at $200, so economy and efficiency in unit terms are as planned, but effectiveness is below target because only 30% of participants reached the fitness level against a 40% target. Lower total spend and fewer sessions do not signal inefficiency here.
- AEconomy and efficiency are on budget in cost per session, but effectiveness is below targetCorrect
- BEfficiency is adverse because total sessions fell below budget
- CEffectiveness is favourable because spending was below the grant
- DEconomy is adverse because fewer sessions were delivered
Explanation
Budgeted cost per session is $200 ($2,000,000/10,000) and actual is $200 ($1,900,000/9,500), so unit cost and efficiency are as planned. The fitness outcome of 30% against 40% shows effectiveness is below target. Option B wrongly judges efficiency on volume alone rather than the ratio of cost to output.
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