ACCA Applied Skills · Performance Management · Specific performance analysis issues in not-for-profit organisations and the public sector
A school's 'value for money' review notes that expenditure per pupil fell 5% while exam pass rates were unchanged and pupil numbers rose. Which combination of the 3Es is most directly indicated?
Lower expenditure per pupil with unchanged pass rates shows improved efficiency, since resources are used to serve more pupils, while effectiveness is maintained because the results achieved have not changed. Nothing is said about input prices, so economy is not shown.
- AImproved efficiency, with effectiveness maintainedCorrect
- BImproved economy only, with effectiveness falling
- CReduced efficiency, with effectiveness maintained
- DImproved effectiveness, with efficiency falling
Explanation
Lower cost per pupil for the same output of results indicates better efficiency (more output per unit of input). Unchanged pass rates mean effectiveness was maintained. Nothing is stated about input prices, so economy cannot be concluded.
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