ACCA Strategic Professional · Strategic Business Leader · Audit and compliance
Brindle Council's internal audit reviewed its road maintenance contracts. Findings: the council paid market-leading prices competitively tendered (low cost), crews completed 20% more repairs per labour hour than last year, but residents' satisfaction with road quality fell and the number of potholes recurring within six months rose. Which conclusion is best supported under a value for money framework?
Economy and efficiency look satisfactory, but effectiveness is weak. Competitive tendering shows low input cost and more repairs per labour hour shows efficient output, yet falling resident satisfaction and recurring potholes show the intended outcome of durable, good-quality roads is not being achieved.
- AEconomy and efficiency appear satisfactory, but effectiveness is weak because intended outcomes are not being achievedCorrect
- BEconomy is weak, but efficiency and effectiveness are satisfactory
- CAll three Es are satisfactory because output per hour increased
- DOnly effectiveness is satisfactory because residents are still receiving repairs
Explanation
Competitive low prices indicate economy, and more repairs per labour hour indicate efficiency. Falling satisfaction and recurring potholes show the objective of durable, good roads is not being met, so effectiveness is weak. Higher output alone does not prove effectiveness.
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