2. Organisational Effectiveness

McKinsey 7S Model

Value for Money

Context of VFM Accountability - the need to demonstrate

achievement and provide account ( reliable and meaningful) of how it came about

Audit is a means of demonstrating accountability

VFM is a part of the audit framework in the Public Sector Formalised in the the Comptroller & Auditor

General (Amendment) Act 1993.

Concepts in VFM…….

Inputs Activities Outputs Outcomes (resources) (processes) (provision)

(impacts)

Economy Efficiency Effectiveness

Economy Focus = input ‘acquiring resource of appropriate quality

and providing service to appropriate standard at lowest cost’ CIPFA

IP = only concern €, hours, materials, Relative measure - compare to….. Limited use on its own as ..no question of

whether objective achieved or how….

Efficiency

Focus = process ‘doing things well’ ‘doing it right’Relationship between services/good

produced and resources used to produce them

Efficiency = Max OP for given IPMin IP for given OP

Effectiveness Focus = output / outcome ‘doing the right thing’ Effectiveness = key On its own ltd as you can do most things if

you through enough time and money at it.. ‘measures the extent to which OP from a

defined activity achieves the desired result or policy objectives of the organisation’

presupposes that policy objectives can be defined with precision rather than in broad conceptual terms

…effectiveness... Raises the issue that there are two types of

objective output = service produced, result of activity

- intermediate, quantitative, measurable an d appropriate to objectives.

outcome = impact, effects OP have in terms of achieving policy objectives, ultimate objective is qualitative, subjective

Stakeholders

Body

Media

Members

Pressure Groups

Analysts

Citizens

Local LegislatureStaff