ExpertMedium2 marksMultiple Choice
ACCA · Question 26 · Performance measurement and control
Section B - Case 3: GlobalCare
GlobalCare is an international NGO focused on providing clean drinking water in developing nations.
One of GlobalCare's key performance indicators (KPIs) is 'Number of water wells drilled per $100,000 of funding'.
Under the 'Value for Money' framework, how should this KPI be classified?
Section B - Case 3: GlobalCare
GlobalCare is an international NGO focused on providing clean drinking water in developing nations.
One of GlobalCare's key performance indicators (KPIs) is 'Number of water wells drilled per $100,000 of funding'.
Under the 'Value for Money' framework, how should this KPI be classified?
Answer options:
A.
Economy
B.
Efficiency
C.
Effectiveness
D.
Equity
How to approach this question
Analyze the KPI: it compares an output (wells drilled) to an input (funding). This is the definition of efficiency.
Full Answer
B.Efficiency✓ Correct
Efficiency is the relationship between inputs and outputs. A KPI that measures how much output (wells) is generated from a specific amount of input (money) is an efficiency measure. Economy would just look at the cost of the inputs, while Effectiveness would look at whether the wells actually improved health outcomes.
Common mistakes
Confusing Efficiency with Effectiveness.
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