So, what is value for money? Show
Value for money has been defined as a utility derived from every purchase or every sum of money spent. Value for money is based not only on the minimum purchase price (economy) but also on the maximum efficiency and effectiveness of the purchase. The concept of Value for Money (VfM) in everyday life is easily understood as “not paying more for a good or service than its quality or availability justify”. In relation to public spending, it implies a concern with economy (cost minimization), efficiency (output maximization) and effectiveness (full attainment of the intended results). It must also support the value of equity. Value for money is used interchangeably with synonyms such as:
The 4 Es in Value for Money In an attempt to provide a standard for defining and measuring value for money, 3 E’s – economy, efficiency and effectiveness, were initially introduced and later a fourth E (equity). It is not the intention of this article to define the 4 E’s, but to explore how the 4 E’s can be deployed in the public sector. Value for money tools Various tools exist for ensuring value for money, such as:
Steps to achieve value for money
Watch out, value for money leaks! Good intentions, ethical behaviour, adept planning does not always guarantee value for money. Value for money leaks, and therefore it is important to identify the typical leak points, which include:
A public practitioner who is keen to deliver value, will work towards sealing these leaks, which can jeopardize value for money and thereby affect the social contract. And remember, that prevention is better than cure. VfM challenges in public sector Defining and measuring value for money is fraught with various challenges in the public sector such as.
Communicating VfM However difficult or seemingly impossible it is to articulate, plan, deliver and measure VfM in the public sector, a clear communication strategy is important. It is said that many times, value is deemed not to have been delivered because it is not declared. So, what are the minimums when it comes to communicating VfM?
Which of the following is used to measure the rate of return on a direct participation program?Analysts use both present value and internal rate of return to establish a DPP's rate of return. Both involve assumptions based on future cash flows generated by the program.
Which of the following is the most common type of direct participation program in the securities industry?The most common DPPs are non-traded REITs (about two-thirds of the DPP market), non-listed business development companies (BDC) (which act as debt instruments for small businesses), energy exploration and development partnerships, and equipment leasing corporations.
Which of the following is a direct participation program?Types of Direct Participation Programs
Non-traded real estate investment trusts. Non-listed business development companies. Energy-related projects. Equipment leasing companies.
What is an advantage of direct participation programs?In general, DPPs provide an alternative investment route that allows investors to participate in a business venture's cash flow or tax advantages. They may presentbenefits like the chance to own a piece of a business through a percentage interest, share of assets, or other unit.
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