Module 7. Assessing value for money

Building VFM into programme management and reporting

VFM data is only useful if it is analysed and reported in a timely and appropriate fashion and feeds into the overall programme management. It should not be seen as a separate activity but an integral part of programme monitoring. VFM analysis is a team task – monitoring and finance teams have to work closely with intervention managers to capture programme cost data and to attribute this to individual interventions as appropriate or possible.

Monitoring teams typically assist programme managers in reviewing VFM performance by analysing and reporting performance against VFM indicators. A useful tool to benchmark and track VFM performance is to use a VFM traffic light system which measures VFM performance against pre-determined targets: where a green rating is given if the deviation from target is +/- <25 per cent; amber rating when the deviation from target is +/- 26 per cent - 49 per cent; red rating when the deviation from target is +/- >50 per cent.

During regular programme reviews (typically annually), programme managers should analyse VFM performance and ask key questions to understand any significant deviation from VFM targets. Examples could include:

• Economy: Were outputs harder to generate than planned?
• Efficiency: Was more long term technical assistance and short term technical assistance time required for implementation?
• Effectiveness: Was the intervention implemented according to plan, but then failed to stimulate the desired increase in investment, jobs, or incomes etc.?

Assessing Value for Money: the case of donor support to FSD Kenya

Practical approaches to demonstrating VFM in market development programmes.

Evaluation methods for assessing Value for Money

A range of methods for evaluating a programme's approach to VfM

Go to Module 8 next or return to the Monitoring Guidance.