The Value for Money Audit Process Session

1.3

Suggested solution to Exercise 1.3-A

Situation Economy Efficiency Effectiveness

1. Heavy equipment purchased by the Department for the project X
remained unutilized because the contractors used their own
equipment
2. Saving in time of transportation of goods due to better road X X
condition
3. Rates for the additional work carried out by the same contractors X
were higher than the prevailing rates
4. 25 labourers were engaged for every kilometre of road repaired X
as against the norm of 15 labourers per kilometre repaired
5. Irrigation canals were constructed but failure to bore deep tube X
wells resulted in non-availability of irrigation water
6. 20 kgs of sugar was produced from 100 kgs of sugarcane against X
standard of 80 kgs of sugarcane.
7. Health centres were constructed in the rural areas to provide X
better medical facilities, but the posts of doctors remained vacant
in 60 percent of the centres
8. The construction materials were purchased in small quantities at X
different intervals and so the advantage of discounted rates for
bulk purchases could not be enjoyed
9. A particular project was expected to increase the earning X
capacity of the rural poor
10. Contractors were over paid by $50,000 due to wrong calculation X
11. Manual processing of claims was replaced by a computerised X X X
system. It was observed that the claim processing time, as well
as the error rate, were significantly reduced as a result of this
change over and the number of workers required was also less
for the same amount of work
12. Program guideline recommended the use of copper pipes but X X

Solution(Exercise 1.3-A) 19/9/21 1

The Value for Money Audit Process Session
1.3

Situation Economy Efficiency Effectiveness

instead cheaper and less durable PVC pipes were used were
used.
13. There was a transmission loss of 10% against the normal 5% on X
electric distribution lines
14. Under the “Rural Milk Supply” program intended to increase the X X X
supply of milk from rural areas, milk from each village was to be
sent to the nearest refrigeration centres before despatch to the
final customers. But it was found that in many cases, milk was
being sent to more distant refrigeration centres. As a result, there
was greater wastage of milk than norms due to curdling, short
supply and delay in receipt of milk by the final customers
15. Construction work was completed in 2 years though it was X X
planned for completion in 1 year.

Solution(Exercise 1.3-A) 19/9/21 2