Our approach to value for money

WaterAid is committed to ensuring our resources are put to the best possible use in order to meet our charitable objectives.

WaterAid defines value for money as the relationship between economy, efficiency and effectiveness. An organisation achieves good value for money when it obtains an optimum balance between all three: low costs, high productivity and effective outcomes.

  • Economy: acquiring resources in appropriate quality and quantity at the lowest cost 
  • Efficiency: achieving the maximum delivery, with the least possible use of resources 
  • Effectiveness: doing things well, in accordance with objectives and values, in order to achieve intended results.

The Audit Commission's diagram helps to explain the linkages:

Within WaterAid, management are responsible and accountable for achieving and demonstrating value for money. They do this by maintaining sound arrangements for the planning, authorisation and control of the use of resources. These include: 

  • Documented policies and procedures (e.g. Global Accounts Manual) 
  • Internal control framework (e.g. budget monitoring)
  • Strategic decision making (e.g. selection of new partners)
  • Living our values (e.g. accountability).

A clear tone from the top is set to establish a culture and commitment to achieve good value for money, to promote effective and efficient working and to challenge and question costs and cost implications. 

In order to demonstrate and evidence our ways of working, a 'framework' is used showing the key mechanisms in place to help achieve good value for money. This framework shows the progress made since the VFM mechanisms were originally documented and where the organisation wants to be.

The framework is designed to be used as a management tool; to maintain good practice and to monitor our progress where we need to take further action. This is supported by several sources of assurance available in respect of value for money, including internal audit reports, Country Programme evaluations, benchmarking exercises and Chief Executive and Director reporting.