Question Tag: Average Method

i) Distinguish between the Weakest Link Method and the Average Method:

• Weakest Link Method (M1): In this method, the overall score for an indicator is determined by the lowest score received by any of its dimensions. This means that if one dimension is rated poorly, the entire indicator score reflects that weakest link, regardless of the scores of the other dimensions.
• Average Method (M2): In this method, the overall score for an indicator is the average of the scores of its dimensions. This method balances out the different scores of the dimensions, providing an overall rating that reflects the general performance across all dimensions.

ii) Compute the Score for Each Indicator:

1. Indicator 1 (Financial data integrity):
   • Dimensions: D, D, A, C
   • Method: Average Method (M2)
   • Score: (D, D, A, C) -> Average of scores: (1+1+4+3)/4 = 9/4 = 2.25 ≈ C
   • Interpretation: The overall score for financial data integrity is C, indicating moderate performance with significant room for improvement in specific areas.
2. Indicator 2 (In-year budget reports):
   • Dimensions: B, C, B
   • Method: Weakest Link Method (M1)
   • Score: The lowest score among the dimensions is C, so the overall score for this indicator is C.
   • Interpretation: This score reflects that the weakest dimension (timing of in-year budget reports) is dragging down the overall performance.
3. Indicator 3 (Annual financial reports):
   • Dimensions: C, B, D
   • Method: Weakest Link Method (M1)
   • Score: The lowest score among the dimensions is D, so the overall score for this indicator is D.
   • Interpretation: The poor score in accounting standards significantly affects the overall performance of this indicator.

iii) Ways to Improve Performance in Indicator 3 (Annual financial reports):

1. Adopt and Implement IPSAS: The government can improve the accounting standards dimension by adopting and fully implementing International Public Sector Accounting Standards (IPSAS). This will enhance the quality and comparability of financial reports.
2. Timely Submission of Reports: Ensure that annual financial reports are completed and submitted within the prescribed timeframes. Strengthening internal processes and automating reporting systems can help achieve this.