Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

A significant limitation of performance measurement lies in the challenge of establishing clear cause and effect relationships. While performance indicators can provide valuable insights into various aspects of an organization's effectiveness, they often do not explicitly demonstrate how specific actions or inputs lead to the observed results. This gap can create confusion in assessing the true impact of interventions, making it difficult for managers to determine the factors that contribute most significantly to performance outcomes.

For example, a government program may show positive outcomes in a certain area, but identifying whether those outcomes are the result of the program's initiatives or other external factors, such as economic trends or demographic changes, can be complex. This limitation underlines the importance of using performance measurements as part of a comprehensive evaluation strategy, rather than relying solely on quantitative data to draw conclusions about effectiveness.

The other options highlight characteristics that do not represent significant limitations. Minimal indicators can lead to clarity rather than confusion, and while performance measurements can include qualitative data, they are not limited to it. Additionally, results can be tied to inputs in various ways; however, this relationship is often nuanced and may not be straightforward, reinforcing the importance of considering the context in which performance data is analyzed.