Suppose you were on the board of a foundation that was giving a grant to a social welfare agency’s program. Would you obtain more useful information if you had the program evaluated by an employee of the program (such as the program director) or by an external, independent evaluator? Why?
If you are the individual deciding whether to give grant money to a social welfare agency’s program, you want to be giving grant money to a program that will make good use of the funds. For this reason, I would choose an external, independent evaluator. I want someone to evaluate the program fairly rather than having an employee of the program hype up their work. The employee’s evaluation may be tainted by self interest.
I would wonder if the outside evaluator had enough knowledge or information to accurately determine how well the funds are used. I understand that you were given a binary problem set, but I think a better answer would have been both. Have the internal evaluation itself evaluated by an outside source. There may be expenditures that make no immediate apparent sense, but might be perfectly legitimate in evaluated in context. Sometimes you have to go outside the box to get a better answer.